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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
___________________________
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
Davel Communications Group, Inc.
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(Exact name of registrant as specified in its charter)
Illinois 37-1064777
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
1429 Massaro Boulevard, Tampa, Florida 33619
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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none
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If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [_]
If this form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [X]
Securities to be registered pursuant to Section 12(g) of the Act:
Securities Act registration statement file number to which this form
relates:
__________ (if applicable)
Preferred Share Purchase Rights,
with respect to Common Stock, without par value
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(Title of Class)
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED:
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Preferred Stock Purchase Rights
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On April 22, 1998, the Board of Directors of Davel Communications
Group, Inc. (the "Company") authorized the issuance of one preferred share
purchase right (a "Right") for each outstanding share of common stock, without
par value (the "Common Stock"), of the Company. The distribution is payable to
the stockholders of record at the close of business on May 4, 1998 (the "Record
Date"), which is also the payment date, and with respect to all shares of Common
Stock that become outstanding after the Record Date and prior to the earliest
of the Distribution Date (as defined below), the redemption of the Rights, the
exchange of the Rights, and the expiration of the Rights (and, in certain cases,
following the Distribution Date). Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of a Junior
Participating Preferred Stock, Series A, par value $0.01 per share, of the
Company (the "Preferred Shares") at a price of $100.00 per one one-thousandth of
a Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights, and certain defined terms used herein, are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent"), dated as of
April 22, 1998, and attached hereto as Exhibit 1.1.
Until the earlier to occur of (i) the expiration of the Company's
redemption rights following the date of public disclosure that a person or group
other than certain Exempt Persons (an "Acquiring Person"), together with persons
affiliated or associated with such Acquiring Person (other than those that are
Exempt Persons), has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock (the "Stock Acquisition
Date") or (ii) the tenth business day after the date of commencement or public
disclosure of an intention to commence a tender offer or exchange offer by a
person other than an Exempt Person if, upon consummation of the offer, such
person could acquire beneficial ownership of 15% or more of the outstanding
Common Stock (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced by Common Stock certificates and not by separate
certificates. The Rights Agreement provides that, until the Distribution Date
(or earlier redemption, exchange or expiration of the Rights), the Rights will
be transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption, exchange or expiration of the Rights), new Common Stock
certificates issued after May 4, 1998, upon transfer or new issuance of the
Common Stock, will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender for transfer of any certificate for
Common Stock, with or without such notation or a copy of a summary of the Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date, and such
separate Right Certificates alone will evidence the Rights.
The Rights will first become exercisable after the Distribution Date
(unless sooner redeemed or exchanged). The Rights will expire at the close of
business on May 4, 2008 (the "Expiration Date"), unless earlier redeemed or
exchanged by the Company as described below.
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The Purchase Price payable, and the number of Preferred Shares or
other securities, cash or other 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 or distribution on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights, options or warrants to subscribe for
Preferred Shares or securities convertible into Preferred Shares at less than
the current market price of the Preferred Shares or (iii) upon the distribution
to holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends out of earnings or retained earnings)
or of subscription rights or warrants (other than those referred to above). In
addition, the Purchase Price payable and the number of Preferred Shares
purchasable on exercise of a Right is subject to adjustment in the event that
the Company should (i) declare or pay any dividend on the Common Stock payable
in Common Stock or (ii) effect a subdivision or combination of the Common Stock
into a different number of Common Stock.
In the event that, at any time following public disclosure that an
Acquiring Person has become such, the Company is involved in a merger or other
business combination transaction where the Company is not the surviving
corporation or where Common Stock are changed or exchanged or in a transaction
or transactions wherein 50% or more of its consolidated assets or earning power
are sold, proper provision would be made so that each holder of a Right (other
than such Acquiring Person and certain related persons or transferees) shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company or the Company, as the case may be, which at the time of
such transaction would have a market value of two times the exercise price of
the Right. In the event that there is public disclosure that an Acquiring
Person has become such, proper provision would be made so that each holder of a
Right, other than Rights that are or were beneficially owned by the Acquiring
Person and certain related persons and transferees (which will thereafter be
void), on or after the earlier of the Distribution Date and the first public
disclosure that an Acquiring Person has become such, will thereafter have the
right to receive upon exercise that number of shares of Common Stock (or other
securities) having at the time of such transaction a market value of two times
the exercise price of the Right. In addition, the Company's Board of Directors
has the option of exchanging all or part of the Rights (excluding void Rights)
for an equal number of shares of Common Stock in the manner described in the
Rights Agreement.
No fractional Preferred Shares will be issued (other than fractions
which are integral multiples of one one-thousandth of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary receipts) and in
lieu thereof, an adjustment in cash will be made based on the market price of
the Preferred Shares on the last trading date prior to the date of exercise.
At any time prior to public disclosure that an Acquiring Person has
become such, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price"),
payable in cash, shares (including fractional shares) of Common Stock or any
other form of consideration deemed appropriate by the Board of Directors.
At any time prior to public disclosure that an Acquiring Person has
become such, the Board of Directors of the Company may amend or supplement the
Rights Agreement without the approval of the Rights Agent or any holder of the
Rights. Thereafter, the Board of Directors of the Company may amend or
supplement the Rights Agreement without such approval only to cure ambiguity,
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correct or supplement any defective or inconsistent provision or change or
supplement the Rights Agreement in any manner which shall not adversely affect
the interests of the holders of the Rights (other than an Acquiring Person or an
affiliate or associate thereof). Immediately upon the action of the Board of
Directors providing for any amendment or supplement, such amendment or
supplement will be deemed effective.
The Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of $25 per share and 1,000 times
the dividend declared per share of Common Stock. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum preferential
liquidation payment equal to the greater of $100 per share and 1,000 times the
payment made per share of Common Stock. Each Preferred Share will have 1,000
votes per share, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per share of Common Stock.
Exempt Persons include (i) the Company, (ii) any Subsidiary of the
Company, (iii) Mr. David R. Hill, the principal shareholder of the Company ("Mr.
Hill"), (iv) any employee benefit plan of the Company or of any Subsidiary of
the Company, and (v) any Person holding Common Stock for any such employee
benefit plan or for employees of the Company or of any Subsidiary of the Company
pursuant to the terms of any such employee benefit plan.
Subject to certain exceptions and Permitted Acquisitions, Mr. Hill is
allowed to acquire additional Common Stock in an amount not to exceed the sum of
(i) 1% and (ii) its beneficial ownership of Common Stock on the date of the
Rights Agreement, as such beneficial ownership of Common Stock may be increased
as a result of certain subsequent events such as an acquisition of Common Stock
by the Company or any Subsidiary or as a result of acquiring Common Stock as a
result of the operation of the Rights Agreement.
"Permitted Acquisition" means, with respect to Mr. Hill, (i) any
acquisition by way of any stock dividend, stock split, reorganization,
recapitalization, merger, consolidation, rights offering or other like
distribution made available to holders of Common Stock generally or under this
Agreement (as the same may be amended, restated or supplemented from time to
time) or any other shareholder rights agreement and (ii) any acquisition
pursuant to any employee benefit plan, executive compensation plan, management
agreement, director, executive, management or employee stock option plan, or any
other officer or employee incentive award, benefit, bonus or similar plan,
agreement, system or arrangement.
The Rights may have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group (except as described above with
respect to an Exempt Person) that attempts to acquire the Company on terms not
approved by the Board, except pursuant to an offer conditioned on a substantial
number of Rights being acquired. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors prior to
the time a person or group other than an Exempt Person has acquired beneficial
ownership of 15% or more of the Common Stock, because until such time the Rights
may generally be redeemed by the Company at $.01 per Right.
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Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement attached
hereto as Exhibit 1.1, which is incorporated in this Registration Statement on
Form 8-A by reference.
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Item 2. Exhibits
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1.1 Rights Agreement, dated as of April 22, 1998, between Davel
Communications Group, Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent.
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SIGNATURES
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Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Davel Communications Group, Inc.
By: /s/ Michael E. Hayes
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Michael E. Hayes
Its: Senior Vice President and Chief
Financial Officer
Date: April 30, 1998
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Exhibit 1.1
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Davel Communications Group, Inc.
and
ChaseMellon Shareholder Services, L.L.C.
Rights Agent
Rights Agreement
Dated as of April 22, 1998
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<TABLE>
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Table of Contents
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Page
Recitals Recitals.................................................... 1
Section 1. Certain Definitions......................................... 1
Section 2. Appointment of Rights Agent................................. 8
Section 3. Issuance of Rights Certificates............................. 8
Section 4. Form of Rights Certificates................................. 10
Section 5. Execution, Countersignature and Registration................ 10
Section 6. Transfer, Division, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates................................................ 11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights...................................................... 12
Section 8. Cancellation and Destruction of Rights Certificates......... 13
Section 9. Reservation and Availability of Preferred Stock............. 14
Section 10. Preferred Stock Record Date................................. 15
Section 11. Adjustments to Purchase Price, Number of Shares or Number
of Rights................................................... 15
Section 12. Certification of Adjustments................................ 26
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power............................................... 27
Section 14. Fractional Rights and Fractional Shares..................... 29
Section 15. Rights of Action............................................ 30
Section 16. Agreement of Rights Holders Concerning Transfer and
Ownership of Rights......................................... 30
Section 17. Rights Holder Not Deemed a Stockholder...................... 31
Section 18. Concerning the Rights Agent................................. 31
Section 19. Merger or Consolidation or Change of Name of Rights Agent... 31
</TABLE>
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<TABLE>
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Section 20. Duties of Rights Agent........................................ 32
Section 21. Change of Rights Agent........................................ 34
Section 22. Issuance of New Rights Certificates........................... 35
Section 23. Redemption and Termination.................................... 35
Section 24. Notice of Certain Events...................................... 36
Section 25. Notices....................................................... 36
Section 26. Supplements and Amendments.................................... 37
Section 27. Successors.................................................... 38
Section 28. Benefits of this Agreement.................................... 38
Section 29. Severability.................................................. 39
Section 30. Governing Law................................................. 39
Section 31. Counterparts.................................................. 39
Section 32. Descriptive Headings.......................................... 39
Section 33. Grammatical Construction...................................... 39
Section 34. Special Exempt Person Provisions.............................. 39
</TABLE>
Exhibit A -- Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series A
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of April 22, 1998 between Davel
Communications Group, Inc. an Illinois corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability company
(the "Rights Agent").
