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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10/A
(AMENDMENT NO. 3)
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
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THE ASSOCIATED GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 51-0260858
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
200 Gateway Towers, Pittsburgh, Pennsylvania 15222
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 412-281-1907
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, Class A, par value $.10 per share
Common Stock, Class B, par value
$.10 per share
Preferred Stock Purchase Rights
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
The Registration Statement of The Associated Group, Inc., a Delaware
corporation (the "Company"), on Form 10, dated October 7, 1994, as amended by
Forms 10/A dated November 4, 1994 and November 15, 1994 (File No. 0-24924) (the
"Original Registration Statement") effected the registration of three classes of
the Company's equity securities: Class A Common Stock, par value $.10 per share
(the "Class A Common Stock"), Class B Common Stock, par value $.10 per share
(the "Class B Common Stock" and, together with the Class A Common Stock, the
"Company Common Stock") and the Rights (as defined below). This Form 10/A
(Amendment No. 3) amends only those portions of the Original Registration
Statement that relate to the description of the Rights. Accordingly, that
portion of the Original Registration Statement under the caption "Description of
Capital Stock of the Company -- Stockholder Rights Plan" is hereby amended and
restated to read in its entirety as set forth in Item 11 below.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
Stockholder Rights Plan
On December 14, 1994, the Board of Directors of the Company approved
and adopted a Rights Agreement, dated as of December 14, 1994 (the "Rights
Agreement"), between the Company and Mellon Bank, N.A. and declared a dividend
distribution of one right (a "Right") for each outstanding share of Company
Common Stock. Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-hundredth of a share (a "Unit") of Series A
Preferred Stock at a purchase price per Unit (the "Purchase Price") of $100.00,
subject to adjustment.
On March 17, 1999, the Board of Directors of the Company authorized and
approved the execution and delivery of Amendment No. 1 to Rights Agreement,
dated as of March 17, 1999 ("Amendment No. 1"), between the Company and
ChaseMellon Shareholder Services, L.L.C. (successor to Mellon Bank, N.A.),
amending the Rights Agreement. Amendment No. 1 eliminates the concept of
"Continuing Directors" (as that term is defined in the Rights Agreement)
throughout the Rights Agreement, allowing the full Board of Directors of the
Company to make determinations under the Rights Agreement (including redemption
of the Rights) without the concurrence of Continuing Directors originally
provided for in the Rights Agreement. The description and terms of the Rights
are set forth in the Rights Agreement, as amended by Amendment No. 1 (the
"Amended Rights Agreement"). This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement and Amendment No. 1, filed as Exhibits 4.2 and 4.3,
respectively, and incorporated by reference herein. Capitalized terms used and
not defined herein have the meanings set forth in the Amended Rights Agreement.
The Rights are attached to all Company Common Stock certificates
representing shares outstanding, and no separate Rights Certificates initially
are distributed. The Rights will separate from the Company Common Stock and a
Rights Distribution Date will occur upon the earliest of any of the following
events:
(i) 10 business days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire (the "Stock
Acquisition Date"), beneficial ownership of (a) 30% or more of the
shares of Company Common Stock then outstanding or (b) shares of
Company Common Stock entitled to
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cast 30% or more of the aggregate number of votes entitled to be cast
by all shares of Common Stock then outstanding;
(ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in a person or group
beneficially owning (a) 20% or more of such outstanding shares of
Company Common Stock or (b) shares of Company Common Stock entitled to
cast 20% or more of the aggregate number of votes entitled to be cast
by all shares of Company Common Stock then outstanding (unless such
tender offer or exchange offer is an offer for all outstanding shares
of Company Common Stock which the Company's independent directors
determine to be fair to and otherwise in the best interests of the
Company and its stockholders); or
(iii) 10 days after the date on which a person or persons
become an Adverse Person (as herein defined). A person shall be an
Adverse Person if all of the following shall occur: (a) the Company
Board shall designate a specific limitation on the amount of Company
Common Stock which a specified person may beneficially own, which
amount (the "Ownership Limitation") may be less than, equal to, or more
than the amount of shares of Company Common Stock then owned by such
Person but shall in no event be less than the number of shares entitled
to cast 15% of the aggregate number of votes entitled to be cast by all
shares of Company Common Stock; (b) a majority of the Company's
independent directors, after reasonable inquiry and investigation and
consultation with such persons as it deems appropriate, determines that
(1) beneficial ownership by such person of an amount of Company Common
Stock exceeding the Ownership Limitation is, or would likely be,
intended to cause the Company to repurchase the Company Common Stock
beneficially owned by such person or to cause pressure on the Company
to take action or enter into a transaction or series of transactions
intended to provide such person with short-term financial gain under
circumstances where the majority of Company's independent directors
determines that the best long-term interests of the Company and its
stockholders would not be served by taking such action or entering into
such transactions or series of transactions at that time or (2)
beneficial ownership by such person of an amount of Company Common
Stock exceeding the Ownership Limitation is causing or reasonably
likely to cause a material adverse impact (including, but not limited
to, impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company; and (c) the
beneficial ownership of shares of such person, including its affiliates
and associates, shall (before or after (a) or (b) above) exceed the
Ownership Limitation.
Notwithstanding the foregoing, with respect to events (i) and (ii) above, the
Company Board, or any duly authorized committee thereof, may designate in
accordance with the Amended Rights Agreement a later date as the Rights
Distribution Date.
Until the Rights Distribution Date, (i) the Rights will be evidenced by
the Company Common Stock certificates (which contain a notation incorporating
the Rights Agreement by reference) and will be transferred with and only with
such Company Common Stock certificates, and (ii) the surrender for transfer of
any certificates for Company Common Stock outstanding will also constitute the
transfer of the Rights associated with the Company Common Stock represented by
such certificate. Pursuant to the Rights Agreement, the Company will reserve the
right to require that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock will be issued.
The Rights will not be exercisable until the Rights Distribution Date
and will expire at the close of business on the tenth anniversary of the
issuance of the Rights, unless they are earlier redeemed by the Company as
described below or they expire in accordance with other provisions of the
Amended Rights Agreement.
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As soon as practicable after the Rights Distribution Date, Rights
Certificates will be mailed to holders of record of the Company Common Stock as
of the close of business on the Rights Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Company Common
Stock issued prior to the Rights Distribution Date will be issued with Rights.
In the event that (i) a Person becomes the beneficial owner (except
pursuant to an offer for all outstanding shares of Company Common Stock which
the Company's independent directors determine to be fair to and otherwise in the
best interests of the Company and its stockholders) of (a) more than 30% of the
then outstanding shares of Company Common Stock or (b) shares of Company Common
Stock entitled to cast 30% or more of the aggregate number of votes entitled to
be cast by all shares of Company Common Stock then outstanding, or (ii) a person
becomes an Adverse Person, each holder of a Right will thereafter have the right
to receive, upon exercise, Class B Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the Purchase Price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Amended Rights
Agreement) were, beneficially owned by any Acquiring Person or an Adverse Person
will be null and void. However, Rights are not exercisable following the
occurrence of either of the events set forth above until such time as the Rights
are no longer redeemable by the Company as set forth below.
Following the occurrence of either of the events set forth in clause
(i) of the immediately preceding paragraph, subject to applicable law, the
Company Board may determine to exchange for any or all Rights (other than Rights
held by the Acquiring Person or Adverse Person and certain transferees) Class B
Common Stock at an exchange ratio of one share of Class B Common Stock for each
right to be exchanged. Such exchange shall be on a pro rata basis if less than
all Rights are to be exchanged, and holders of Rights pay no consideration
(other than delivery of the Right) in such exchange. No exchange may be effected
after any person (other than certain exempt persons) becomes the beneficial
owner of 50% or more of the outstanding Company Common Stock or after a person
becomes an Adverse Person.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger which follows a fair offer described in the second preceding paragraph),
or (ii) more than 50% of the Company's assets or earning power is sold or
transferred, each holder of a Right which has not yet been exercised (except
Rights which previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price of the Right. The events
set forth in this paragraph and in the second preceding paragraph are referred
to as "Triggering Events."
Notwithstanding the foregoing, the Rights will not be distributed or
become exercisable as a result of purchases of Company Common Stock by a person
pursuant to a written agreement with the Company (and approved by the Company
Board) that sets limits on such person's ownership of Company Common Stock and
is executed before such person purchases 30% or more of Company Common Stock or
shares with 30% or more of the aggregate voting power of such Company Common
Stock, so long as such person is in substantial compliance with the terms of
such written agreement and the limitations on such person's ownership of Common
Stock continue to be binding.
The Purchase Price payable and the number of Units of Series A
Preferred Stock or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series A Preferred Stock, (ii) if holders of the Series
A Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or convertible securities at less than the current market price
of
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the Series A Preferred Stock, or (iii) upon the distribution to holders of the
Series A Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to a least 1% of the Purchase
Price. The Company may determine not to issue fractional Units and, in lieu
thereof, an adjustment in cash may be made based on the market price of the
Series A Preferred Stock on the last trading date prior to the date of exercise.
In general, at any time until 10 business days following the Stock
Acquisition Date, or such later date as the Company Board may designate, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (payable in cash, Company Common Stock or other consideration deemed
appropriate by the Company's Board of Directors). The Company may not redeem the
Rights if a person has previously become an Adverse Person. Immediately upon the
action of the Company Board ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$.01 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Class B Common Stock of the Company (or for other consideration)
or for common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Amended Rights Agreement may be amended
by the Company Board prior to the Rights Distribution Date. After the Rights
Distribution Date, the provisions of the Amended Rights Agreement may be amended
by the Company Board in order to cure any ambiguity, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person or Adverse Person), or to shorten or lengthen any time
period under the Amended Rights Agreement.
Each share of Common Stock of the Company outstanding at the close of
business at the Time of Distribution received one Right. So long as the Rights
are attached to the Company Common Stock one Right (as such number may be
adjusted pursuant to the provisions of the Amended Rights Agreement) is deemed
to be delivered for each share of Company Common Stock issued or transferred by
the Company after the Time of Distribution. In addition, following the Rights
Distribution Date and prior to the expiration or redemption of the Rights, the
Company may issue Rights when it issues Company Common Stock only if the Company
Board deems it to be necessary or appropriate, or in connection with the
issuance of shares of Company Common Stock pursuant to the exercise of stock
options, under employee plans or upon the exercise, conversion or exchange of
certain securities of the Company granted or existing prior to the Rights
Distribution Date. A number of shares of Series A Preferred Stock equal to
1/100th of the number of shares of Company Common Stock outstanding at the Time
of Distribution has been reserved for issuance upon exercise of the Rights.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company in a manner which causes the Rights to become discount Rights, unless
the offer is conditioned on a substantial number of Rights being acquired. The
Rights, however, should not affect any prospective offeror willing to make an
offer at a fair price and otherwise in the best interests of the Company and its
stockholders or willing to negotiate with the Company Board. The Rights should
not interfere with any merger or other business combination
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approved by the Company Board since the Company Board may, at its option, at any
time within 10 business days following the Stock Acquisition Date (or such later
date or dates as the Board properly determines) redeem all but not less than all
the then outstanding Rights at the Redemption Price.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements and Financial Statement Schedules.