RECITALS
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The Board of Directors of the Company has authorized and declared the
payment of a dividend of one preferred share purchase right (a "Right") for each
share of Common Stock (as defined in Section 1) outstanding on the Record Date
(as defined in Section 1) and has authorized the issuance of one Right for each
share of Common Stock issued after the Record Date and before the earliest of
the Distribution Date, the Redemption Date, the Exchange Date and the Expiration
Date (as such terms are defined in Section 1) and in certain cases following
the Distribution Date. Each Right will represent, as of the Record Date, the
right to purchase one one-thousandth of one share of Preferred Stock (as defined
in Section 1) upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in this Agreement, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" means any Person who or which, together with
all Affiliates and Associates of such Person, is (or has previously been, at any
time after the date of this Agreement, whether or not such Person(s) continues
to be) the Beneficial Owner of 15% or more of the Common Stock then outstanding
(determined without taking into account any securities exercisable or
exchangeable for, or convertible into, Common Stock, other than any such
securities beneficially owned by the Acquiring Person and Affiliates and
Associates of such Person). However, "Acquiring Person" shall not include any
Exempt Person.
Notwithstanding the foregoing, a Person shall not become an "Acquiring
Person" solely as the result of (i) an acquisition of Common Stock by the
Company or any Subsidiary which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 15% or more of the Common Stock then outstanding as determined above, or (ii)
such Person becoming the Beneficial Owner of 15% or more of the Common Stock
then outstanding as determined above solely as a result of an Exempt Event;
provided, however, that if a Person becomes the Beneficial Owner of 15% or more
of the Common Stock then outstanding as determined above solely by reason of
such a share acquisition by the Company or the occurrence of such an Exempt
Event and such Person shall, after becoming the Beneficial Owner of such Common
Stock, become the Beneficial Owner of any additional shares of Common Stock by
any means whatsoever (other than as a result of the subsequent occurrence of an
Exempt Event, a stock dividend or a subdivision of the Common Stock into a
larger number of shares or a similar transaction), then such Person shall be
deemed to be an "Acquiring Person."
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Notwithstanding the foregoing, if a majority of the Continuing
Directors (as defined below) or, if there are then no Continuing Directors, a
majority of the Board of Directors of the Company determines in good faith that
a Person who would otherwise be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this Section 1(a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this Section 1(a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement. The determination of whether such Person's becoming an Acquiring
Person shall have been inadvertent and the determination of whether the
divestment of sufficient shares shall have been made as promptly as practicable
shall be made by a majority of the Continuing Directors or, if there are then no
Continuing Directors, a majority of the Board of Directors of the Company.
(b) "Adjustment Number" has the meaning set forth in, and shall be
calculated in accordance with, the Certificate of Designation, Preferences and
Rights of Junior Participating Preferred Stock, Series A, attached as Exhibit A
hereto.
(c) "Affiliate" has the meaning given to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement; provided that, for purposes of this Agreement, the term
"Affiliate" shall not include any Person that is an Exempt Person.
(d) "Associate" has the meaning given to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement; provided that, for purposes of this Agreement, the term
"Associate" shall not include any Person that is an Exempt Person.
Except as provided below, a Person shall be deemed to be the
"Beneficial Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any Affiliate or Associate of such
Person beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate of such
Person has, directly or indirectly, the right or obligation (whether
or not then exercisable or effective) to acquire pursuant to any
agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise;
provided, however, that a Person will not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any
Affiliate or Associate of such Person until such tendered securities
are accepted for purchase or exchange; and provided further, that
prior to the occurrence of a Triggering Event, a Person will not be
deemed the Beneficial Owner of, or to beneficially own, securities
obtainable upon exercise of the Rights;
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(iii) which such Person or any Affiliate or Associate of such
Person has, directly or indirectly, the right (whether or not then
exercisable) to vote, or to direct the voting of, 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 pursuant to this clause
(iii) if the agreement, arrangement or understanding to vote, or to
direct the voting of, such security (A) arises solely from a revocable
proxy or consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the Exchange
Act and applicable rules and regulations thereunder and (B) is not
also then reportable under Item 6 (or any comparable or successor
item) of Schedule 13D under the Exchange Act (or any comparable or
successor schedule or report);
(iv) which such Person or any Affiliate or Associate of such
Person has "beneficial ownership" of as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act or
any successor provision; or
(v) which are beneficially owned, directly or indirectly, by any
other Person or any Affiliate or Associate of such other Person with
whom such Person or any Affiliate or Associate of such Person 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 clause (iii) of this Section 1(d)) or
disposing of any securities of the Company.
Nothing in the preceding sentence shall cause a Person engaged in
business as an underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.
Notwithstanding anything in this Agreement to the contrary, for
purposes of this Agreement, no Person shall be treated as the "Beneficial Owner"
of, or be deemed to "beneficially own," any securities solely by reason of the
ownership of those securities by any other Person that is an Exempt Person.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially under the preceding provisions in this
definition.
(e) "Business Combination" has the meaning set forth in Section 13 of
this Agreement.
(f) "Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
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(g) "Close of Business" on any given date means 5:00 p.m., New York,
New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m. New York, New York time, on the next
succeeding Business Day.
(h) "Common Equivalent Share" has the meaning set forth in Section
11(c)(2)(C) of this Agreement.
(i) "Common Share" has the meaning set forth in Section 11(c)(2)(C) of
this Agreement.
(j) "Common Stock" when used with reference to the Company means the
Common Stock, no par value, of the Company (as the same may be changed by reason
of any combination, subdivision or reclassification of the Common Stock).
"Common Stock" when used with reference to any Person (other than the Company
prior to a Business Combination) means shares of capital stock of such Person
(if such Person is a corporation) of any class or series, or units of equity
interests in such Person (if such Person is not a corporation) of any class or
series, the terms of which shares or units do not limit (as a fixed amount and
not merely in proportional terms) the amount of dividends or income payable or
distributable on such shares or units or the amount of assets distributable on
such shares or units upon any voluntary or involuntary liquidation, dissolution
or winding up of such Person and do not provide that such shares or units are
subject to redemption at the option of such Person, or any shares of capital
stock or units of equity interests into which the foregoing shall be
reclassified or changed; provided, however, that if at any time there are more
than one such class or series of capital stock of or equity interests in such
Person, "Common Stock" of such Person will include all such classes and series
substantially in the proportion of the total number of shares or other units of
each such class or series outstanding at such time.
(k) "Continuing Director" means (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board of
Directors of the Company, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person or a representative, designee or nominee of an
Acquiring Person or of any such Affiliate or Associate, and who was a member of
the Board of Directors of the Company on the date of this Agreement, and (ii)
any Person who becomes a member of the Board of Directors of the Company after
the date of this Agreement, while such Person is a member of the Board of
Directors of the Company, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative, designee or nominee of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election, or election, to the Board of Directors of the Company
is recommended or approved by a majority of the Continuing Directors.
(l) "Current Market Price" per share of Common Stock, Common
Equivalent Share or any other security on any date is the average of the daily
closing prices per share of such Common Stock, Common Equivalent Share or any
other security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date for the purpose of any computation under
this Agreement except computations made pursuant to Section 11(c)(1) or (2), and
for the Trading Day immediately prior to such date for the purpose of any
computation under Section 11(c)(1) or (2); provided, however, that in the event
that the Current Market Price per share
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of Common Stock, Common Equivalent Share or any other security is determined
during a period following the announcement by the issuer of such Common Stock,
Common Equivalent Share or any other security of (i) a dividend or distribution
on such Common Stock, Common Equivalent Share or any other security other than a
regular quarterly cash dividend, or (ii) any subdivision, combination or
reclassification of such Common Stock, Common Equivalent Share or any other
security, and prior to the expiration of 30 Trading Days after the "ex-dividend"
date for such dividend or distribution or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "Current
Market Price" must be appropriately adjusted to take into account such dividend,
distribution, subdivision, combination or reclassification. The closing price
for each Trading Day shall be the last sale price, regular way, on such day, or,
in case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, on such day, 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 ("NYSE") or, if the
Common Stock, Common Equivalent Share or any other security is not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
United States national securities exchange on which the Common Stock, Common
Equivalent Share or any other security is listed or admitted to trading or, if
the Common Stock, Common Equivalent Share or any other security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the Common Stock, Common Equivalent Share or any
other security is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the security selected by a majority of the Board of Directors of the
Company or, if at the time of such selection there is an Acquiring Person and at
least one Continuing Director, by a majority of the Continuing Directors. If no
such market maker is making a market, the fair market value of such shares on
such day as determined in good faith by a majority of the Board of Directors of
the Company or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors or, if there are then no
Continuing Directors, by a nationally recognized investment banking firm
selected by the Board of Directors of the Company having no current or former
relationship with an Acquiring Person, or by the Board of Directors of the
issuer of such Common Stock, Common Equivalent Share or any other security shall
be used, which determination shall be described in a statement filed with the
Rights Agent and shall be binding and conclusive for all purposes. The term
"Trading Day" means a day on which the principal United States national
securities exchange on which the Common Stock, Common Equivalent Share or any
other security is listed or admitted to trading is open for the transaction of
business or, if the Common Stock, Common Equivalent Share or any other security
is not listed or admitted to trading on any United States national securities
exchange, but is traded in the over-the-counter market, then any day for which
the high bid and low asked prices in the over-the-counter market are reported,
or if the Common Stock, Common Equivalent Share or any other security is not
traded in the over-the-counter market, then a Business Day. If the Preferred
Stock is not publicly traded, the "current per share market price" of the
Preferred Stock shall be conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to this Section 1(l)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by the Adjustment
Number.