Not applicable.
Exhibits. The following exhibits are filed as a part of this Form 10/A:
Exhibit
Number
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2.1 Agreement and Plan of Distribution, dated as of December 14,
1994, among Associated Communications Corporation, Associated
Communications of Delaware, Inc. and Associated Cellular
Holdings, Inc., filed as Exhibit 2.1 to Registration Statement
on Form 10/A dated November 15, 1994 and incorporated herein by
reference.*
3.1 Restated Certificate of Incorporation, filed as Exhibit 3.1 to
Registration Statement on Form 10/A dated November 15, 1994 and
incorporated herein by reference.*
3.2 Amended and Restated By-Laws, filed herewith.
4.1 Common Stock Certificates, filed as Exhibits 4.2 and 4.3 to
Form 8-K, dated December 22, 1994 and incorporated herein by
reference.*
4.2 Rights Agreement, dated as of December 14, 1994, by and between
the Company and Mellon Bank, N.A., filed herewith.
4.3 Amendment No. 1 to Rights Agreement, dated as of March 17, 1999,
between the Company and ChaseMellon Shareholder Services, L.L.C.
(successor to Mellon Bank, N.A.), filed herewith.
10.1 Tax Disaffiliation Agreement, dated as of December 14, 1994, by
and among Associated Communications Corporation, Associated
Communications of Delaware, Inc. and Associated Cellular
Holdings, Inc., filed as Exhibit 10.1 to Registration Statement
on Form 10/A dated November 15, 1994 and incorporated herein by
reference.*
10.2 The Associated Group, Inc. 1994 Amended and Restated Stock
Option and Incentive Award Plan, filed as Exhibit 10.2 to Annual
Report on Form 10-K for the fiscal year ended December 31, 1997,
and incorporated herein by reference.*
10.3 Associated RT, Inc. (now known as True Position, Inc.) 1995
Stock Incentive Plan, filed as Exhibit 10.3 to Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 and
incorporated herein by reference.*
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Exhibit
Number
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10.4 Form of Employment Agreement, dated December 15, 1994, between
Associated Communications of Delaware, Inc. and Myles P.
Berkman, filed as Exhibit 10.6 to Registration Statement on Form
10/A dated November 15, 1994 and incorporated herein by
reference.*
10.5 Form of Employment Agreement, dated December 15, 1994, between
Associated Communications of Delaware, Inc. and David J.
Berkman, filed as Exhibit 10.7 to Registration Statement on Form
10/A dated November 15, 1994 and incorporated herein by
reference.*
10.6 Employment Agreement, dated as of August 19, 1996, between
Associated Communications, L.L.C. and Alex J. Mandl, filed as
Exhibit 99.2 to Form 8-K, dated September 6, 1996 and
incorporated herein by reference.*
10.7 Margin Agreement, dated January 31, 1995, by and between
Associated Investments, Inc. and Pershing, a Division of
Donaldson, Lufkin & Jenrette Securities Corporation, filed as
Exhibit 10.9 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 and incorporated herein by reference.*
10.8 Corporate Margin Account Application and Agreement, dated
February 15, 1995, by and between Associated Investments, Inc.
and Goldman Sachs & Co., filed as Exhibit 10.10 to Annual Report
on Form 10-K for the fiscal year ended December 31, 1994 and
incorporated herein by reference.*
10.9 Letter Agreement, dated as of March 6, 1998 by and between
Associated Investments, Inc. and Goldman Sachs & Co., filed as
Exhibit 10.10 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 and incorporated herein by reference.*
10.10 Letter Agreement, dated as of December 12, 1997, by and between
Associated Investments, Inc. and PNC Bank, National Association,
filed as Exhibit 10.11 to Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and incorporated by
reference herein.*
10.11 Form of Amended and Restated Discretionary Line of Credit Demand
Note by and between Associated Investments, Inc. and PNC Bank,
National Association, filed as Exhibit 10.12 to Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 and
incorporated by reference herein.*
10.12 Form of Amended and Restated Pledge Agreement by Associated
Investments, Inc. in favor of PNC Bank, National Association,
filed as Exhibit 10.13 to Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and incorporated by
reference herein.*
10.13 Client Agreement, dated January 28, 1997, by and between
Associated Investments, Inc. and Lehman Brothers, filed as
Exhibit 10.13 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 and incorporated herein by reference.*
10.14 Agreement, dated September 29, 1997, among Teligent, L.L.C.,
Digital Services
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Corporation, Telcom-DTS Investors, L.L.C., Microwave Services
Inc., The Associated Group, Inc. and certain other parties,
filed as Exhibit 1 to Schedule 13D of the Company with regard to
its holdings in Teligent, Inc. and dated as of December 8, 1997
and incorporated herein by reference.*
10.15 Stockholders Agreement, dated as of November 26, 1997, by and
among Teligent, Inc., Microwave Services, Inc., Telcom-DTS
Investors, L.L.C., and NTT Investment Inc., filed as Exhibit 2
to Schedule 13D of the Company with regard to its holdings in
Teligent, Inc. and dated as of December 8, 1997, and
incorporated herein by reference.*
10.16 Registration Rights Agreement, dated as of March 6, 1998, by and
between Teligent, Inc. and Microwave Services, Inc., filed as
Exhibit 1 to Schedule 13D/A of the Company with regard to its
holdings in Teligent, Inc. and dated as of March 9, 1998, and
incorporated herein by reference.*
21 Subsidiaries of the Registrant, filed as Exhibit 21 to Annual
Report on Form 10-K for the fiscal year ended December 31, 1997,
and incorporated by reference herein.*
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* Previously filed and incorporated by reference
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE ASSOCIATED GROUP, INC.
(Registrant)
Date: March 25, 1998 By: /s/ Myles P. Berkman
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Myles P. Berkman
Chairman, President, and
Chief Executive Officer
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EXHIBIT INDEX
Exhibit
Number
2.1 Agreement and Plan of Distribution, dated as of December 14, 1994,
among Associated Communications Corporation, Associated Communications
of Delaware, Inc. and Associated Cellular Holdings, Inc., filed as
Exhibit 2.1 to Registration Statement on Form 10/A dated November 15,
1994 and incorporated herein by reference.*
3.1 Restated Certificate of Incorporation, filed as Exhibit 3.1 to
Registration Statement on Form 10/A dated November 15, 1994 and
incorporated herein by reference.*
3.2 Amended and Restated By-Laws, filed herewith.
4.1 Common Stock Certificates, filed as Exhibits 4.2 and 4.3 to Form 8-K,
dated December 22, 1994 and incorporated herein by reference.*
4.2 Rights Agreement, dated as of December 14, 1994, by and between the
Company and Mellon Bank, N.A., filed herewith.
4.3 Amendment No. 1 to Rights Agreement, dated as of March 17, 1999,
between the Company and ChaseMellon Shareholder Services, L.L.C.
(successor to Mellon Bank, N.A.), filed herewith.
10.1 Tax Disaffiliation Agreement, dated as of December 14, 1994, by and
among Associated Communications Corporation, Associated Communications
of Delaware, Inc. and Associated Cellular Holdings, Inc., filed as
Exhibit 10.1 to Registration Statement on Form 10/A dated November 15,
1994 and incorporated herein by reference.*
10.2 The Associated Group, Inc. 1994 Amended and Restated Stock Option and
Incentive Award Plan, filed as Exhibit 10.2 to Annual Report on Form
10-K for the fiscal year ended December 31, 1997, and incorporated
herein by reference.*
10.3 Associated RT, Inc. (now known as True Position, Inc.) 1995 Stock
Incentive Plan, filed as Exhibit 10.3 to Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 and incorporated herein by
reference.*
10.4 Form of Employment Agreement, dated December 15, 1994, between
Associated Communications of Delaware, Inc. and Myles P. Berkman, filed
as Exhibit 10.6 to Registration Statement on Form 10/A dated November
15, 1994 and incorporated herein by reference.*
10.5 Form of Employment Agreement, dated December 15, 1994, between
Associated Communications of Delaware, Inc. and David J. Berkman, filed
as Exhibit 10.7 to Registration Statement on Form 10/A dated November
15, 1994 and incorporated herein by reference.*
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10.6 Employment Agreement, dated as of August 19, 1996, between Associated
Communications, L.L.C. and Alex J. Mandl, filed as Exhibit 99.2 to Form
8-K, dated September 6, 1996 and incorporated herein by reference.*
10.7 Margin Agreement, dated January 31, 1995, by and between Associated
Investments, Inc. and Pershing, a Division of Donaldson, Lufkin &
Jenrette Securities Corporation, filed as Exhibit 10.9 to Annual Report
on Form 10-K for the fiscal year ended December 31, 1994 and
incorporated herein by reference.*
10.8 Corporate Margin Account Application and Agreement, dated February 15,
1995, by and between Associated Investments, Inc. and Goldman Sachs &
Co., filed as Exhibit 10.10 to Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and incorporated herein by
reference.*
10.9 Letter Agreement, dated as of March 6, 1998 by and between Associated
Investments, Inc. and Goldman Sachs & Co., filed as Exhibit 10.10 to
Annual Report on Form 10-K for the fiscal year ended December 31, 1997
and incorporated herein by reference.*
10.10 Letter Agreement, dated as of December 12, 1997, by and between
Associated Investments, Inc. and PNC Bank, National Association, filed
as Exhibit 10.11 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 and incorporated by reference herein.*
10.11 Form of Amended and Restated Discretionary Line of Credit Demand Note
by and between Associated Investments, Inc. and PNC Bank, National
Association, filed as Exhibit 10.12 to Annual Report on Form 10-K for
the fiscal year ended December 31, 1997 and incorporated by reference
herein.*
10.12 Form of Amended and Restated Pledge Agreement by Associated
Investments, Inc. in favor of PNC Bank, National Association, filed as
Exhibit 10.13 to Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and incorporated by reference herein.*
10.13 Client Agreement, dated January 28, 1997, by and between Associated
Investments, Inc. and Lehman Brothers, filed as Exhibit 10.13 to Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 and
incorporated herein by reference.*
10.14 Agreement, dated September 29, 1997, among Teligent, L.L.C., Digital
Services Corporation, Telcom-DTS Investors, L.L.C., Microwave Services
Inc., The Associated Group, Inc. and certain other parties, filed as
Exhibit 1 to Schedule 13D of the Company with regard to its holdings in
Teligent, Inc. and dated as of December 8, 1997 and incorporated herein
by reference.*
10.15 Stockholders Agreement, dated as of November 26, 1997, by and among
Teligent, Inc., Microwave Services, Inc., Telcom-DTS Investors, L.L.C.,
and NTT Investment Inc., filed as Exhibit 2 to Schedule 13D of the
Company with regard to its holdings in Teligent, Inc. and dated as of
December 8, 1997, and incorporated herein by reference.*
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10.16 Registration Rights Agreement, dated as of March 6, 1998, by and
between Teligent, Inc. and Microwave Services, Inc., filed as Exhibit 1
to Schedule 13D/A of the Company with regard to its holdings in
Teligent, Inc. and dated as of March 9, 1998, and incorporated herein
by reference.*
21 Subsidiaries of the Registrant, filed as Exhibit 21 to Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, and incorporated
by reference herein.*
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* Previously filed and incorporated by reference
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FORM OF
AMENDED AND RESTATED BY-LAWS OF THE ASSOCIATED GROUP, INC.