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(m) "Distribution Date" means the earlier of (i) the tenth day after
the Stock Acquisition Date and (ii) the tenth Business Day after commencement or
public disclosure of an intention to commence (including, without limitation,
any such commencement or public disclosure which occurs before or after the date
of this Agreement and prior to the issuance of the Rights) a tender offer or
exchange offer by a Person if, after acquiring the maximum number of securities
sought pursuant to such offer, such Person, or any Affiliate or Associate of
such Person, would be an Acquiring Person. A majority of the Continuing
Directors or, if there are then no Continuing Directors, a majority of the Board
of Directors of the Company may defer the date set forth in clause (ii) of the
preceding sentence to a specified later date or to an unspecified later date to
be determined by a subsequent action or event.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
(o) "Exchange Date" means the time at which Rights are exchanged
pursuant to Section 11(c)(3).
(p) "Exempt Event" means with respect to any Person, the acquisition
by such Person of Beneficial Ownership of Common Stock solely as a result of the
occurrence of a Triggering Event and the effect of such Triggering Event on the
last proviso of clause (ii) of the definition of Beneficial Owner, other than a
Triggering Event in which such Person becomes an Acquiring Person.
(q) "Exempt Person" means (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or of any Subsidiary of
the Company, (iv) any Person holding Common Stock for any such employee benefit
plan or for employees of the Company or of any Subsidiary of the Company
pursuant to the terms of any such employee benefit plan and (v) subject to
Section 34, David R. Hill.
(r) "Exercise Amount" means the amount payable by the holder as a
condition to the exercise of one Right. Until and unless it shall be adjusted in
accordance with this Agreement, the Exercise Amount shall be $100.
(s) "Expiration Date" means the Close of Business on May 4, 2008.
(t) "Permitted Acquisition" means solely with respect to David R.
Hill, (A) any acquisition by way of any stock dividend, stock split,
reorganization, recapitalization, merger, consolidation, rights offering or
other like distribution made available to holders of Common Stock generally or
under this Agreement (as the same may be amended, restated or supplemented from
time to time) or any other shareholder rights agreement and (B) any acquisition
pursuant to any employee benefit plan, executive compensation plan, management
agreement, director, executive, management or employee stock option plan or any
other officer or employee incentive award, benefit, bonus or similar plan,
agreement, system or arrangement.
(u) "Person" means any individual, firm, corporation, limited
liability company, partnership, joint venture, association, trust,
unincorporated organization or other entity, and shall
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include any "group" as that term is used in Rule 13d-5(b) under the Exchange Act
(or any successor provision).
(v) "Preferred Stock" means the Company's Junior Participating
Preferred Stock, Series A, par value $.01 per share, having the rights and
preferences set forth in the Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series A, attached hereto as Exhibit A.
(w) "Principal Party" means (i) in the case of any Business
Combination described in clause (i), (ii) or (iii) of the first sentence of
Section 13(a), (A) the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted or for which they are
exchanged in such Business Combination or, if there is more than one such
issuer, the issuer of the Common Stock which has the greatest aggregate market
value or (B) if no securities are so issued, the Person that survives or results
from the Business Combination or, if there is more than one such Person, the
Person the Common Stock of which has the greatest aggregate market value, and
(ii) in the case of any Business Combination described in clause (iv) of the
first sentence in Section 13(a), the Person that receives the greatest portion
of the assets or earning power transferred pursuant to such Business Combination
or, if each Person that is a party to such Business Combination receives the
same portion of the assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power cannot reasonably
be determined, whichever of such Persons is the issuer of the Common Stock which
has the greatest aggregate market value; provided, however, that in any such
case, if the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act and such Person is a direct or indirect Subsidiary of one or
more other Persons, then (x) "Principal Party" refers to whichever of such other
Persons has Common Stock that is and has been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act; (y) if the
Common Stocks of two or more of such other Persons are and have been so
registered, "Principal Party" refers to whichever of such other Persons is the
issuer of the Common Stock which has the greatest aggregate market value; or (z)
if the Common Stock of none of such other Persons has been so registered,
"Principal Party" refers to whichever of such other Persons (other than an
individual) is the Person which has the equity securities with the greatest
aggregate market value. In case such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth above apply to each of the
chains of ownership having an interest in such joint venture as if such Person
were a Subsidiary of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in Section 13 in
the same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(x) "Purchase Price": Until the Trigger Date, the term Purchase Price
means the price at which one-one thousandth of a share of Preferred Stock shall
be purchasable with the Rights. The Purchase Price shall be $100 per one one-
thousandth of a share of Preferred Stock until and unless it shall be adjusted
pursuant to this Agreement. Immediately after the Trigger Date, the term
"Purchase Price" shall mean the price per Common Share for which Common Shares
shall be purchasable with the Rights. Thereafter the term "Purchase Price" as
applied with respect to each kind of stock or other property purchasable with
the Rights as a result of adjustments prescribed by
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this Agreement shall mean the price at which each share of such stock or the
smallest available unit of such other property is purchasable with the Rights.
(y) "Record Date" means the Close of Business on May 4, 1998.
(z) "Redemption Date" means the time at which the Rights are scheduled
to be redeemed as provided in Section 23.
(aa) "Redemption Price" has the meaning given to such term in Section
23.
(bb) "Securities Act" means the Securities Act of 1933, as amended,
and any successor statute.
(cc) "Stock Acquisition Date" means the first date of public
disclosure by the Company, an Acquiring Person or otherwise that an Acquiring
Person has become such.
(dd) "Subsidiary" has the meaning given to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement.
(ee) "Trigger Date" means the first date upon which a Person becomes
an Acquiring Person.
(ff) "Triggering Event" shall mean a Person becoming an Acquiring
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date: (i) the Rights shall be issued in
respect of and shall be evidenced by the certificates representing the shares of
Common Stock issued and outstanding on the Record Date and shares of Common
Stock issued or which become outstanding after the Record Date and prior to the
earliest of the Distribution Date, the Redemption Date, the Exchange Date and
the Expiration Date (which certificates for Common Stock shall be deemed to also
be certificates evidencing the Rights), and not by separate certificates; (ii)
the registered holders of such shares of Common Stock shall also be the
registered holders of the Rights associated with such shares; and (iii) the
Rights shall be transferable only in connection with the transfer of shares of
Common Stock, and the surrender for transfer of any certificate for such shares
of Common Stock shall also constitute the surrender for transfer of the Rights
associated with such shares. As soon as practicable after the Company has
notified the Rights Agent of the occurrence of the Distribution Date, the Rights
Agent shall (except as otherwise provided in Section 7(e)) mail, by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as of
the Close of Business on the Distribution Date, as shown by the records of the
Company, at the address of such holder shown on such records, one or
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more certificates evidencing the Rights ("Rights Certificates"), in
substantially the form of Exhibit B hereto, evidencing one Right (as adjusted
from time to time pursuant to this Agreement) for each share of Common Stock so
held. From and after the Distribution Date, the Rights will be evidenced solely
by such Rights Certificates.
(b) Rights shall be issued in respect of all shares of Common Stock
which are issued or sold by the Company after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date, the Exchange Date and
the Expiration Date. In addition, in connection with the issuance or sale of
Common Stock by the Company following the Distribution Date and prior to the
earliest of the Redemption Date, the Exchange Date and the Expiration Date, the
Company shall, with respect to Common Stock so issued or sold (i) pursuant to
the exercise of stock options issued prior to the Distribution Date or under any
employee plan or arrangement created prior to the Distribution Date, or (ii)
upon the exercise, conversion or exchange of securities issued by the Company
prior to the Distribution Date, issue Rights and Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (x) no such Rights and Rights Certificate shall
be issued if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would
be issued and (y) no such Rights and Rights Certificates shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof. Certificates issued after the Record Date
representing shares of Common Stock outstanding on the Record Date and shares of
Common Stock issued after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date, the Exchange Date and the Expiration
Date shall have impressed, printed, or written on, or otherwise affixed to them
a legend substantially in the following form:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Davel
Communications Group, Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, dated as of April 22, 1998 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Davel Communications Group, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. Davel Communications Group, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Under certain
circumstances, Rights that were, are or become beneficially owned by
Acquiring Persons or their Associates or Affiliates (as such terms are
defined in the Rights Agreement) may become null and void and the
holder of any of such Rights (including any subsequent holder) shall
not have any right to exercise such Rights.
(c) Notwithstanding any other provision of this Agreement, neither the
Company, the Rights Agent nor anyone else shall have any obligation to issue any
Rights Certificate to an
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Acquiring Person or to anyone else in whose hands the Rights nominally
represented by such Certificate shall be null and void either initially or in
connection with a request to register a transfer of Rights represented by a
certificate previously issued. Furthermore, neither the Company, the Rights
Agent nor anyone else shall be obligated to issue Rights Certificates to any
person making a tender offer which if consummated could render such person an
Acquiring Person or to any Affiliate or Associate of such person until and
unless the tender offer is withdrawn and the person shall have established to
the Company's reasonable satisfaction that such person does not intend to become
an Acquiring Person. The Company shall be entitled to require any person
claiming the right to receive a Rights Certificate to present such evidence as
the Company shall require in good faith to establish to the Company's
satisfaction that the Rights represented by that Certificate have not become
null and void under the provisions in Section 7(e) or that the Company is not
entitled to withhold such certificate under the provisions of the preceding
sentence.
Section 4. Form of Rights Certificates. The Rights Certificates (and the
form of election to purchase shares and form of assignment to be printed on the
reverse thereof) shall be in substantially the form of Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions of this
Agreement, the Rights Certificates, whenever issued, shall be dated as of the
Distribution Date, and on their face shall entitle the holders thereof to
purchase such number of shares of Preferred Stock as shall be set forth therein
at the Purchase Price set forth therein, but the number and kind of such
securities and the Purchase Price shall be subject to adjustment as provided in
this Agreement.
Section 5. Execution, Countersignature and Registration.
(a) Each Rights Certificate shall be executed on behalf of the Company
by the Company's Chief Executive Officer, President, Chief Financial Officer,
Treasurer or any Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Company's Secretary or an Assistant Secretary, either
manually or by facsimile signature. Each Rights Certificate shall be
countersigned by the Rights Agent either manually or, if permitted by the
Company, by facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed a Rights
Certificate shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificate nevertheless may be countersigned by the Rights Agent
and issued and delivered with the same force and effect as though the Person who
signed such Rights Certificate had not ceased to be such officer of the Company;
and any Rights Certificate 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 Agreement any such Person was not such an officer.
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(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept, at its principal corporate trust office, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced by each Rights Certificate, and the
certificate number and the date of issuance of each Rights Certificate.
Section 6. Transfer, Division, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 3(c) and Section 14, at any
time after the Close of Business on the Distribution Date and at or prior to the
Close of Business on the earliest of the Redemption Date, the Exchange Date and
the Expiration Date, any Rights Certificate or Rights Certificates may be
transferred, divided, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number
of shares of Preferred Stock (or following a Triggering Event or a Business
Combination, other securities, cash or other property, as the case may be) as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, divide, combine
or exchange any Rights Certificate shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, divided, combined or exchanged at the principal
corporate office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. As a condition to such
transfer, division, combination or exchange, the Company may require payment by
the surrendering holder of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection therewith. 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 duly completed and executed 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 such former or proposed Beneficial
Owner) thereof or such Beneficial Owner's Affiliates or Associates as the
Company shall reasonably request.
(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 make and deliver a new Rights Certificate of like
tenor to the Rights Agent for 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.
(a) Each Right shall entitle (except as otherwise provided in this
Agreement) the registered holder thereof, upon the exercise thereof as provided
in this Agreement, to purchase, for the Purchase Price, at any time after the
Distribution Date and prior to the earliest of the Expiration
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Date, the Exchange Date and the Redemption Date, one one-thousandth (1/1000) of
a share of Preferred Stock, subject to adjustment from time to time as provided
in Sections 11 and 13.
(b) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided in this Agreement) in
whole or in part (except that no fraction of a Right may be exercised) at any
time after the Distribution Date and prior to the earliest of the Expiration
Date, the Exchange Date and the Redemption Date, by surrendering the Rights
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal corporate trust office of
the Rights Agent, together with payment of the Exercise Amount for each Right
exercised.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Exercise Amount for each Right exercised and an amount equal to
any applicable transfer tax required to be paid by the surrendering holder
pursuant to Section 9(d), the Rights Agent shall, subject to the provisions of
this Agreement, thereupon promptly (i)(A) requisition from any transfer agent
for the Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the Preferred Stock (or other
securities, as the case may be) 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
Preferred Stock (or other securities, as the case may be) issuable upon exercise
of the Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such Preferred Stock (or other securities, as
the case may be) as are to be purchased (in which case certificates for the
Preferred Stock (or other securities, as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company shall direct the depositary agent to comply with such request; (ii)
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 (iii) if appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 of this Agreement and, promptly after receipt thereof, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue other
securities (including shares of Common Stock) of the Company, pay cash and/or
distribute other property pursuant to this Agreement, 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 the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the provisions of
Section 3(c) and Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are or were formerly beneficially owned on or after the earlier of
the Distribution Date and the Trigger Date by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a
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direct or indirect transferee of an Acquiring Person (or of an Associate or
Affiliate of such Acquiring Person) who becomes or becomes entitled to be a
transferee after the Acquiring Person becomes such, or (iii) a direct or
indirect transferee of an Acquiring Person (or of an Associate or Affiliate of
such Acquiring Person) who becomes or becomes entitled to be a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a direct or indirect transfer (whether or not for
consideration) from the Acquiring Person (or from an Associate or Affiliate of
such Acquiring Person) to holders of equity interests in such Acquiring Person
(or to holders of equity interests in any Associate or Affiliate of such
Acquiring Person) or to any Person with whom the Acquiring Person (or an
Associate or Affiliate of such Acquiring Person) has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a direct or
indirect transfer which a majority of the Continuing Directors or, if there are
then no Continuing Directors, a majority of the Board of Directors of the
Company determines is part of a plan, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e), shall,
immediately upon the occurrence of a Triggering Event and without any further
action, be null and void and no holder of such Rights shall have any rights
whatsoever with respect to such Rights whether under this Agreement or
otherwise, provided, however, that, in the case of transferees under clause (ii)
or clause (iii) above, any Rights beneficially owned by such transferee shall be
null and void only if and to the extent such Rights were formerly beneficially
owned by a Person who was, at the time such Person beneficially owned such
Rights, or who later became, an Acquiring Person or an Affiliate or Associate of
such Acquiring Person. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) are complied with, but shall have no
liability to any holder of a Rights Certificate or to any other Person as a
result of the Company's failure to make, or any delay in making (including any
such failure or delay by the Continuing Directors or the Board of Directors of
the Company) 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 the registered holder of a Rights Certificate 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 or proposed
Beneficial Owner) thereof or the Affiliates or Associates of such Beneficial
Owner (or former or proposed Beneficial Owner) as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, division,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the
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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 canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available at all times out of its authorized and unissued
shares of Preferred Stock or its authorized and issued shares of Preferred Stock
held in its treasury (and, following the occurrence of a Triggering Event or a
Business Combination, out of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and issued shares of Common
Stock and/or other securities held in its treasury) free from preemptive rights
or any right of first refusal, a sufficient number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, shares of Common Stock
and/or other securities) to permit the exercise in full of all Rights from time
to time outstanding.
(b) The Company further covenants and agrees, so long as the
Preferred Stock (and, following the occurrence of a Triggering Event or a
Business Combination, shares of Common Stock and/or other securities) issuable
upon the exercise of Rights may be listed on any United States national
securities exchange or quoted on any automated quotation system, to use its best
efforts to cause, from and after the time that the Rights become exercisable,
all such shares and/or other securities reserved for such issuance to be listed
on such exchange or quoted on such automated quotation system upon official
notice of issuance upon such exercise.
(c) The Company further covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
(and, following the occurrence of a Triggering Event or a Business Combination,
shares of Common Stock and/or other securities) delivered upon the exercise of
Rights shall, at the time of delivery of the certificates for such shares and/or
such other securities (subject to payment of the Purchase Price), be duly and
validly authorized and issued, fully paid, nonassessable, freely tradeable, not
subject to liens or encumbrances, and free of preemptive rights, rights of first
refusal or any other restrictions or limitations on the transfer or ownership
thereof, of any kind or nature whatsoever.
(d) 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 original issuance or delivery of the Rights
Certificates or of any certificates for shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of Rights.
The Company shall not, however, be required to (i) pay any transfer tax which
may be payable in respect of any transfer involved in the issuance or delivery
of any Rights Certificates or the issuance or delivery of any certificates for
shares of Preferred Stock (or Common Stock and/or other securities as the case
may be) to a Person other than, or in a name other than that of, the registered
holder of the Rights Certificate evidencing Rights surrendered for exercise or
(ii) transfer or deliver any Rights
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Certificate or issue or deliver any certificates for shares of Preferred Stock
(or Common Stock and/or other securities as the case may be) upon the exercise
of any Rights until any 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 Company's satisfaction that no such tax is
due.
(e) The Company shall (i) as soon as practicable following a
Triggering Event (or such earlier time following the Distribution Date as may be
required by law), prepare and file a registration statement on an appropriate
form under the Securities Act with respect to the securities purchasable upon
exercise of the Rights, (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 Securities Act) until the earlier of (A) the
date as of which Rights are no longer exercisable for such securities and (B)
the Expiration Date. The Company shall also take such action as may be necessary
or appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercise of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 90 days
after the date of a Triggering Event, the exercisability of the Rights in order
to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall make 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.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock (or 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 the Preferred
Stock (or Common Stock and/or other securities, as the case may be) 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
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (and/or such other securities, as the
case may be) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.
Section 11. Adjustments to Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of securities, cash and other
property obtainable upon exercise of each Right and the number of Rights
outstanding shall be subject to adjustment from time to time as provided in this
Section 11.
(a) Adjustments Prior to Trigger Date:
(1) In the event the Company shall at any time after the date of
this Agreement and prior to the Trigger Date (i) pay a
dividend or make a distribution on the Common Stock payable
in shares of Common Stock, (ii) subdivide (by a stock split
or otherwise) the outstanding
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Common Stock into a larger number of shares, (iii) combine
(by a reverse stock split or otherwise) the outstanding
Common Stock into a smaller number of shares (and any of the
actions described in clauses (i), (ii) or (iii) are herein
called a "stock split") then:
(A) The number of Rights outstanding shall be adjusted so
that after giving effect to such stock split the number
of Rights outstanding shall be exactly equal to the
number of shares of Common Stock outstanding (and so
that prior to the Distribution Date one Right shall be
associated with every share of Common Stock outstanding
after such Stock Split);
(B) The Exercise Amount shall be adjusted by multiplying
the Exercise Amount in effect immediately prior to such
stock split by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding
immediately prior to such stock split and the
denominator of which shall be the number of shares of
Common Stock outstanding immediately after such stock
split;
(C) The Purchase Price for each one one-thousandth of a
share of Preferred Stock shall not change; and
(D) The fraction of a share of Preferred Stock purchasable
with each Right immediately after such stock split
shall be equal to the product derived by multiplying
the fraction of a share of Preferred Stock purchasable
with each Right immediately prior to such stock split
times the fraction cited in clause (B) above.