(As of March 15, 1999)
ARTICLE I
OFFICES
The registered office of the Corporation in the State of
Delaware shall be in the City of Wilmington, County of New Castle, State
of Delaware. The Corporation shall have offices at such other places as
the Board of Directors may from time to time determine.
ARTICLE II
STOCKHOLDERS
Section 1. ANNUAL MEETING.
The annual meeting of the stockholders for the election of
directors and for the transaction of such other business as may properly
come before the meeting shall be held on such date as the Board of
Directors shall each year fix. Each such annual meeting shall be held at
such place, within or without the State of Delaware, and hour as shall be
determined by the Board of Directors. The day, place and hour of each
annual meeting shall be specified in the notice of the annual meeting. The
meeting may be adjourned from time to time and place to place until its
business is completed.
Section 2. SPECIAL MEETINGS.
Unless otherwise prescribed by law or the Certificate of
Incorporation, special meetings of the stockholders may only be called
pursuant to a resolution approved by a majority of the Board of Directors.
Stockholders shall not be entitled to call a special meeting of the
stockholders, nor to require the Board of Directors to call such a special
meeting. Special meetings of the stockholders may be held at any time and
at any place within or without the State of Delaware. At a special meeting
of stockholders, only such business shall be conducted as shall be
specified in the notice of meeting (or any supplement thereto).
Section 3. NOTICE OF MEETING.
Notice of every meeting of the stockholders shall be given in
the manner prescribed by law.
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Section 4. QUORUM.
Except as otherwise required by law, the Certificate of
Incorporation or these By-Laws, the presence in person or by proxy of
stockholders who are entitled to cast at least a majority of the total
number of votes entitled to be cast shall constitute a quorum. When a
quorum is present at a meeting, a majority of the number of votes entitled
to be cast by the stockholders present at the meeting in person or by
proxy shall decide any question brought before such meeting unless the
question is one upon which a different vote is required by express
provision of the laws of Delaware, the Certificate of Incorporation or
these By-Laws. If a quorum shall fail to attend any meeting, the presiding
officer at the meeting may adjourn the meeting to another place, date or
time.
Section 5. NOMINATION OF DIRECTORS.
Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors of the
Corporation. Nominations of persons for election as directors of the
Corporation may be made at any annual meeting of stockholders only (i) by
or at the direction of the Board of Directors (or any duly authorized
committee thereof), or (ii) by any stockholder of the Corporation (A) who
is a stockholder of record on the date of the giving of the notice
provided for in this Section 5 and on the record date for the
determination of stockholders entitled to vote at such annual meeting and
(B) who complies with the notice procedures set forth in this Section 5.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must have given
timely notice thereof in proper written form to the Secretary of the
Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than ninety (90) days nor more than one hundred
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first
occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth (a) as to each person whom the stockholder
proposes to nominate for election as a director (i) the name, age,
business address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class or series and
number of shares of capital stock of the Corporation which are owned
beneficially or of record by the person and (iv) any other information
relating to the person that would be required to be
<PAGE>
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors
pursuant to Section 14 under the Securities Exchange Act of 1934, as now
or hereafter amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice
(i) the name and record address of such stockholder, (ii) the class or
series and number of shares of capital stock of the Corporation which are
owned beneficially or of record by such stockholder; (iii) a description
of all arrangements or understandings between such stockholder and each
proposed nominee and any other person or persons (including their names)
pursuant to which the nominations) are to be made by such stockholder,
(iv) a representation that such stockholder intends to appear in person or
by proxy at the meeting to nominate the persons named in its notice and
(v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to
be made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a nominee and
to serve as a director if elected. The Corporation may require any
proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth
herein. If the presiding officer at the annual meeting determines that a
nomination was not made in accordance with the foregoing procedures, he
shall so declare to the meeting that the nomination was defective and such
defective nomination shall be disregarded.
Section 6. OTHER BUSINESS.
No business may be transacted at an annual meeting of
stockholders, other than business that is either (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (or any duly authorized committee thereof), (b)
otherwise properly brought before the annual meeting by or at the
direction of the Board of Directors (or any duly authorized committee
thereof) or (c) otherwise properly brought before the annual meeting by a
stockholder of the Company (i) who is a stockholder of record on the date
of the giving of the notice provided for in this Section 6 and on the
record date for the determination of stockholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth
in this Section 6.
In addition to any other applicable requirements, for business
to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in proper written form
to the Secretary of the Corporation.
<PAGE>
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than ninety (90) days nor more than one hundred
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder proposes to
bring before the annual meeting (i) a brief description of the business
desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and record
address of such stockholder, (iii) the class or series and number of
shares of capital stock of the Corporation which are owned beneficially or
of record by such stockholder, (iv) a description of all arrangements or
understandings between such stockholder and any other person or persons
(including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business and (v) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before
the meeting.
Notwithstanding any other provision of these By-Laws, no
business shall be conducted at the annual meeting of stockholders except
business brought before the annual meeting in accordance with the
procedures set forth in this Section 6, provided, however, that nothing in
this Section 6 shall be deemed to preclude discussion by any stockholder
of any business properly brought before the annual meeting in accordance
with such procedures. If the presiding officer at the annual meeting
determines that business was not properly brought before the meeting in
accordance with the provisions of this Section 6, he shall so declare to
the meeting and such business shall not be transacted.
ARTICLE III
DIRECTORS
Section 1. POWERS.
The business, property and affairs of the Corporation shall be
managed by or under the direction of its Board of Directors, which shall
have and may exercise all the powers of the Corporation to do all such
lawful acts and things as are not by law, the Certificate of Incorporation
or these By-Laws directed or required to be exercised or done by the
stockholders.
Section 2. REGULAR MEETINGS.
<PAGE>
Regular meetings of the Board of Directors shall be held at
such times and places as the Board of Directors may from time to time
determine.
Section 3. SPECIAL MEETINGS.
Special meetings of the Board of Directors may be called at
any time, at any place and for any purpose by the Chairman of the Board,
and must be called by the President or any other officer of the
Corporation, upon the request of a majority of the directors then in
office.
Section 4. NOTICE OF MEETINGS.
Notice of any meeting of the Board of Directors, other than a
regular meeting, shall be given to each director at his usual place of
business, or at such other address as shall have been furnished by him for
the purpose. Such notice shall be given at least twenty-four hours before
the meeting by telephone or by being personally delivered, mailed, or
telegraphed. Such notice shall state the time and place of the meeting
but, unless otherwise required by law, the Certificate of Incorporation or
these By-Laws, need not include a statement of the business to be
transacted at, or the purpose of, any such meeting.
Section 5. PARTICIPATION IN MEETINGS BY CONFERENCE
TELEPHONE.
Members of the Board of Directors, or of any committee
thereof, may participate in a meeting of such Board or committee by means
of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other and
such participation shall constitute presence in person at such meeting.
Section 6. COMPENSATION OF DIRECTORS.
The Board of Directors may from time to time by resolution
authorize the payment of fees or other compensation to the directors for
services as such to the Corporation, including, but not limited to, fees
and traveling expenses for attendance at all meetings of the Board or of
any committee, and determine the amount of such fees and compensation.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor in amounts authorized or otherwise approved from time to time by
the Board of Directors.
Section 7. VACANCIES.
<PAGE>
Unless otherwise required by law or the Certificate of
Incorporation, vacancies arising through death, resignation, removal, an
increase in the number of directors or otherwise may be filled only by a
majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office
until the next annual election and until their successors are duly elected
and qualified, or until their earlier death, resignation or removal.
ARTICLE IV
OFFICERS
Section 1. NUMBER.
The officers of the Corporation shall be elected by the Board
of Directors. Such officers shall initially be elected as soon as is
convenient by the Board of Directors and thereafter, in the absence of
earlier resignations or removals, shall be elected at the first meeting of
the Board of Directors following any annual meeting of stockholders. The
officers shall be a Chairman of the Board, a President, such number of
Vice Presidents as the Board of Directors may from time to time determine,
a Secretary, an Assistant Secretary, and a Treasurer. The Chairman of the
Board shall be the chief executive officer. Any person may hold two or
more offices at the same time. The Chairman of the Board shall be chosen
from among the Board of Directors, but the other officers need not be
members of the Board.
Section 2. ADDITIONAL OFFICERS.
The Board of Directors may appoint such other officers, agents
and employees as it shall deem appropriate.
Section 3. TERMS OF OFFICE.
Each officer of the Corporation shall hold his respective
office until his successor is elected and qualified or until his earlier
resignation or removal. Subject to the provisions of any validly existing
agreement, the Board of Directors may at any meeting remove from office
any officer, with or without cause, and may elect a successor; provided
that if action is taken to remove the Chairman, the President, the
Secretary, the Treasurer or any Vice President, the notice of meeting or
waiver of notice thereof shall state that one of the purposes of the
meeting was to consider and take action to remove such officer.
Section 4. DUTIES.
<PAGE>
The officers, agents and employees shall perform the duties
and exercise the powers usually incident to the offices or positions held
by them respectively, and/or such other duties and powers as may be
assigned to them from time to time by the Board of Directors or the chief
executive officer and without limiting the generality of the foregoing,
the following officers shall have the following powers and duties:
(a) Chairman of the Board. The Chairman of the Board,
when present, shall preside at all meetings of the stockholders and
of the Board of Directors, and shall have such other powers and
perform such other duties as the Board of Directors may prescribe
from time to time.
(b) President. The President shall be the chief
executive officer of the Corporation, shall be charged with general
supervision of the affairs of the Corporation, shall exercise the
powers and authority and perform all of the duties commonly incident
to his office, shall in the absence or disability of the Chairman of
the Board preside at all meetings of the stockholders and of the
Board of Directors if he is a director, and shall perform such other
duties as the Board of Directors may prescribe from time to time.
(c) Vice Presidents. The Vice President or Vice
Presidents shall perform such duties as the Board of Directors may
prescribe from time to time.
(d) Secretary. The Secretary or in his absence an
Assistant Secretary shall keep the minutes of all meetings of
stockholders and of the Board of Directors, give and serve all
notices, attend to such correspondence as may be assigned to him,
keep in safe custody the seal of the Corporation, and affix such
seal to all such instruments properly executed as may require it,
and shall perform such other duties as the Board of Directors may
prescribe from time to time.
(e) Treasurer. The Treasurer shall have the care and
custody of the moneys, funds, valuable papers and documents of the
Corporation and shall have all the powers and duties commonly
incident to his office. He may endorse for deposit or collection all
checks, notes, etc., payable to the Corporation or to its order. In
addition to the foregoing, the Treasurer shall have such other
duties as may be prescribed by the Board of Directors from time to
time.
Section 5. COMPENSATION.