The following example illustrates the intended operation of the
preceding provisions. Assume that initially, each Right would
(when and if it became exercisable) entitle its holder to
purchase one one-thousandth of a share of Preferred Stock for
$100 (and accordingly the initial Exercise Amount and the initial
Purchase Price per one one-thousandth of a share of Preferred
Stock are each $100). Assume further that prior to the
Distribution Date, the Company splits its Common Stock two for
one (thereby doubling the number of shares of Common Stock
outstanding). The intended operation of the preceding adjustment
provisions is that: (i) the number of Rights outstanding would
also double; (ii) one Right would be associated with each share
of Common Stock outstanding after the stock split; (iii) each
Right would have an Exercise Amount equal to $50; (iv) each Right
will entitle its holder (when and if the Right becomes
exercisable) to purchase one two-thousandth of one share of
Preferred Stock; and (v) the Purchase Price for each one one-
thousandth of a share of Preferred Stock would remain $100 so
that the price
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for each one two-thousandth of a share of Preferred Stock
purchasable with each Right would be $50.
(2) Adjustment in Rights Certificates: In the event the
Distribution Date shall occur and the Company shall issue
separate certificates to represent the Rights, the following
provisions shall thereafter apply:
(A) In the event the number of Rights outstanding are
increased pursuant to Section 11(a)(1), the Company
shall as promptly as reasonably possible distribute to
the record holders of the Rights on the record date for
the stock split giving rise to the increase in the
number of Rights certificates representing the
additional Rights issuable by reason of such stock
split.
(B) In the event the number of Rights outstanding are
reduced pursuant to Section 11(a) by reason of the
occurrence of a reverse stock split or its functional
equivalent, then each Rights certificate outstanding
prior to such reverse stock split shall thereafter
represent the reduced number of Rights into which the
Rights represented by such certificate immediately
prior to such reverse stock split shall have been
converted by reason of the occurrence of that reverse
stock split.
(b) Basic Triggering Event Adjustments: Upon the first occurrence of
a Triggering Event (except as otherwise provided in this Agreement), each Right
shall be changed so that immediately after the Triggering Event:
(1) it shall no longer be exercisable for Preferred Stock but
rather shall be exercisable for Common Stock;
(2) the number of shares of Common Stock which may be acquired
upon exercise of each Right shall be equal to the result
obtained by dividing (x) 50% of the Current Market Price per
share of Common Stock on the date of the occurrence of the
Triggering Event into (y) the Exercise Amount in effect
immediately prior to the Triggering Event; and
(3) the Purchase Price per Common Share purchasable with each
Right shall be equal to 50% of the Current Market Price per
share of Common Stock on the date of the occurrence of the
Triggering Event.
(c) Other Post Triggering Event Adjustments.
(1) Reduction of Exercise Amount: At any time after the
occurrence of a Triggering Event, a majority of the
Continuing Directors or, if there are then no Continuing
Directors, a majority of the Board of Directors
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of the Company shall have the right to reduce the Exercise
Amount by such amount as such majority shall desire provided
that (i) the reduction shall not result in a Purchase Price
lower than the par value per share of the shares purchasable
with the Rights, and (ii) a majority of the Continuing
Directors or, if there are then no Continuing Directors, a
majority of the Board of Directors of the Company shall
determine that such reduction is not contrary to the
interests of holders of Rights (other than any Acquiring
Person or any other person in whose hands the Rights are
void). The term "Reduction Amount" means the amount of the
reduction in the Exercise Amount which shall be made in
accordance with the preceding sentence. In the event any
reduction shall actually be made in accordance with this
paragraph, then the number of Common Shares purchasable with
each Right shall be reduced to an amount having a Current
Value equal to the remainder derived by subtracting the
Reduction Amount from the Current Value as of the date of
such adjustment of the number of Common Shares purchasable
with each Right immediately prior to such adjustment. For
purposes of the preceding sentence, (i) the "Current Value"
of a particular number of Common Shares shall be equal to
the product derived by multiplying that particular number
times the greater of (x) the Current Market Price
(calculated as prescribed in Section 1) or (y) the closing
price per share (calculated as prescribed in Section 1) for
the Common Shares on the Trading Day immediately prior to
the day on which the adjustment shall be made and (ii) "the
number of Common Shares purchasable with each Right
immediately prior to such adjustment" shall be the number
after giving effect to the adjustment to be made on the
Trigger Date pursuant to Section 11(b) and any other
adjustments which shall have been prescribed by this
Agreement for the period from the Trigger Date to the date
upon which the adjustment shall be made under this Section
11(c)(1). Upon making each adjustment under this Section
11(c)(1), the Purchase Price for each of the Common Shares
purchasable after making such adjustment shall be reduced to
the quotient derived by dividing the Exercise Amount in
effect after such reduction by the number of Common Shares
purchasable with each Right after giving effect to the
reduction prescribed by this Section 11(c)(1).
(2) Use of Common Equivalent Shares or Cash: In the event that
the number of shares of Common Stock which are authorized by
the Company's articles of incorporation, but which are not
outstanding or reserved for issuance for purposes other than
upon exercise of the Rights ("Available Common Stock") is
not sufficient to permit the exercise in full of the Rights
after the adjustment made in accordance with Section 11(b),
then:
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(A) the Company shall first reduce the Exercise Amount
pursuant to Section 11(c)(1) by a Reduction Amount
equal to the lesser of (i) the amount which shall be
sufficient to reduce the amount of Common Stock
purchasable with the Rights (after giving effect to the
adjustment prescribed by Section 11(c)(1)) to a number
of shares not in excess of the Available Common Stock
or (ii) the maximum amount permitted by Section
11(c)(1).
(B) If the amount of the adjustment required by the
preceding sentence shall not be sufficient to reduce
the amount of Common Stock purchasable with the Rights
to a number of shares not in excess of the Available
Common Stock, then (i) first, the Available Common
Stock shall be allocated among the outstanding Rights
so that each Right shall entitle its holder to purchase
the same quantity of Available Common Stock and (ii)
second, each Right shall additionally entitle its
holder to (x) purchase a fraction of a share of
Preferred Stock which when multiplied times the
Adjustment Number then in effect under the terms of the
Preferred Stock produces a product equal to the
remainder derived by subtracting the number of shares
of Common Stock purchasable with each Right after the
allocation specified in clause (i) from the number of
shares of Common Stock which would have been
purchasable with such Right if the Corporation had had
a sufficient number of shares of Common Stock to permit
the Right to be exercisable entirely for Common Stock
(such remainder being referred to herein as the
"Unallocated Shares") or (y) receive cash in an amount
equal to the Current Value of the Unallocated Shares
(calculated as prescribed for the Common Shares in
Section 11(c)(1)) as of the date of substitution of
cash for such Shares, or (z) receive any combination of
the foregoing so long as each Right entitles its holder
to receive the same amount of fractional shares of
Preferred Stock and cash.
(C) The fraction of a share of Preferred Stock equal to the
reciprocal of the Adjustment Number in effect at the
time the term shall be applied shall be deemed to be a
"Common Equivalent Share" for purposes of this
Agreement. The Company shall take all actions
reasonably necessary so that as nearly as possible each
Common Equivalent Share represents substantially the
same interest in the Company, has the same dividend
rate, and has other characteristics as similar as
possible to one share of Common Stock. The term "Common
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Share" whenever it is used in this Agreement means both
a share of Common Stock and a Common Equivalent Share.
(D) If circumstances after the initial Trigger Date require
the use of Common Equivalent Shares, the Company shall
use its best efforts to obtain authorization to issue a
sufficient quantity of Common Stock to permit Common
Stock to be issued upon exercise of the Rights and/or
any exercise of the exchange right under the following
Section. Each time the Company's authorized Common
Stock shall be increased, the adjustment required under
the preceding paragraphs shall be redone to maximize
the amount of Common Stock issuable upon exercise of
the Rights. To the extent excess authorized Common
Stock remains after the readjustment required by the
preceding sentence, the holder of any outstanding
Common Equivalent Share shall have the right at any
time to require the Company to exchange that share for
a share of Common Stock.
(E) In no event, however, shall the Company be obligated to
reserve any Common Stock for issuance under the Rights
until and unless a Triggering Event actually occurs.
(F) In no event shall the Company issue any Preferred Stock
except for issuances caused by exercise of the Rights
and except for issuances required by this Section 11(c)
(2) or Section 11(d)(6).
(3) Exchange Option:
(A) At any time after the occurrence of a Triggering Event
and prior to (i) the time any Person (other than an
Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock then outstanding and
(ii) the occurrence of a Business Combination, a
majority of the Continuing Directors or, if there are
then no Continuing Directors, a majority of the Board
of Directors of the Company may, at their option, cause
the Company to exchange for all or part of the then-
outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the
provisions of Section 7(e) hereof), Common Shares at an
exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after
the date of this Agreement (such exchange
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<PAGE>
ratio being referred to herein as the "Exchange
Ratio"). Any partial exchange shall be effected on a
pro rata basis based on the number of Rights (other
than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder
of Rights.
(B) Immediately upon the action of a majority of the
Continuing Directors or, if there are then no
Continuing Directors, a majority of the Board of
Directors of the Company ordering the exchange of any
particular Rights pursuant to this Section 11(c)(3) and
without any further action and without any notice, the
right to exercise those particular Rights shall
terminate and the only right a holder shall have
thereafter with respect to any of those particular
Rights shall be to receive the number of Common Shares
equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange and in
addition, the Company shall promptly mail a notice of
any such exchange to all of the holders of such Rights
in accordance with Section 25 of this Agreement;
provided, however, that the failure to give, any delay
in giving or any defect in, such notice shall not
affect the validity of such exchange. Each such notice
of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and,
in the event of any partial exchange, the number of
Rights which will be exchanged. The Company shall not
be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders
of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable an
amount in cash equal to the product derived by
multiplying (x) the subject fraction, by (y) the last
sale price of the Company's Common Stock on the fifth
Trading Day following the public announcement of the
exchange by the Company, or, in case no such sale takes
place on such day, the average of the closing bid and
asked prices on such day, in either case on a when
issued basis (taking into account the exchange), as
reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the NYSE (or, if the Company's
Common Stock is not so listed or traded, then as
determined in the manner provided under the definition
of "Current Market Price," adjusted to take into
account the exchange). In determining whether any
particular
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holder shall be obligated to receive cash in lieu of a
fractional share, the holder shall be entitled to have
all Rights beneficially owned by such holder aggregated
so that only one fractional share shall be attributable
to all the Rights so beneficially owned.