<PAGE>
The compensation of the Chairman of the Board, President, all
Vice Presidents, the Secretary and Treasurer shall be fixed by the Board
of Directors, and the fact that any officer is a director shall not
preclude him from receiving compensation or from voting upon the
resolution providing the same. The compensation of Assistant Secretaries
and Assistant Treasurers may be fixed by the Chairman of the Board, or in
his absence, the President or, if there is no President, by the then
senior executive officer of the Corporation or the Board of Directors.
ARTICLE V
CAPITAL STOCK
Section 1. CERTIFICATES OF STOCK.
Every stockholder shall be entitled to a certificate or
certificates for shares of the capital stock of the Corporation in such
form as may be prescribed or authorized by the Board of Directors, duly
numbered and setting forth the number and kind of shares represented
thereby. Such certificates shall be signed by the Chairman of the Board,
the President or a Vice President and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary. Any of such
signatures and the corporate seal affixed to any stock certificate may be
in facsimile.
In case any officer who has signed or whose facsimile
signature has been placed on a certificate has ceased to be such officer
before the certificate has been issued, such certificate may nevertheless
be issued and delivered by the Corporation or its transfer agent with the
same effect as if he were such officer on the date of issue.
Section 2. TRANSFER OF STOCK.
Shares of the capital stock of the Corporation shall be
transferable only upon the books of the Corporation upon the surrender of
the certificate or certificates properly assigned and endorsed for
transfer. If the Corporation has a transfer agent or agents or transfer
clerk and registrar of transfers acting on its behalf, the signature of
any officer or representative thereof may be in facsimile.
The Board of Directors may appoint a transfer agent and one or
more co-transfer agents and a registrar of transfer and may make or
authorize the transfer agents to make all such rules and regulations
deemed expedient concerning the issue, transfer and registration of shares
of stock.
Section 3. LOST CERTIFICATES.
In case of loss or mutilation or destruction of a stock
certificate, a duplicate certificate may be issued upon such terms as may
be determined or authorized by the
<PAGE>
Board of Directors or by the Chairman of the Board or the President if the
Board of Directors does not do so.
ARTICLE VI
BOOKS AND RECORDS
Unless otherwise expressly required by the laws of Delaware,
the books and records of the Corporation may be kept outside of Delaware.
ARTICLE VII
WAIVER OF NOTICES
Any stockholder, director or officer may, in writing or by
telegram or cable, at any time waive any notice or other formality
required by statute, the Certificate of Incorporation or these By-Laws.
Such waiver of notice, whether given before or after any meeting or
action, shall be deemed equivalent to notice. Presence of a stockholder
either in person or by proxy at any stockholders' meeting and presence of
any director at any meeting of the Board of Directors shall constitute a
waiver of such notice as may be required by any statute, the Certificate
of Incorporation or these By-Laws.
ARTICLE VIII
INDEMNIFICATION
Section 1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR
PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT
OF THE CORPORATION.
Subject to Section 3 of this Article VIII, the Corporation
shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of
the fact that he is or was a director or officer of the Corporation, or is
or was a director or officer of the Corporation serving at the request of
the Corporation as a director or officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the
<PAGE>
Corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS BY OR IN
THE RIGHT OF THE CORPORATION.
Subject to Section 3 of this Article VIII, the Corporation
shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving
at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation; except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem
proper.
Section 3. AUTHORIZATION OF INDEMNIFICATION.
Any indemnification under this Article VIII (unless ordered by
a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the director or
officer is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 1 or Section 2 of this Article
VIII, as the case may be. Such determination shall be made (i) by the
Board of Directors by a majority vote of the directors who are not parties
to such action, suit or proceeding, even though less than a quorum, or
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the
stockholders. To the extent, however, that a director or officer of the
Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding described above, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of authorization in the
specific case.
Section 4. GOOD FAITH DEFINED.
For purposes of any determination under Section 3 of this
Article VIII, a person shall be deemed to have acted in good faith and in
a manner he reasonably believed
<PAGE>
to be in or not opposed to the best interests of the Corporation, or, with
respect to any criminal action or proceeding, to have had no reasonable
cause to believe his conduct was unlawful, if his action is based on (a)
the records (including without limitation books of account) of the
Corporation or another enterprise; (b) such information, opinions, reports
or statements presented to the Corporation or another enterprise by (i)
any of the officers, employees or Board committees of the Corporation or
another enterprise in the course of their duties, (ii) an independent
certified public accountant or (iii) any other person as to matters he
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf
of the Corporation or another enterprise or (c) the advice of legal
counsel for the Corporation or another enterprise. The term "another
enterprise" as used in this Section 4 shall mean any other corporation or
any partnership, joint venture, trust, employee benefit plan or other
enterprise of which such person is or was serving at the request of the
Corporation as a director, officer, employee or agent. The provisions of
this Section 4 shall not be deemed to be exclusive or to limit in any way
the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Sections 1 or 2 of this
Article VIII, as the case may be.
Section 5. INDEMNIFICATION BY A COURT.
Notwithstanding any contrary determination in the specific
case under Section 3 of this Article VIII, and notwithstanding the absence
of any determination thereunder, any director or officer may apply to the
Court of Chancery (or, if so provided by law, any other court of competent
jurisdiction) in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 1 and 2 of this Article VIII. The
basis of such indemnification by such court shall be a determination by
such court that indemnification of the director or officer is proper in
the circumstances because he has met the applicable standards of conduct
set forth in Sections 1 or 2 of this Article VIII, as the case may be.
Neither a contrary determination in the specific case under Section 3 of
this Article VIII nor the absence of any determination thereunder shall be
a defense to such application or create a presumption that the director or
officer seeking indemnification has not met any applicable standard of
conduct. Notice of any application for indemnification pursuant to this
Section 5 shall be given to the Corporation promptly upon the filing of
such application. If successful, in whole or in part, the director or
officer seeking indemnification shall also be entitled to be paid the
expense of prosecuting such application.
Section 6. EXPENSES PAYABLE IN ADVANCE.
Expenses incurred by a director or officer in defending or
investigating a threatened or pending action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall
<PAGE>
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article VIII.
Section 7. NONEXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES.
The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of
expenses may be entitled under any By-Law, agreement, contract, vote of
stockholders or disinterested directors or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office, it being the policy of the Corporation
that indemnification of the persons specified in Sections 1 and 2 of this
Article VIII shall be made to the fullest extent permitted by law. The
provisions of this Article VIII shall not be deemed to preclude the
indemnification of any person who is not specified in Sections 1 or 2 of
this Article VIII but whom the Corporation has the power or obligation to
indemnify under the provisions of the General Corporation Law of the State
of Delaware, or otherwise.
Section 8. INSURANCE.
The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director or officer of the Corporation, or
is or was a director or officer of the Corporation serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether
or not the Corporation would have the power or the obligation to indemnify
him against such liability under the provisions of this Article VIII.
Section 9. CERTAIN DEFINITIONS.
For purposes of this Article VIII, references to "the
Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors
or officers, so that any person who is or was a director or officer of
such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, shall stand in the same position under the provisions of
this Article VIII with respect to the resulting or surviving corporation
as he would have with respect to such constituent corporation if its
separate existence had continued. For purposes of this Article VIII,
<PAGE>
references to "fines" shall include any excise taxes assessed on a person
with respect to any employee benefit plan; and references to "serving at
the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in
good faith and in a manner he reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article VIII.
Section 10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article VIII shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a director or officer and shall inure to the benefit of the heirs,
executors and administrators and other legal representatives of such a
person.
Section 11. LIMITATION ON INDEMNIFICATION.
Notwithstanding anything contained in this Article VIII to the
contrary, except for proceedings to enforce rights to indemnification
(which shall be governed by Section 5 hereof), the Corporation shall not
be obligated to indemnify any director or officer in connection with a
proceeding (or part thereof) initiated by such person unless such
proceeding (or part thereof) was authorized or consented to by the Board
of Directors of the Corporation.
Section 12. INDEMNIFICATION OF EMPLOYEES AND AGENTS.
The Corporation may, to the extent authorized from time to
time by the Board of Directors, provide rights to indemnification and to
the advancement of expenses to employees and agents of the Corporation
similar to those conferred in this Article VIII to directors and officers
of the Corporation.
Section 13. CONTRACT RIGHT
The foregoing provisions of this Article VIII shall be deemed
to be a contract between the Corporation and each director or officer who
serves in such capacity at any time while this Article VIII is in effect,
and any repeal or modification of this Article VIII shall not affect any
rights or obligations then existing with respect to any state of facts
then or theretofore existing or any action, suit or proceeding theretofore
or thereafter brought based in whole or in part upon any such state of
facts.
<PAGE>
ARTICLE IX
SEAL
The corporate seal shall bear the name of the Corporation, the
date 1981 and the words "Corporate Seal Delaware."
<PAGE>
RIGHTS AGREEMENT
-------------------
RIGHTS AGREEMENT, dated as of December 14, 1994, between The
Associated Group, Inc., a Delaware corporation formerly known as
Associated Communications of Delaware, Inc. (the "Company"), and Mellon
Bank, N.A., a federally chartered banking entity (the "Rights Agent").
W I T N E S S E T H
---------------------
WHEREAS, on December 14, 1994 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company (i) authorized
and declared a dividend distribution of one Right (as hereinafter defined)
for each share of Common Stock (as hereinafter defined) of the Company
outstanding immediately following the original issuance of the Class A
Common Stock (as hereinafter defined) and Class B Common Stock (as
hereinafter defined) to Associated Communications Corporation, a Delaware
corporation ("Associated"), and prior to the time at which Associated
effects the distribution of the Class A Common Stock and Class B Common
Stock (each as hereinafter defined) contemplated by the Agreement and Plan
of Distribution dated as of December 14, 1994 among Associated, the
Company and Associated Cellular Holdings, Inc. (the "Record Date"), and
(ii) authorized the issuance of one Right (as such number may hereinafter
be adjusted pursuant to the provisions of Section 11(i) hereof) for each
share of Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's treasury) and
the Distribution Date (as hereinafter defined) and under certain
circumstances thereafter, each Right initially representing the right to
purchase one one-hundredth of a share of Preferred Stock (as hereinafter
defined) of the Company, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
<PAGE>
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of (i) 30% or more of the shares of Common Stock of the Company
then outstanding or (ii) shares of Common Stock of the Company entitled to cast
30% or more of the aggregate number of votes entitled to be cast by all shares
of Common Stock of the Company then outstanding; provided, however, that
"Acquiring Person" shall not include an Exempt Person (as hereinafter defined).
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Adverse Person" shall mean any Person with respect to
which all of the events set forth in Section 11(a)(ii)(B) hereof have occurred.
(e) "Adverse Person Event" shall mean that all of the events
set forth in Section 11(a)(ii)(B) hereof have occurred.
(f) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(g) "Agreement" means this Rights Agreement as originally
executed or as it may from time to time be supplemented or amended pursuant to
the applicable provisions hereof.