(d) Antidilution Adjustments After the Trigger Date:
(1) In the event the Company shall at any time after the Trigger
Date effect any stock split with respect to its Common
Stock, then the Purchase Price to be in effect after such
stock split shall be determined by multiplying the Purchase
Price in effect immediately prior to such action by a
fraction, the numerator of which shall be the number of
Common Shares outstanding immediately prior to such stock
split and the denominator of which shall be the number of
Common Shares outstanding immediately after such stock
split.
(2) In case the Company shall at any time after the Trigger Date
fix a record date for the making of a distribution to
holders of Common Stock (including any such distribution
made in connection with a reclassification of the Common
Stock or a consolidation or merger in which the Company is
the surviving corporation) of securities (other than Common
Stock and rights, options or warrants referred to in Section
11(d)(3)), cash (other than a regular periodic cash dividend
at an annual rate not in excess of (x) 125% of the annual
rate of the regular cash dividend paid on the Common Stock
during the immediately preceding fiscal year or (y) in the
event that a regular cash dividend was not paid on the
Common Stock during such preceding fiscal year, 5% of the
Current Market Price of the Common Stock on the date such
regular cash dividend was first declared), property,
evidences of indebtedness or assets, 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 per share of Common Stock
on such record date, less the fair market value (as
determined in good faith by a majority of the Continuing
Directors or, if at the time of such determination there are
no Continuing Directors, by a nationally recognized
investment banking firm selected by the Board of Directors
of the Company having no current or former relationship with
an Acquiring Person, whose determination shall be described
in a statement filed with the Rights Agent) of such
securities, cash, property, evidences of indebtedness or
assets to be so distributed in respect of one share of
Common Stock, and the denominator of which shall be such
Current Market Price per share of Common Stock on such
record date. Such
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adjustments shall be made successively whenever such a
record date is fixed; and in the event that such
distribution is not made following such adjustment, the
Purchase Price shall be readjusted to be the Purchase Price
which would have been in effect if such record date had not
been fixed.
(3) If the Company shall at any time after the Trigger Date fix
a record date for the issuance of rights, options or
warrants to holders of Common Shares entitling them to
subscribe for or purchase Common Shares (or securities
convertible into Common Shares) at a price per Common Share
(or, in the case of a convertible security, having a
conversion price per Common Share) less than the Current
Market Price per share of Common Stock on such record date
and requiring that the conversion or purchase right be
exercised within 45 calendar days after 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 Shares outstanding on such record date, plus the
number of Common Shares which the aggregate exercise and/or
conversion price for the total number of Common Shares which
are obtainable upon exercise and/or conversion of such
rights, options, warrants or convertible securities would
purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Common Shares
outstanding on such record date, plus the number of
additional Common Shares which may be obtained upon exercise
and/or conversion of such rights, options, warrants or
convertible securities. In case such subscription price may
be paid in a consideration part or all of which shall be in
a form other than cash, the value of such consideration
shall be as determined in good faith by a majority of the
Continuing Directors or, if at the time of such
determination there are no Continuing Directors, by a
nationally recognized investment banking firm selected by
the Board of Directors of the Company having no current or
former relationship with an Acquiring Person, whose
determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent.
Common Shares owned by or held for the account of the
Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or
warrants are not issued following such adjustment, the
Purchase Price shall be readjusted to be the Purchase Price
which would have been in effect if such record date had not
been fixed.
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(4) 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 it in
its sole discretion shall determine to be advisable in order
that any combination or subdivision of the Common Stock,
issuance wholly for cash of any Common Stock at less than
the Current Market Price, issuance wholly for cash of Common
Stock or securities which by their terms are convertible
into or exchangeable or exercisable for Common Shares, stock
dividends or issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the
Company to holders of its Common Shares, shall not be
taxable to such stockholders.
(5) After each adjustment of the Purchase Price pursuant to any
of subsections (1) - (4) immediately above, the number of
Common Shares purchasable with each Right shall be adjusted
to the quotient derived by dividing the Purchase Price as
constituted after giving effect to such adjustment into the
Exercise Amount.
(6) The Company shall not take any of the actions described in
any of subsections (1) - (3) above at a time when any Common
Equivalent Shares are outstanding unless the Company shall
take substantively identical actions with respect to the
outstanding Common Stock and outstanding Common Equivalent
Shares. Conversely, the Company shall not take any actions
with respect to outstanding Common Equivalent Shares
analogous to those described in any of subsections (1) - (3)
above unless the Company shall take substantively identical
actions with respect to the outstanding Common Stock and
outstanding Common Equivalent Shares.
(e) Recapitalizations. In the event that after the Trigger Date, the
Company shall issue any securities in a reclassification of the Common Stock or
in any other recapitalization (including any such reclassification in connection
with a consolidation or merger in which the Company is the surviving
corporation), then in each such event:
(1) the property purchasable with each Right shall be adjusted
to be whatever the owner of that Right would have owned by
reason of both (A) the exercise of that Right immediately
prior to such recapitalization or reclassification and (B)
the effect of that recapitalization or reclassification on
the property assumed to have been received in such exercise.
(2) The Exercise Amount shall be allocated among the shares of
stock and/or other units of property for which the Right
shall be exercisable after giving effect to the adjustment
cited in clause (1) based on the
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fair market value of such property to determine the Purchase
Price for each such share and/or unit.
(f) In the event a Triggering Event shall occur, or in the event
there shall be a recapitalization or reclassification pursuant to Section 11(e),
or in the event there shall be any merger or other action which shall cause a
change in the property purchasable with the Rights under Section 13, or in the
event there shall be any other occurrence or development which shall cause the
property purchasable with the Rights to consist in whole or in part of anything
other than Preferred Stock, then and in any such event:
(1) The certificates representing the Rights shall automatically
be deemed to represent the adjusted terms of the Rights
without the need to replace such certificates. The Company
shall thereafter make arrangements for the production of
certificates representing the revised terms of the Rights
resulting from such adjustment and shall use such
certificates to represent Rights for which new certificates
shall be issuable by reason of a transfer of record
ownership or by reason of a request by the existing record
owner for a replacement certificate representing the revised
terms of the Rights.
(2) The principles underlying the adjustment provisions in this
Section 11 and elsewhere in this Agreement shall be applied
to fairly and proportionately adjust the shares or other
property purchasable with the Rights and the purchase price
for each share or other property unit purchasable with the
Rights after giving effect to the adjustments required by
reason of such event to reflect any subsequent capital
changes or other events. Without limiting by implication the
generality of the preceding sentence, the provisions of
Sections 7, 9, 10, 12, 13, 14 and 24 of this Agreement which
related to the Preferred Stock shall after the occurrence of
any such event apply in a substantively identical manner to
the shares or other property purchasable with the Rights
after giving effect to such event.
(g) Before taking any action that would cause an adjustment reducing
the Purchase Price per share at which shares are purchasable with the Rights
below the par value of those shares, 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 at such
adjusted Purchase Price.
(h) In any case in which this Section 11 shall require that an
adjustment 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 securities, cash or property of the Company, if any, issuable
upon such exercise over and above the shares of Common Stock and other
securities, cash or property of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to
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such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares (fractional or otherwise) or other securities,
cash or property upon the occurrence of the event requiring such adjustment.
(i) The Company covenants and agrees that on and after the Trigger
Date neither it nor any combination of it and its subsidiaries shall (i)
consolidate with any other Person, (ii) merge with or into any other Person or
(iii) directly or indirectly sell, lease, or otherwise transfer or dispose of
(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 if (A) at the time of or
immediately after such consolidation, merger, sale, lease, transfer, or
disposition there are any rights, warrants, securities or other instruments
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (B)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, lease, transfer, or disposition the stockholders (or equity holders) of
the Person who constitutes, or would constitute, the Principal Party in such
transaction shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (C) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights. The Company shall not consummate any such consolidation, merger,
sale, lease, transfer, or disposition unless prior thereto the Company and such
other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(i).
(j) The Company covenants and agrees that, after the Trigger Date it
will not, except as permitted by Section 11(c)(3) of this Agreement, 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, directly or indirectly,
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is
made as provided in Sections 11 and 13, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the stock then purchasable with the Rights a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if no Rights Certificates have been issued, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment. Any adjustment to be made pursuant to Sections
11 and 13 of this Agreement shall be effective as of the date of the event
giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) A "Business Combination" shall be deemed to occur in the
event that, in or following a Triggering Event, (i) the Company shall, directly
or indirectly, consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(i) and Section 11(j) of this Agreement) in a transaction in which the
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Company is not the continuing, resulting or surviving corporation of such merger
or consolidation, (ii) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(i) and Section 11(j) of this
Agreement) shall, directly or indirectly, consolidate with the Company, or shall
merge with and into the Company, in a transaction in which the Company is the
continuing, resulting or surviving corporation of such merger or consolidation
and, in connection with such merger or consolidation, all or part of the Common
Stock shall be changed (including, without limitation, any conversion into or
exchange for securities of the Company or of any other Person, cash or any other
property), (iii) the Company shall, directly or indirectly, effect a share
exchange in which all or part of the Common Stock shall be changed (including,
without limitation, any conversion into or exchange for securities of any other
Person, cash or any other property) or (iv) the Company shall, directly or
indirectly, sell, lease, exchange, mortgage, pledge or otherwise transfer or
dispose of (or one or more of its Subsidiaries shall directly or indirectly
sell, lease, exchange, mortgage, pledge or otherwise transfer or dispose of), 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 (other than the Company or
any of its Subsidiaries in one or more transactions each and all of which comply
with Section 11(i) and Section 11(j) of this Agreement).