(h) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, or
(B) securities issuable upon exercise of Rights at any time prior to the
<PAGE>
occurrence of a Triggering Event, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which are
Original Rights (as hereinafter defined) or securities issued pursuant to
Section 11(i) hereof in connection with an adjustment made with respect to
any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this subparagraph (ii) as
a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises solely
from a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act; and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (A) of the proviso to subparagraph (ii) of
this paragraph (h)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (h) 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.
(i) "Board" means the Board of Directors of the Company.
(j) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the states in which either the
Rights
<PAGE>
Agent or any transfer agent for the Company's securities is located are
authorized or obligated by law or executive order to close.
(k) "Close of Business" on any given date shall mean 5:00
P.M., 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 time, on the next succeeding
Business Day.
(l) "Class A Common Stock" shall mean the Class A common
stock, par value $.10 per share, of the Company, or any other shares of capital
stock of the Company into which such stock shall be reclassified or changed.
(m) "Class B Common Stock" shall mean Class B common stock,
par value $.10 per share, of the Company, or any other shares of capital stock
of the Company into which such stock shall be reclassified or changed.
(n) "Class B Common Stock Equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(o) "Common Stock" when used with reference to the Company
shall mean the Class A Common Stock together with the Class B Common Stock.
"Common Stock" when used with reference to any Person which shall be organized
in corporate form, other than the Company, shall mean the capital stock or other
equity security with the greatest voting power or the equity securities or other
equity interest having power to control or direct the management of such Person
or, if such Person is a Subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person and which has or have
issued any such outstanding capital stock, equity securities or equity interest.
"Common Stock" when used with reference to any Person which shall not be
organized in corporate form shall mean units of beneficial interest which (i)
shall represent the right to participate generally in the profits and losses of
such Person (including, without limitation, any flow-through tax benefits
resulting from an ownership interest in such Person) and (ii) shall be entitled
to exercise the greatest voting power of such Person or, in the case of a
limited partnership, shall have the power to remove the general partner or
partners.
(p) "Company" shall mean the Person named as the "Company" in
the first paragraph of this Agreement until a successor corporation shall have
become such, or until a Principal Party shall assume, and thereafter be liable
for, all obligations and duties of the Company hereunder pursuant to the
applicable provisions of this Agreement, and thereafter, "Company" shall mean
such successor corporation or Principal Party.
<PAGE>
(q) "Continuing Director" shall mean any member of the Board
(while such Person is a member of the Board) who is not an Acquiring Person or
Adverse Person, or an Affiliate or Associate of an Acquiring Person or Adverse
Person, or a representative or nominee of an Acquiring Person or Adverse Person
or of any such Affiliate or Associate, and who either (i) was a member of the
Board prior to the Stock Acquisition Date (or, for purposes of the second
sentence of Section 26 hereof, prior to the Final Amendment Date) or (ii) on or
subsequent to the relevant date set forth in clause (i) of this Section 1(q)
became a member of the Board and whose nomination for election or election to
the Board was recommended or approved by a majority of the Continuing Directors
then on the Board.
(r) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(s) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(t) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(u) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(v) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(w) "Exchange Ratio" shall have the meaning set forth in
Section 29(a) hereof.
(x) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit or employee stock plan of
the Company or of any Subsidiary of the Company, (iv) any Person or entity
organized, appointed, established or holding Common Stock of the Company by, for
or pursuant to the terms of any such plan, (v) any Person who becomes an
Acquiring Person solely as a result of a reduction in the number of shares of
Common Stock of the Company outstanding due to the repurchase of shares of
Common Stock of the Company by the Company, unless and until any such Person
shall purchase or otherwise become the Beneficial Owner of additional shares of
Common Stock of the Company constituting 1% or more of the then outstanding
shares of Common Stock of the Company, (vi) Associated, until immediately after
the time at which Associated effects the distribution of the Class A Common
Stock and Class B Common Stock contemplated by the Agreement and Plan of
Distribution dated as of December 14, 1994 among Associated, the Company and
Associated Cellular
<PAGE>
Holdings, Inc., or (vii) any Person who or which shall have executed a written
agreement with the Company (which shall have been approved by the Board) prior
to the date on which such Person became the Beneficial Owner of either (A) 30%
or more of the shares of Common Stock then outstanding or (B) shares of Common
Stock entitled to cast 30% or more of the aggregate number of votes entitled to
be cast by all shares of Common Stock then outstanding, which agreement imposes
one or more limitations (the "Thresholds") on the amount of such Person's
Beneficial Ownership of shares of Common Stock, if and so long as the Thresholds
continue to be binding on such Person and such Person is in substantial
compliance (as determined by the Board) with the terms of such written agreement
or of any amendment thereto, which amendment is approved by the Board; provided,
however, that no amendment of any such agreement shall cure any prior breach of
such agreement or any amendment thereto.
(y) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(z) "Fair Offer Exception" shall have the meaning set forth in
Section 11(a)(ii)(A)(2).
(aa) "Final Expiration Date" shall mean the Close of Business
on December 14, 2004.
(bb) "Original Rights" shall mean Rights acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof.
(cc) "Outside Directors" shall mean members of the Board who
are not officers of the Company or any of its Subsidiaries and who are not
Acquiring Persons or Adverse Persons or representatives, nominees, Affiliates or
Associates of Acquiring Persons or Adverse Persons.
(dd) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity and includes, without limitation, an
unincorporated group of persons who, by formal or informal agreement, have
embarked on a common purpose or act.
(ee) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company, having
the rights, powers and preferences as set forth on Exhibit A hereto.
(ff) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
<PAGE>
(gg) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(hh) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of the Agreement.
(ii) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(jj) "Rights" shall have the meaning set forth in the WHEREAS
clause at the beginning of the Agreement.
(kk) "Rights Agent" shall mean the Person named as the "Rights
Agent" in the first paragraph of this Agreement until a successor Rights Agent
shall have become such pursuant to the applicable provisions hereof, and
thereafter, "Rights Agent" shall mean such successor Rights Agent. If at any
time there is more than one Person appointed by the Company as Rights Agent
pursuant to the applicable provisions of this Agreement, "Rights Agent" shall
mean and include each such Person.
(ll) "Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(mm) "Rights Dividend Declaration Date" shall have the meaning
set forth in the WHEREAS clause at the beginning of the Agreement.
(nn) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(oo) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(pp) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(qq) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(rr) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company that an Acquiring Person has become such.
(ss) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which securities or other ownership interest
having
<PAGE>
ordinary voting power sufficient, in the absence of contingencies, to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly beneficially owned, or otherwise
controlled, by such Person and any Affiliate of such Person.
(tt) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(uu) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(vv) "Thresholds" shall have the meaning set forth in Section
1(x) hereof.
(ww) "Trading Day" shall have the meaning set forth in Section
11(d)(ii) hereof.
(xx) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock of 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 act as Co-Rights Agent or appoint
such Co-Rights Agents as it may deem necessary or desirable. Any actions which
may be taken by the Rights Agent pursuant to the terms of this Agreement may be
taken by any such Co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) Until the earliest to occur of:
(i) the Close of Business on the tenth Business Day (or
such specified or unspecified later date as may be determined by the
Board, or any duly authorized committee thereof, before the
occurrence of the Distribution Date) after the Stock Acquisition
Date (or, if the tenth Business Day after the Stock Acquisition Date
occurs before the Record Date, the Close of Business on the Record
Date);
(ii) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by
<PAGE>
the Board, or any duly authorized committee thereof, before the
occurrence of the Distribution Date) after the date that a tender
or exchange offer by any Person (other than an Exempt Person) is
first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange
Act, if upon consummation thereof, such Person would be the
Beneficial Owner of (A) 20% or more of the shares of Common Stock
of the Company then outstanding or (B) shares of Common Stock of
the Company entitled to cast 20% or more of the aggregate number of
votes entitled to be cast by all shares of Common Stock of the
Company then outstanding (irrespective of whether any shares of
Common Stock of the Company are actually purchased pursuant to such
offer), unless such tender or exchange offer is a tender offer or
exchange offer for all outstanding shares of Common Stock of the
Company which complies with the provisions of the Fair Offer
Exception provided for in Section 11(a)(ii)(A)(2) hereof; or
(iii) the Close of Business on the tenth Business Day after
an Adverse Person Event
(the earliest of (i), (ii) and (iii) being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraphs (b) and (c) of this
Section 3) by the certificates for the Common Stock of the
Company registered in the names of the holders of the Common
Stock of the Company either with the summary of the Rights
included under the caption "Description of Capital Stock of the
Company -- Stockholder Rights Plan" in the Information Statement
on Form 10 filed by the Company with the Securities and Exchange
Commission on October 7, 1994, as amended (the "Summary of
Rights"), attached or bearing the legend set forth in Section
3(c) hereof (which certificates for Common Stock of the Company
shall be deemed also to be certificates for Rights) and not by
separate certificates and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock of the Company (including a transfer to the
Company). As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock of the Company as
of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, one or more
rights certificates in substantially the form of Exhibit B hereto
(the "Rights Certificates") evidencing one Right for each share
of Common Stock of the Company so held, subject to adjustment as
provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock of the Company has been made
pursuant to Section 11(i) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights
<PAGE>
Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely
by such Rights Certificates.
(b) As promptly as practicable following the Record Date,
the Company will send a copy of the Summary of Rights by first-class, postage
prepaid mail, to each record holder of the Common Stock of the Company on the
Record Date, at the address of such holder shown on the records of the Company.
With respect to certificates for the Common Stock of the Company outstanding as
of the Record Date, as set forth in paragraph (a) above, until the earlier of
the Distribution Date or the Expiration Date, the Rights will be evidenced by
such certificates for the Common Stock of the Company with or without a copy of
the Summary of Rights attached, and the registered holders of the Common Stock
of the Company shall also be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the Expiration Date, the transfer
of any certificates representing shares of Common Stock of the Company in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock of the Company.