In the event of a Business Combination, proper provision shall be made
so that each holder of a Right (except as otherwise provided in this Agreement)
shall thereafter have the right to receive, upon the exercise of each Right,
such number of shares of Common Stock of the Principal Party as shall be equal
to the result obtained by dividing the Exercise Amount in effect prior to the
Business Combination by 50% of the Current Market Price per share of the Common
Stock of such Principal Party immediately prior to the consummation of such
Business Combination. All shares of Common Stock of any Person for which any
Right may be exercised after consummation of a Business Combination as provided
in this Section 13(a) shall, when issued upon exercise thereof in accordance
with this Agreement, be duly and validly authorized and issued, fully paid,
nonassessable, freely tradeable, not subject to liens or encumbrances, and free
of preemptive rights, rights of first refusal or any other restrictions or
limitations on the transfer or ownership thereof of any kind or nature
whatsoever. The Purchase Price per share for such Common Stock immediately after
such Business Combination shall be equal to 50% of the Current Market Price per
share of the Common Stock of such Principal Party immediately prior to the
consummation of such Business Combination.
(b) After consummation of any Business Combination, (i) the Principal
Party shall be liable for, and shall assume, by virtue of such Business
Combination and without the necessity of any further act, all the obligations
and duties of the Company pursuant to this Agreement, (ii) the term "Company" as
used in this Agreement shall thereafter be deemed to refer to such Principal
Party and (iii) such Principal Party shall take all steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common Stock
in accordance with Section 9) in connection with such Business Combination as
necessary to ensure that the provisions of this Agreement shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of its
Common Stock thereafter deliverable upon the exercise of the Rights.
(c) The Company shall not consummate any Business Combination unless
prior thereto (i) the Principal Party shall have a sufficient number of
authorized shares of its Common
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Stock which have not been issued or reserved for issuance (other than shares
reserved for issuance pursuant to this Agreement to the holders of Rights) to
permit the exercise in full of the Rights in accordance with this Section 13,
(ii) the Company and such Principal Party shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the fulfillment of the
Principal Party's obligations and the terms as set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable on or
after the date of such Business Combination, the Principal Party, at its own
expense, shall (A) prepare and file, if necessary, a registration statement on
an appropriate form under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights, (B) use its best efforts to
cause such registration statement to become effective as soon as practicable
after such filing and remain effective (with a prospectus at all times meeting
the requirements of the Securities Act) until the Expiration Date, (C) deliver
to holders of the Rights historical financial statements for the Principal Party
and each of its Affiliates which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act, (D)
use its best efforts to qualify or register the Rights and the securities
purchasable upon exercise of the Rights under the state securities or "blue sky"
laws of such jurisdictions as may be necessary or appropriate, (E) use its best
efforts to list the Rights and the securities purchasable upon exercise of the
Rights on a United States national securities exchange and (F) obtain waivers of
any rights of first refusal or preemptive rights in respect of the Common Stock
of the Principal Party subject to purchase upon exercise of outstanding Rights,
(iii) the Company and the Principal Party shall have furnished to the Rights
Agent an opinion of independent counsel stating that such supplemental agreement
is a legal, valid and binding agreement of the Principal Party enforceable
against the Principal Party in accordance with its terms, and (iv) the Company
and the Principal Party shall have filed with the Rights Agent a certificate of
a nationally recognized firm of independent accountants setting forth the number
of shares of Common Stock of such issuer which may be purchased upon the
exercise of each Right after the consummation of such Business Combination.
(d) The provisions of this Section 13 shall similarly apply to
successive Business Combinations. In the event a Business Combination shall be
consummated at any time after the occurrence of a Triggering Event, the Rights
which have not theretofore been exercised shall thereafter be exercisable for
the consideration and in the manner described in Section 13(a). The provisions
of Section 11(b) of this Agreement shall be applicable to events which occur
after a Business Combination.
(e) Notwithstanding any other provision of this Agreement, no
adjustment to the number or kind of shares (or fractions of a share), cash or
other property for which a Right is exercisable or the number of Rights
outstanding or associated with each share of Common Stock or any similar or
other adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would have
had absent such adjustment, including, without limitation, the benefits under
Sections 11 and 13, unless the terms of this Agreement are amended so as to
preserve such benefits, provided that this paragraph shall not prevent any
change prior to the Trigger Date permitted by Section 26(a) and provided that
this Section 13(e) shall not be deemed to limit or impair the right to engage in
an exchange pursuant to Section 11(c)(3).
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(f) The Company covenants and agrees that it shall not effect any
Business Combination if at the time of, or immediately after such Business
Combination, there are any rights, options, warrants or other instruments
outstanding which would diminish or otherwise eliminate the benefits intended to
be afforded by the Rights.
(g) Without limiting the generality of this Section 13, in the event
the nature of the organization of any Principal Party shall preclude or limit
the acquisition of Common Stock of such Principal Party upon exercise of the
Rights as required by Section 13(a) as a result of a Business Combination, it
shall be a condition to such Business Combination that such Principal Party
shall take such steps (including, but not limited to, a reorganization) as may
be necessary to ensure that the benefits intended to be derived under this
Section 13 upon the exercise of the Rights are assured to the holders thereof.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractional Rights or
to distribute Rights Certificates which evidence fractional Rights.
(b) The Company shall permit the issuance and trading of Preferred
Stock in fractional shares such that the smallest fractional share tradeable at
any particular time shall equal the reciprocal of the Adjustment Number in
effect at that particular time. The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are integral
multiples of the reciprocal of the Adjustment Number) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of the
reciprocal of the Adjustment Number). Fractions of shares of Preferred Stock
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Stock. In lieu
of fractional shares of Preferred Stock that are not integral multiples of the
reciprocal of the Adjustment Number, the Company may at its option (i) issue
scrip or warrants in registered form (either represented by a certificate or
uncertificated) or in bearer form (represented by a certificate) which shall
entitle the holder to receive the reciprocal of the Adjustment Number of one
share of Preferred Stock upon the surrender of such scrip or warrants
aggregating the reciprocal of the Adjustment Number of one share of Preferred
Stock, or (ii) pay to the registered holders of Rights Certificates at the time
such Rights Certificates are exercised as provided in this Agreement an amount
in cash equal to the same fraction of the relevant closing price of a share of
Preferred Stock. For purposes of this Section 14(b), the relevant closing price
of a share of Preferred Stock shall be the closing price of a share of Preferred
Stock (as determined pursuant to the second sentence of the definition of
"Current Market Price" in Section 1) for the Trading Day immediately prior to
the date of such exercise.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or Common Equivalent Shares or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the
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registered holders of the Rights Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the product derived by multiplying (x) the subject fraction, by (y) the
closing price of a share of Common Stock (as determined pursuant to the second
sentence of the definition of "Current Market Price" in Section 1) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by his acceptance thereof expressly waives
any right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as otherwise provided in this Agreement).
Section 15. Rights of Action. Except as otherwise provided, 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, any
registered holders of associated Common Stock); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, any share of associated
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right, may, on 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 rights pursuant to this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to, this Agreement.
Section 16. Agreement of Rights Holders Concerning Transfer and Ownership
of Rights. 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 will be
transferable on the registry books of the Rights Agent only if surrendered at
the principal corporate trust office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name 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 Certificate or the associated Common Stock certificate
made by anyone other than the Company, the transfer agent for the stock
purchasable with such Right or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary.
Section 17. Rights Holder Not Deemed a Stockholder. No holder, as such,
of any Rights Certificate shall be entitled to vote or to receive dividends or
distributions or shall be deemed for any purpose the holder of Preferred Stock
or any other securities, cash or other property which may at
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any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained in this Agreement or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any of
the rights of a stockholder of the Company, including, without limitation, any
right (i) to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, (ii) to give or withhold consent to any
corporate action, (iii) to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), (iv) to receive dividends,
distributions or subscription rights, (v) to institute, as a holder of Preferred
Stock or other securities issuable on exercise of the Rights represented by any
Rights Certificate, any derivative action on behalf of the Company, or
otherwise, until and only to the extent that the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions of this Agreement.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for
special, indirect, consequential or incidental loss or damage of any kind
whatsoever (including, without limitation, lost profits), even if the Rights
Agent has been advised of the likelihood of such damages.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock or Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document reasonably believed by it to be genuine and to be signed,
executed and, when necessary, verified or acknowledged, by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the 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 document or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. 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 the
predecessor Rights Agent and deliver such Rights Certificate so countersigned;
and in case at that time any of the Rights Certificates shall not have been
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countersigned, any successor Rights Agent may countersign such Rights
Certificate either in the name of the predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the 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. 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 opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or 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 specifically prescribed in this Agreement) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman,
the Chief Executive Officer, the President, the Chief Financial Officer, the
General Counsel, the Treasurer, any Vice President or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for the
negligence, bad faith or willful misconduct by it or its attorneys or agent.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution and delivery of this Agreement by the Rights
Agent) or in respect of the validity or execution of any
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Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it be responsible for
any change or adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Sections 3, 11, 13 or 23 or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any change or adjustment is required); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Preferred Stock, Common
Stock or other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock, Common Stock or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performance 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, the Chief Executive Officer, the President, the Chief Financial
Officer, the General Counsel, the Treasurer, any Vice President or the Secretary
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though the Rights Agent were not
serving as such under this Agreement. Nothing in this Agreement 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.