(c) Rights shall be issued in respect of all shares of
Common Stock of the Company which are issued (whether originally issued or from
the Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date, and to the extent provided in Section
22 hereof, in respect of shares of Common Stock of the Company issued after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock of the Company shall also be deemed to be
certificates for Rights, and shall, as promptly as practicable following the
Record Date, bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement (the "Rights
Agreement") between The Associated Group, Inc. (the "Company") and
Mellon Bank, N.A. (the "Rights Agent"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights beneficially owned (as such term is
defined in the Rights Agreement) by any Person who is, was or
becomes an Acquiring Person, an
<PAGE>
Adverse Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may
become null and void. The Rights shall not be exercisable, and shall
be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall
not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Stock of the Company represented by such certificates shall be
evidenced by such certificates alone, and registered holders of Common Stock
of the Company shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock of the Company
represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the exercise price set forth therein (such
exercise price per one one-hundredth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by (i) an
Acquiring Person, an Adverse Person or any Associate or Affiliate of an
Acquiring Person or an Adverse Person, (ii) a transferee of an Acquiring Person
or an Adverse Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person or Adverse Person becomes such or (iii) a
transferee of an Acquiring Person or Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee
<PAGE>
prior to or concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person or Adverse Person to holders of
equity interests in such Acquiring Person or Adverse Person or to any Person
with whom such Acquiring Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which a majority of the Continuing Directors has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance
of the provisions of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend (modified to apply
to an Acquiring Person or an Adverse Person, as applicable):
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an
[Acquiring/Adverse] Person or an Affiliate or Associate of an
[Acquiring/Adverse] Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed under seal on
behalf of the Company by its Chairman of the Board, its President or any Vice
President and by the Treasurer or any Assistant Treasurer, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer,
<PAGE>
books for registration and transfer of the Rights Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a Triggering Event, Class B Common
Stock, other securities, cash or other assets, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer or exchange of any such surrendered Rights Certificate or Rights
Certificates until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate or Rights Certificates and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to each of them of the loss, theft, destruction
or mutilation of a valid Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to each of them,
and reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like
<PAGE>
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) the Final Expiration Date, (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof or
exchanged as provided in Section 29 hereof or (iii) the time at which the Rights
expire pursuant to Section 13(d) hereof (the earliest of (i), (ii) and (iii)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be $100
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate on
the reverse side of the Rights Certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price, as such
amount may be reduced pursuant to Section 11(a)(iii) hereof, per one
one-hundredth of a share of Preferred Stock (or other securities, cash or other
assets, as the case may be) to be purchased as set forth below and an amount
equal to any applicable transfer tax, the Rights Agent shall, subject to
Sections 7(f) and 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent for the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the total
number of one one-hundredths of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a share of
Preferred Stock as are
<PAGE>
to be purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified check, cashier's check or bank
draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Class B Common Stock) of the
Company, pay cash and/or distribute other assets pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other assets are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to require
prior to the occurrence of a Triggering Event that, upon any exercise of Rights,
a number of Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person, Adverse Person or an
Associate or Affiliate of an Acquiring Person or Adverse Person which a majority
of the Continuing Directors in its sole discretion determines is or was involved
in or caused or facilitated, directly or indirectly, such Section 11(a)(ii)
Event, (ii) a transferee of any such Acquiring Person or Adverse Person (or of
any such Associate or Affiliate) who becomes a transferee after such Acquiring
Person or Adverse Person becomes such or (iii) a transferee of any such
Acquiring Person or Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with such Acquiring Person or
Adverse Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from such Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring Person or
Adverse Person or to any Person with whom such Acquiring Person or Adverse
Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority of the Continuing
<PAGE>
Directors has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but the Company and the Rights Agent shall have no
liability to any holder of Rights Certificates or other Person as a result of
the Company's failure to make any designations or determinations with respect to
an Acquiring Person or Adverse Person or any of their Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any 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 assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
assignment or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form or if surrendered to the Rights Agent, shall be cancelled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Class B Common Stock
and/or other securities or out of its authorized and issued shares held in
its treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Class B Common Stock
<PAGE>
and/or other securities) that, as provided in this Agreement (including Section
11(a)(iii) hereof), will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Class B Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its reasonable
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use all reasonable efforts to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Triggering Event in which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in accordance with
this Agreement, a registration statement under the Act on an appropriate form
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 Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities or (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may, acting by resolution of the Board
(which resolution shall be effective only with the concurrence of a majority of
the Continuing Directors), temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. In the event of
any such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration statement is
required in other circumstances following the Distribution Date, the Company may
similarly temporarily suspend the exercisability of the Rights until such time
as a registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not otherwise be permitted
under applicable law or a registration statement shall not have been declared
effective.
<PAGE>
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-hundredths of a share
of Preferred Stock (and, following the occurrence of a Triggering Event, Class
B Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued, fully paid
and nonassessable.
(e) The Company further covenants and agrees that, except as
set forth in this paragraph (e) and in Section 6(a) hereof, it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates and
of any certificates for a number of one one-hundredths of a share of Preferred
Stock (or Class B Common Stock and/or other securities, as the case may be) upon
the exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-hundredths of a share of Preferred Stock (or Class B Common
Stock and/or other securities, as the case may be) in respect of a name other
than that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise, nor shall the Company be required to issue or deliver
any certificates for a number of one one-hundredths of a share of Preferred
Stock (or Class B Common Stock and/or other securities, as the case may be) in a
name other than that of the registered holder upon the exercise of any Rights
until such tax shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths of a share of
Preferred Stock (or Class B Common Stock and/or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of such fractional shares of Preferred Stock
(or Class B 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 all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
transfer books for the Preferred Stock (or Class B Common Stock and/or other
securities, as the case may be) are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books for the Preferred Stock (or Class B Common Stock and/or other
securities, as the case may be) are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not
<PAGE>
be entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including without limitation the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares,
or fractions thereof, purchasable upon the exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide or split the outstanding Preferred
Stock, (C) combine or consolidate the outstanding Preferred Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision, split,
combination, consolidation or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the transfer
books for the Preferred Stock (or other capital stock, as the case may be) were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, split, combination, consolidation or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that:
<PAGE>
(A) any Person (other than an Exempt Person)
alone or together with its Affiliates and Associates (other
than an Exempt Person) shall, at any time after the Rights
Dividend Declaration Date, become an Acquiring Person, unless
the event causing such Person to become an Acquiring Person is
(1) a Section 13 Event or (2) an acquisition of shares of
Common Stock of the Company pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock of
the Company at a price and on terms determined by at least a
majority of the Outside Directors, after receiving advice from
one or more investment banking firms, to be (a) at a price
which is fair to stockholders (taking into account all factors
which such Outside Directors deem relevant including, without
limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best
interests of the Company and its stockholders (the exception
provided for in this Section 11(a)(ii)(A)(2) being referred to
herein as the "Fair Offer Exception"); or
(B) all of the following shall have
occurred: (1) the Board shall designate a specific limitation
on the amount of Common Stock of the Company which a specified
Person may beneficially own, which amount (the "Ownership
Limitation") may be less than, equal to, or more than the
amount of shares of Common Stock of the Company then owned by
such Person but shall in no event be less than the number of
shares entitling holders to cast 15% of the aggregate number
of votes entitled to be cast by holders of all shares of
Common Stock of the Company; (2) a majority of the Company's
Outside Directors, after reasonable inquiry and investigation
(which may include a review of the public record regarding
such Person and any information that such Outside Directors
may request from such Person) and consultation with any
persons such Outside Directors deem appropriate, determines
that (x) beneficial ownership by such Person of an amount of
Common Stock of the Company exceeding the Ownership Limitation
is, or would likely be, intended to cause the Company to
repurchase the Common Stock of the Company beneficially owned
by such Person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions
intended to provide such
<PAGE>
Person with short-term financial gain under circumstances
where the majority of Outside Directors determines that the
best long-term interests of the Company and its stockholders
would not be served by taking such action or entering into
such transaction or series of transactions at that time or (y)
beneficial ownership by such Person of an amount of Common
Stock of the Company exceeding the Ownership Limitation is
causing or reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of the
Company's ability to maintain its competitive position) on the
business or prospects of the Company; and (3) the beneficial
ownership of shares of such Person shall (before or after (1)
or (2) above) exceed the Ownership Limitation;
then, promptly after the occurrence of a Section 11(a)(ii) Event,
proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a share of
Preferred Stock, such number of shares of Class B Common Stock as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths of a share
of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, whether
or not such Right was then exercisable, and (y) dividing that
product (which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price per
share of Class B Common Stock on the date of such first occurrence
(such number of shares being referred to as the "Adjustment
Shares").
(iii) In lieu of issuing shares of Class B Common Stock
in accordance with Section 11(a)(ii) hereof, the Company, acting by
resolution of the Board (which resolution shall be effective only
with the concurrence of a majority of the Continuing Directors),
may, and in the event that the number of shares of Class B Common
Stock which are authorized by the Company's Certificate of
Incorporation (as the same may be amended and restated from time to
time) but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, acting by
<PAGE>
resolution of the Board (which resolution shall be effective only
with the concurrence of a majority of the Continuing Directors),
shall (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value")
over (2) the Purchase Price attributable to each Right (such excess
being referred to as the "Spread"), and (B) with respect to each
Right (subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
equity securities of the Company other than Class B Common Stock
(including, without limitation, shares, or units of shares, of Class
A Common Stock or preferred stock which the Board has deemed to have
the same value as shares of Class B Common Stock (such shares of
Class A Common Stock or preferred stock being referred to as "Class
B Common Stock Equivalents")), (4) debt securities of the Company,
(5) other assets or (6) any combination of the foregoing which, when
added to any shares of Class B Common Stock issued upon such
exercise, have an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board (with the
concurrence of a majority of the Continuing Directors) based upon
the advice of a nationally recognized investment banking firm
selected by the Board; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B)
above within 30 days following the later of (x) the first occurrence
of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) hereof (as such date
may be amended pursuant to Section 26 or Section 31 hereof,
respectively) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of
Class B Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board (with the concurrence of a
majority of the Continuing Directors) shall determine in good faith
that it is likely that sufficient additional shares of Class B
Common Stock could be authorized for issuance upon exercise in full
of the Rights, the 30-day period set forth above may be extended to
the extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares
(such period, as it may be extended being referred to herein as the
"Substitution Period"). To the extent that the Company determines
that some action
<PAGE>
need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Class B Common Stock shall be the
Current Market Price per share of the Class B Common Stock on the
Section 11(a)(ii) Trigger Date and the value of any Class B Common
Stock Equivalents shall be deemed to have the same value as the
Class B Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock (or shares having the same
rights, privileges and preferences as the shares of Preferred Stock ("Equivalent
Preferred Stock")) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred Stock) less
than the Current Market Price per share of Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock and/or Equivalent Preferred Stock which the aggregate subscription or
purchase price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board (with the concurrence of a majority of the Continuing Directors),
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. Shares of Preferred
<PAGE>
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, less the fair market value (as determined in good
faith by the Board (with the concurrence of a majority of the Continuing
Directors), whose determination shall be described in a statement filed with the
Rights Agent and shall be binding upon the Rights Agent and the holders of the
Rights) of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such Current Market Price
per share of Preferred Stock (as determined pursuant to Section 11(d) hereof).
Such adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of Class B Common Stock on any
date shall be deemed to be the average of the daily closing prices
per share of such Class B Common Stock for the 30 consecutive
Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share of Class B Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of
such Class B Common Stock for the 10 consecutive Trading Days
immediately following such date; provided, however, that in the
event that the Current Market Price per share of the Class B Common
Stock is determined during a period following the announcement by
the
<PAGE>
Company of (A) a dividend or distribution on such Class B Common
Stock payable in shares of such Class B Common Stock or securities
convertible into shares of such Class B Common Stock (other than the
Rights) or (B) any subdivision, combination, consolidation, reverse
stock split or reclassification of such Class B Common Stock, and
prior to the expiration of the requisite 30-Trading Day or
10-Trading Day period, as set forth above, after the ex-dividend
date for such dividend or distribution, or the record date for such
subdivision, combination, consolidation, reverse stock split or
reclassification, then, in each such case, the Current Market Price
shall be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular
way, or in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange, or if the shares of Class B Common Stock are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national
securities exchange on which the shares of Class B Common Stock are
listed or admitted to trading, or if the shares of Class B Common
Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the Nasdaq National Market or the Nasdaq
Stock Market or such other quotation system then in use, or if on
any such date the shares of Class B Common Stock are not quoted by
any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market
in the Class B Common Stock selected by the Board (with the
concurrence of a majority of the Continuing Directors). If the Class
B Common Stock is not publicly held or not so listed, traded or
quoted, and a market maker is not making a market, Current Market
Price per share of Class B Common Stock shall mean the fair value
per share as determined in good faith by the Board (with the
concurrence of a majority of the Continuing Directors), whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the Class B
Common Stock in clause (i) of this Section 11(d) (other than the
last sentence
<PAGE>
thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the Current Market
Price per share of Preferred Stock shall be conclusively deemed to
be an amount equal to 100 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Class B Common Stock occurring
after the date of this Agreement) multiplied by the Current Market
Price per share of the Class B Common Stock. If neither the Class B
Common Stock nor the Preferred Stock is publicly held or so listed
or traded, Current Market Price per share of the Preferred Stock
shall mean the fair value per share as determined in good faith by
the Board (with the concurrence of a majority of the Continuing
Directors), whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the Current Market
Price of one one-hundredth of a share of Preferred Stock shall be
equal to the Current Market Price of one share of Preferred Stock
divided by 100. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Class
B Common Stock are listed or admitted to trading is open for the
transaction of business, or if the shares of Class B Common Stock
are not listed or admitted to trading on any national securities
exchange, a Business Day.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof (or the number of
rights) shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as
<PAGE>
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares; provided, however,
that the Company shall not be liable for its inability to reserve and keep
available for issuance upon exercise of the Rights pursuant to Section
11(a)(ii) a number of shares of Class B Common Stock greater than the number
then authorized by the Company's Certificate of Incorporation (as the same may
be amended and restated from time to time) but not outstanding or reserved for
any other purpose.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to the nearest one
one-millionth of a share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-ten thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been
<PAGE>
issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a share which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall use its best efforts to 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 such number of one
one-hundredths of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
<PAGE>
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger, sale or transfer there
are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger, sale or
transfer, the stockholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section 26,
Section 29 or Section 31 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock of the Company payable in
shares of
<PAGE>
Common Stock of the Company, (ii) subdivide the outstanding shares of Common
Stock of the Company in a manner not covered in (i) above or (iii) combine the
outstanding shares of Common Stock of the Company into a smaller number of
shares, (x) the number of one one-hundredths of a share of Preferred Stock then
purchasable upon exercise of a Right shall be proportionately adjusted so that
the number of one one-hundredths of a share of Preferred Stock purchasable
thereafter upon proper exercise of each Right shall equal the result obtained by
multiplying the number of one one-hundredths of a share of Preferred Stock so
purchasable immediately prior to such event by a fraction the numerator of which
shall be the total number of shares of Common Stock of the Company outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock of the Company outstanding
immediately following the occurrence of such event and (y) action shall be taken
such that each share of Common Stock of the Company outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each share of Common Stock of the Company outstanding immediately prior to
such event had issued with respect to it. The adjustments provided for in this
Section 11(p) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected. If an
event occurs which would require an adjustment under Section 11(a)(ii) and this
Section 11(p), the adjustments provided for in this Section 11(p) shall be in
addition and prior to any adjustment required pursuant to Section 11(a)(ii).
(q) A failure by the Board to designate the Ownership
Limitation described in Section 11(a)(ii)(B)(1) hereof or a failure by a
majority of the Company's Outside Directors to make any determination described
in Section 11(a)(ii)(B)(2) hereof shall not imply that any Person is not an
Adverse Person, nor limit their respective rights at any time in the future to
make such designation and determination and cause any Person to become an
Adverse Person.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock of the Company, a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock of the Company) in accordance
with Section 25 hereof. Notwithstanding the foregoing sentence, the failure of
the Company to prepare such certificate or statement or make such filings or
mailings shall not affect the validity of, or the force or effect of, the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.
<PAGE>
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
(a) In the event (a "Section 13 Event") that, on or after
the Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate or otherwise combine with, or merge with or into, any other Person
or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation, combination or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate or combine with, or merge
with or into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation, combination or merger, and in connection with
such consolidation, combination or merger, all or part of the outstanding shares
of Common Stock of the Company shall be changed into or exchanged for stock or
other securities of any other Person or Persons or cash or any other property or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole and calculated on the basis of the Company's most recent regularly
prepared financial statements) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof); provided, however, that this clause (z) of
Section 13(a) shall not apply to the pro rata distribution by the Company of
assets (including securities) of the Company or any of its Subsidiaries to all
holders of the Company's Common Stock; then, and in each such case (except as
may be contemplated by Section 13(d) hereof), proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall, on or after the later of (A) the date of the first occurrence of any such
Section 13 Event or (B) the date of the expiration of the period within which
the Rights may be redeemed pursuant to Section 23 hereof (as the same may be
amended or reinstated as provided in Section 26 or Section 31 hereof,
respectively), have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, nonassessable and freely
tradeable shares of Common Stock of the Principal Party, not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-hundredths of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of such one
one-hundredths of a share for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii)
<PAGE>
Event by the Purchase Price in effect immediately prior to such first
occurrence) and (2) dividing that product (which, following the first occurrence
of a Section 13 Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the Current Market Price
per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a) hereof, (A) the
Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted, changed or exchanged in
such merger, consolidation or combination, or if there is more than
one such issuer, the issuer the Common Stock of which has the
greatest market value or (B) if no securities are so issued, the
Person that is the other party to such merger (and survives the
merger), consolidation or combination (or if there is more than one
such Person, the Person the Common Stock of which has the greatest
value), or if the other party to the merger does not survive the
merger, the Person that does survive the merger (including the
Company if it survives); and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or earning
power cannot be determined, whichever of such Persons as is the
issuer of the Common Stock having the greatest aggregate market
value;
<PAGE>
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; (2)
if the Common Stock of such Person is not and has not been so registered and
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value; and (3) if the Common
Stock of such Person is not and has not been so registered and such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party 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 this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any Section 13
Event unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement confirming
that the requirements of Sections 13(a) and (b) hereof shall promptly be
performed in accordance with their terms and that such Section 13 Event shall
not result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Sections 13(a) and
(b) hereof and further providing that, as soon as practicable after the date of
such Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form and will use its best
efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements
of the Act) until the Expiration Date and to similarly comply with
applicable state securities laws;
(ii) use its best efforts to list or obtain quotation
of (or continue the listing or quotation of) the Rights and the
securities
<PAGE>
purchasable upon exercise of the Rights on a national securities
exchange or automated quotation service;
(iii) 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; and
(iv) use its best efforts to obtain waivers of any
rights of first refusal or preemptive rights in respect of the
shares of Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraph (x) or (y) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons (or a wholly owned subsidiary of any such Person or
Persons) who acquired shares of Common Stock of the Company pursuant to a tender
offer or exchange offer for all outstanding shares of Common Stock of the
Company which complies with the provisions of the Fair Offer Exception provided
for in Section 11(a)(ii)(A)(2) hereof, (ii) the price per share of Common Stock
of the Company offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common Stock of the Company
whose shares were purchased pursuant to such tender offer or exchange offer and
(iii) the form of consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(i) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole
<PAGE>
Right. For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the Nasdaq National Market
or the Nasdaq Stock Market or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by the Board (with the concurrence of a majority
of the Continuing Directors). If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board (with the concurrence of a majority of the Continuing
Directors) shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock) upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a share
of Preferred Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-hundredth of a share of Preferred Stock. For purposes of this Section 14(b),
the current market value of one one-hundredth of a share of Preferred Stock
shall be one one-hundredth of the closing price of a share of Preferred Stock
or, if unavailable, the appropriate alternative price (in each case as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Class B Common
Stock upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Class B Common Stock. In lieu of fractional shares of Class
B Common Stock, the Company may pay to the registered holders of Rights
Certificates at the
<PAGE>
time such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one share of Class B Common Stock.
For purposes of this Section 14(c), the current market value of one share of
Class B Common Stock shall be the closing price of one share of Class B Common
Stock or, if unavailable, the appropriate alternative price (in each case as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, except the rights of action vested in the Rights
Agent pursuant to Section 18 hereof, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock of the Company); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock of the Company), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution Date, of
the Common Stock of the Company), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. 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 of the
Company;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent designated
for such purposes, duly
<PAGE>
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
one one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 24 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and
<PAGE>
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document reasonably believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. If at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and if at that time any of
the Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases,
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) If 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
<PAGE>
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 Adverse Person and the determination of the Current Market Price) be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President,
any Vice President, the Treasurer or any Assistant Treasurer of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates, nor shall it be required to verify the same
(except as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereon); nor shall it be responsible for any breach by the
Company of any covenant or condition
<PAGE>
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Class B Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Class B Common Stock or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President, any Vice President, the Treasurer
or any Assistant Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
<PAGE>
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any 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 30 days' notice in writing mailed to the Company, and to
each transfer agent for the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent for the Common Stock and
Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
If no successor Rights Agent shall have been appointed within 30 days from
effectiveness of such removal or resignation, and no registered holder of any
Rights Certificates shall have applied pursuant to this Agreement for the
appointment of a new Rights Agent, the Company shall be automatically designated
as successor Rights Agent. Any successor Rights Agent (other than the Company,
as designated in the preceding sentence), whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing business under the
laws of the United States or of any state of the United States so long as such
corporation is authorized to do business as a banking institution in such state,
is in good standing, is authorized under such laws to exercise corporate trust
powers, is subject to supervision or examination by federal or state authority
and has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (b) an Affiliate of a corporation described
in clause (a) of this sentence. After appointment, the
<PAGE>
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
shall execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent for the Common Stock and the
Preferred Stock and shall mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock of the Company
following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock of the
Company so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board may (following the Stock Acquisition
Date, only with the concurrence of a majority of the Continuing Directors), at
its option, at any time prior to the earlier of (i) the Close of Business on the
tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the Close of
Business on the tenth Business Day following the Record Date) or (ii) the Final
Expiration Date, direct the Company to, and if so directed, the Company shall,
redeem all but not less than all of the then
<PAGE>
outstanding Rights at a redemption price of $.01 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, that the
Rights may not be redeemed following an Adverse Person Event. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of Class B Common
Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof,
of the Class B Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board (with, if
required, the concurrence of a majority of the Continuing Directors) ordering
the redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board ordering the redemption of the Rights,
the Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent(s) for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or a series of related
transactions, of more
<PAGE>
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall as
soon as practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in Section 24(a) hereof to Preferred Stock shall be deemed thereafter
to refer to Common Stock of the Company and/or, if appropriate, other
securities.
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:
The Associated Group, Inc.