(j) If, with respect to any Rights 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 or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon notice of 30 days in writing mailed to the Company and to each transfer
agent of the Common Stock or Preferred Stock by registered or certified mail and
to the holders of the Rights Certificates by either (i) first-class mail or (ii)
by disclosure in a periodic report of the Company required to be filed under the
Exchange Act,
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any permitted report under the Exchange Act, a press release of the Company or
in any proxy or other communication of the Company with its stockholders. The
Company may remove the Rights Agent or any successor Rights Agent upon notice of
30 days in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock or Preferred Stock
by registered or certified mail, and to the holders of the Rights Certificates
by either (i) first-class mail or (ii) by disclosure in a periodic report of the
Company required to be filed under the Exchange Act, any permitted report under
the Exchange Act, a press release of the Company or in any proxy or other
communication of the Company with its stockholders. 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. Notwithstanding any other
provision of this Agreement, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by any holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then the incumbent Rights Agent or the 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 either (A) be a corporation organized and
doing business under the laws of the United States or of the State of New York
(or of any other state of the United States so long as such corporation is
authorized to conduct a banking, corporate trust or stock transfer business in
the State of New York) in good standing, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000, or (B) be
an affiliate of such a corporation. 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 such
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock or Preferred Stock; the Company shall also
either (i) mail a notice thereof in writing to the registered holders of the
Rights Certificates or (ii) make a disclosure with respect thereto in a periodic
report of the Company required to be filed under the Exchange Act, any permitted
report under the Exchange Act, a press release of the Company or in any proxy or
other communication of the Company with its stockholders. 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. Notwithstanding any of
the provisions of this Agreement or of the Rights Certificates to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by a majority of the Board of Directors of the
Company or, if there is then an Acquiring Person and at least one Continuing
Director, by a majority of the Continuing Directors to reflect any adjustment or
change
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in the Purchase Price per share and the number or kind or class of securities,
cash or other property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Trigger Date and (ii) the Expiration Date,
redeem all but not less than all of the then-outstanding Rights at a redemption
price of $.01 per Right (the "Redemption Price") appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement. The Company may, at its option, pay the Redemption
Price in cash, shares (including fractional shares) of Common Stock (based on
the Current Market Price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
Subject to the terms of this Agreement, the redemption of the Rights by the
Board of Directors of the Company may be made effective at such time, on such
basis and with such conditions as the Board of Directors of the Company in its
sole discretion may establish.
(b) At the time and date of effectiveness set forth in any resolution
of the Board of Directors of the Company ordering the redemption of the Rights,
without any further action and without any further 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; provided, however, that such
resolution of the Board of Directors of the Company may be revoked, rescinded or
otherwise modified at any time prior to the time and date of effectiveness set
forth in such resolution, in which event the right to exercise will not
terminate at the time and date originally set for such termination by the Board
of Directors of the Company. The Company shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. The
Company shall also give notice of such redemption to the Rights Agent. The
Company may elect to give notice of such redemption to the holders of the then-
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the issuance of Rights Certificates, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed in the manner provided in
this Agreement shall be deemed given, whether or not the holder receives the
notice. In connection with any redemption permitted under this Section 23, the
Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the
Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the issuance of the Rights Certificates,
on the registry books of the transfer agent for the Common Stock, and upon such
action, all outstanding Rights Certificates shall be null and void without any
further action by the Company. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23, and other
than in connection with the purchase of shares of Common Stock prior to the
earlier of the Distribution Date and the Expiration Date.
Section 24. Notice of Certain Events. In case the Company, on or after
the Distribution Date, shall propose to (a) pay any dividend payable in stock of
any class to the holders of its Common
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Shares or to make any other distribution to the holders of its Common Shares
(other than a regular periodic cash dividend at an annual rate not in excess of
125% of the annualized rate of the cash dividend paid on the Common Shares
during the immediately preceding fiscal year), or (b) offer to the holders of
its Common Shares rights, options or warrants to subscribe for or to purchase
any additional shares of Common Shares or shares of stock of any class or any
other securities, rights or options, or (c) effect any reclassification of the
Common Shares (other than a reclassification involving only the subdivision of
outstanding shares of Common Shares, a change in the par value of such Common
Shares or a change from par value to no par value), or (d) directly or
indirectly effect any consolidation or merger into or with, or effect any sale,
lease, exchange, or other transfer or disposition (or to permit one or more of
its Subsidiaries to effect any sale, lease, exchange or other transfer or
disposition), 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 (e) effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 25, a notice of
such proposed action, which shall specify any record date for the purposes of
such stock dividend or distribution of rights, or the date on which such
reclassification, consolidation, merger, sale, lease, exchange, transfer,
disposition, liquidation, dissolution or winding up is to take place and if such
holders will or may participate therein, the date of participation therein by
the holders of Common Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (a) or (b) above
at least 20 days prior to the record date for determining holders of the Common
Shares for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein, if any, by the holders of Common Shares,
whichever shall be the earlier. The failure to give notice as required by this
Section 24 or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
In case any Triggering Event or Business Combination shall occur,
then, in any such case, the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, in accordance with Section 25, notice of
the occurrence of such Triggering Event or Business Combination, which shall
specify the Triggering Event or Business Combination and include a description
of the consequences of such event to holders of Rights under Section 11 or 13.
Section 25. Notices. 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:
Davel Communications Group, Inc.
1429 Massaro Boulevard
Tampa, Florida 33619
Attention: General Counsel
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
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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:
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 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 (or, if no Rights Certificates have been issued, if sent by
first-class mail, postage prepaid, addressed to each holder of a certificate
representing shares of Common Stock at the address of such holder as shown on
the Company's Common Stock registry books).
Section 26. Supplements and Amendments.
(a) At any time prior to the Trigger Date, a majority of the Board of
Directors of the Company may, and the Rights Agent shall, if so directed,
supplement or amend any provision of this Agreement, including, without
limitation, the Beneficial Ownership percent as set forth in Section 1 at which
a Person becomes an Acquiring Person and the definition of Exempt Person as set
forth in Section 1 to include any Person in addition to the Persons described
therein, without the approval of any holders of Rights.
(b) From and after the Trigger Date, a majority of the Board of
Directors of the Company may, and the Rights Agent shall, if so directed, amend
this Agreement without the approval of any holders of Rights Certificates (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained in
this Agreement which may be defective or inconsistent with any other provision
of this Agreement or (iii) to change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable, so long as such
change or supplement is not prohibited by Section 11(j) or Section 13(f) and
would not otherwise adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or any other Person in whose hands
the rights are void under the provisions of Section 7(e)).
(c) Except as otherwise provided in Section 26(b):
(1) The Board of Directors of the Company (or, where
specifically provided for in this Agreement, 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 of Directors of the
Company or the Company, or as may be necessary or advisable
in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination
to redeem or not redeem the Rights, to exchange or not
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exchange the Rights for Common Stock or other securities of
the Company, or to amend or supplement this Agreement). No
such action, interpretation or determination (or omission
with respect to the foregoing) shall subject the Board of
Directors of the Company or the Continuing Directors to any
liability to the holders of the Rights.
(2) Immediately upon the action of a majority of the Board of
Directors of the Company providing for any amendment or
supplement pursuant to this Section 26, and without any
further action and without notice, such amendment or
supplement shall be deemed effective. Promptly following the
adoption of any amendment or supplement pursuant to this
Section 26, the Company shall deliver to the Rights Agent a
copy, certified by the Secretary or any Assistant Secretary
of the Company, of resolutions of a majority of the Board of
Directors of the Company adopting such amendment or
supplement. Upon such delivery, the amendment or supplement
shall be administered by the Rights Agent as part of this
Agreement in accordance with the terms of this Agreement, as
so amended or supplemented.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of Rights any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the
Rights.
Section 29. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid and enforceable
under applicable law, but if any provision of this Agreement shall be held to be
prohibited by or unenforceable under applicable law, (i) such provision shall be
applied to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (ii) all other provisions of this
Agreement shall remain in full force and effect. No rule of strict construction,
rule resolving ambiguities against the person who drafted the provision giving
rise to such ambiguities, or other such rule of interpretation shall be applied
against any party with respect to this Agreement.
Section 30. Governing Law. This Agreement and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the internal laws of Delaware applicable to contracts to be made
and performed entirely within Delaware.
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<PAGE>
Section 31. Counterparts. This Agreement may be executed in counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and both such counterparts shall together constitute but one and the
same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.
Section 33. Grammatical Construction. Throughout this Agreement, where
such meanings would be appropriate, (a) any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms (e.g., references to "he"
shall also include "she" and "it" and references to "who" and "whom" shall also
include "which") and (b) the plural form of nouns and pronouns shall include the
singular and vice-versa.
Section 34. Special Exempt Person Provisions.
(a) Subject to subsection (d) of this Section 34, David R. Hill shall
continue to be an Exempt Person as defined in Section 1(q) of this Agreement if
and only for so long as the amount of Common Stock (expressed as a percentage of
the total Common Stock outstanding) beneficially owned by him does not, as a
result of additional acquisitions of Common Stock by him exceed the sum of (i)
the amount of Common Stock, expressed as the same percentage, beneficially owned
by such Person as of the date of this Agreement, as such beneficial ownership
may be increased from time to time pursuant to subsections (b) and (c) of this
Section 34, and (ii) 1 percent of the amount of clause (i).
(b) The amount of Common Stock allowed to be beneficially owned by
David R. Hill under clause (i) of subsection (a) of this Section 34 in
determining the status of David R. Hill as an Exempt Person, shall be increased
by any Common Stock, any warrants, options or rights issued by the Company to
acquire Common Stock, any securities exchangeable for or convertible into Common
Stock, or any warrants, options or rights issued by the Company to acquire any
such exchangeable or convertible securities, acquired by David R. Hill pursuant
to any Permitted Acquisition or Permitted Acquisitions.
(c) The amount of Common Stock allowed to be beneficially owned by
David R. Hill under clause (i) of subsection (a) of this Section 34, shall be
increased as a result of (i) an acquisition of Common Stock by the Company or
any of its Subsidiaries which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by David R.
Hill, or (ii) David R. Hill becoming the beneficial owner of additional
securities or more of the Common Stock then outstanding solely as a result of an
Exempt Event.
(d) Notwithstanding subsection (a) of this Section 34, in the event
that David R. Hill acquires additional shares of Common Stock which, without
taking this subsection (d) into account, would otherwise result in David R. Hill
no longer being considered an Exempt Person, David R. Hill shall continue an
Exempt Person as long as, within 10 business days after the Company notifies
David R. Hill of such increased beneficial ownership, he sells or otherwise
transfers or
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<PAGE>
disposes of Common Stock of the Company so that, after giving effect to those
transactions, he would be considered an Exempt Person without taking into
account this subsection (d).
* * * * *
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<PAGE>
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.
Davel Communications Group, Inc.
By /s/ David Hill
Title: Chairman
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent
By /s/ H.E. Bradford
Title: Vice President
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