200 Gateway Towers
Pittsburgh, Pennsylvania 15222
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
<PAGE>
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Attention: Corporate Trust Group
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock of the Company) shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
earlier of the Distribution Date or the occurrence of an Adverse Person Event
(the "Final Amendment Date") and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the Board so directs,
supplement or amend any provision of this Agreement (including without
limitation to extend the period in which the Rights may be redeemed) without the
approval of any holders of certificates representing shares of Common Stock of
the Company. From and after the Final Amendment Date and subject to the
penultimate sentence of this Section 26, the Company and the Rights Agent shall,
if the Board so directs, supplement or amend this Agreement without the approval
of any holders of certificates representing shares of Common Stock of the
Company or of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder (which shortening or lengthening, after the Stock
Acquisition Date, shall require the concurrence of a majority of such Continuing
Directors) or (iv) to change or supplement or make any other provisions in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other than
an Acquiring Person, an Adverse Person or an Affiliate or Associate of any such
Person); provided, however, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) whether
before or after the Final Amendment Date, a time period relating to when the
Rights may be redeemed or to modify the ability, or inability, of the Board
(with, where required, the concurrence of a majority of the Continuing
Directors) to redeem the Rights, in either case at such time as the Rights are
not then redeemable or (B) after the Final Amendment Date, any other time
periods unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights (other
than an Acquiring Person, an Adverse Person or an Affiliate or Associate of any
such Person). Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall
<PAGE>
execute such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock for which a Right
is exercisable. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock of the Company.
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. Determinations and Actions by the Board,
etc. For all purposes of this Agreement, any calculation of the number of shares
of Common Stock of the Company outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of the Company of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board (with, where
specifically provided for herein, the concurrence of Continuing Directors) or,
where applicable, the Continuing Directors or Outside Directors shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to each of them or, in the case of the
Board, to the Company. The Board also shall have the exclusive power and
authority to exercise such other rights and powers as may be necessary or
advisable in the administration of this Agreement including, without limitation,
the right and power to (a) interpret the provisions of this Agreement and (b)
make all determinations deemed necessary or advisable for the administration of
this Agreement (including, with, where applicable, the concurrence of Continuing
Directors, a determination to redeem or not to redeem the Rights, to approve any
agreement described in Section 1(x) hereof, to designate the Ownership
Limitation or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
(with, where specifically provided for herein, the concurrence of Continuing
Directors), the Continuing Directors, the Outside Directors or the Company in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board, the Continuing Directors or the Outside Directors to any
liability to the holders of the Rights and Rights Certificates.
Section 29. Exchange.
<PAGE>
(a) The Board (with the concurrence of the Continuing
Directors) may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for shares of Class B Common Stock at an exchange ratio
of one share of Class B Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board shall not be
empowered to effect such exchange at any time after (i) any Person (other than
an Exempt Person) becomes the Beneficial Owner of 50% or more of the shares of
Common Stock of the Company then outstanding or (ii) the occurrence of an
Adverse Person Event.
(b) Immediately upon the action of the Board ordering
the exchange of any Rights pursuant to paragraph (a) of this Section 29 and
without any further action and without notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Class B Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent(s) for the Common Stock of the Company.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Class B Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be affected pro rata
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.
(c) In any exchange pursuant to this Section 29, the
Company, at its option, may substitute Preferred Stock (or Equivalent Preferred
Stock, as such term is defined in Section 11(b) hereof) for shares of Class B
Common Stock exchangeable for Rights, at the initial rate of one one-hundredth
of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of
Class B Common Stock, as appropriately adjusted to reflect adjustment in the
voting rights of the Preferred Stock pursuant to Exhibit A hereto, so that the
fraction of a share of Preferred Stock delivered in lieu of each share of Class
B Common Stock shall have the same voting rights as one share of Class B Common
Stock.
<PAGE>
(d) In the event that there shall not be sufficient
shares of Class B Common Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 29, the Company shall take all such action as may be necessary to
authorize additional shares of Class B Common Stock for issuance upon exchange
of the Rights.
(e) The Company shall not be required to issue
fractions of shares of Class B Common Stock or to distribute certificates which
evidence fractional shares of Class B Common Stock. In lieu of such fractional
shares of Class B Common Stock, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional shares of Class B
Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole share of Class B Common Stock.
For the purposes of this paragraph (e), the current market value of a whole
share of Class B Common Stock shall be the closing price of a share of Class B
Common Stock or, if unavailable, the appropriate alternative price (in each case
as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date on which the Board takes action ordering an
exchange pursuant to this Section 29.
Section 30. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the Common Stock of the
Company) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock of the
Company).
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction
is held by such court or authority to be invalid, void or unenforceable and the
Board (with the concurrence of a majority of the Continuing Directors)
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth Business Day following
the date of such determination by the Board. Without limiting the foregoing, if
any provision of this Agreement requiring that a determination be made by the
Board with the concurrence of a majority of the Continuing Directors or by the
Continuing
<PAGE>
Directors or the Outside Directors is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, such determination
shall then be made by the Board in accordance with applicable law and the
Company's Certificate of Incorporation (as the same may be amended and restated
from time to time) and By-Laws.
Section 32. Governing Law. This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and shall for all purposes be
governed by and construed in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are
<PAGE>
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed under seal as of the day and year first above
written.
Attest: THE ASSOCIATED GROUP, INC.
By By
------------------------ ------------------------
Name: Name:
Title: Title:
Attest: MELLON BANK, N.A.,
as Rights Agent
By By
------------------------ ------------------------
Name: Name:
Title: Title:
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
THE ASSOCIATED GROUP, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We,_____________ , ______________ of The Associated Group,
Inc., a corporation organized and existing under the General Corporation Law
of the State of Delaware (the "Corporation"), in accordance with the
provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board
of Directors by the Certificate of Incorporation of the said Corporation, the
said Board of Directors on December __, 1994 adopted the following resolution
creating a series of 250,000 shares of Preferred Stock designated as Series A
Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating Preferred Stock"
and the number of shares constituting such series shall be 250,000.
<PAGE>
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Class A Common Stock, par value $.10 per share, or Class
B Common Stock, par value $.10 per share, of the Corporation (such Class A
Common Stock and Class B Common Stock referred to together herein as "Common
Stock") or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series A Junior Participating Preferred Stock. In
the event the Corporation shall at any time after December __, 1994 (the
"Rights Dividend Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A
Junior Participating Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock as provided in
Paragraph (A) above immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Series A
<PAGE>
Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events, such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Series A Junior Participating Preferred Stock shall have the following voting
rights:
(A) Subject to the provisions hereinafter set forth,
the shares of Series A Junior Participating Preferred Stock shall not entitle
the holders thereof to vote on matters submitted to a vote of the stockholders
of the Corporation.
(B) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal
to six (6) quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (a "default
period") which shall extend until such time when all accrued and
unpaid dividends for all previous quarterly dividend periods and for
the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to
elect two (2) Directors.
<PAGE>
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(B) or at an annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders
of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised
unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy.
The absence of a quorum of the holders of Common Stock shall not
affect the exer
<PAGE>
cise by the holders of Preferred Stock of such voting right. At any
meeting at which the holders of Preferred Stock shall exercise such
voting right initially during an existing default period, they shall
have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to
two (2) Directors or, if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the right to
make such increase in the number of Directors as shall be necessary
to permit the election by them of the required number. After the
holders of the Preferred Stock shall have exercised their right to
elect Directors in any default period and during the continuance of
such default period, the number of Directors shall not be increased
or decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities
ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.
<PAGE>
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of a
special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice-President or the
Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled to
vote pursuant to this Paragraph (B)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice
to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier
than ten (10) days and not later than sixty (60) days after such
order or request. If such meeting is not called within sixty (60)
days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the
provisions of this Paragraph (B)(iii), no such special meeting shall
be called during the period within sixty (60) days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two (2) Directors voting as a class, after the exercise of
which right (x) the Directors so elected by the holders of Preferred
Stock shall continue in office until their successors shall have
been elected by such holders or until the expiration of the default
period and (y) any vacancy in the Board of Directors may (except as
provided in Paragraph (B)(ii) of this Section 3) be filled by vote
of a majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. References in this Paragraph (B) to
Directors elected by the holders of a particular class of stock
shall include Directors elected by such Directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to
<PAGE>
elect Directors shall cease, (y) the term of any Directors elected
by the holders of Preferred Stock as a class shall terminate and (z)
the number of Directors shall be such number as may be provided for
in the Certificate of Incorporation or By-Laws of the Corporation
irrespective of any increase made pursuant to the provisions of
Paragraph (B)(ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in
the Certificate of Incorporation or By-Laws of the Corporation). Any
vacancies in the Board of Directors effected by the provisions of
clauses (y) and (z) in the preceding sentence may be filled by a
majority of the remaining Directors.
(C) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special voting rights and
their consent shall not be required for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred Stock, except dividends
paid ratably on the Series A Junior Participating Preferred Stock
and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
<PAGE>
shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A)
Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock)
<PAGE>
(such number in clause (ii), the "Adjustment Number"). Following the payment of
the full amount of the Series A Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity with the Series A Junior
Participating Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common Adjustment after
payment in full of the Series A Liquidation Preference and the liquidation
preference of all other series of Preferred Stock, if any, which rank on a
parity with the Series A Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time
after the Rights Dividend Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately prior
to such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case the shares of Series A Junior Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged. In the event the Corporation shall at any time after
the Rights Dividend Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock
or (iii) combine the outstanding Common Stock into a
<PAGE>
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Junior Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation
of the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior Participating
Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true under the penalties of
perjury this ____ day of December, 1994.
_____________________________________
Title:
<PAGE>
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER DECEMBER [], 2004 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.Ol PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ADVERSE
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
AN [ACQUIRING/ADVERSE] PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
[ACQUIRING/ADVERSE] PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.](1)
Rights Certificate
THE ASSOCIATED GROUP, INC.
This certifies that __________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of December [ ], 1994 (the "Rights Agreement"),
between The Associated Group, Inc., a Delaware corporation (the "Company"), and
Mellon Bank, N.A., a federally chartered banking entity (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 p.m. (New York City time),
on December [], 2004 at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one one-hundredth of a fully
paid, non-assessable share of Series A Junior Participating Preferred Stock of
the Company (the "Preferred Stock") at a purchase price of $[] per one
one-hundredth of a share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price per share set forth above, are the number and
Purchase Price as of December [], 1994, based on the Preferred Stock as
constituted at such date.
<PAGE>
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person, an Adverse Person
or an Affiliate or Associate of any such Acquiring Person or Adverse Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person, Adverse Person or Affiliate or Associate or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person or Adverse Person or
an Affiliate or Associate of an Acquiring Person or Adverse Person, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company, and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may (unless there shall be an Adverse Person) be
redeemed by the Company at its option at a redemption price of $.Ol per Right at
any time prior to the earlier of the close of business on (i) the tenth business
day following the Stock Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement), (ii) the date the Rights expire pursuant to
Section 13(d) of the Rights Agreement and (iii) the Final Expiration Date.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (unless the Company determines,
in its discretion, to issue fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock,
<PAGE>
which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any securities of the Company which may at any be issuable on the
exercise hereof nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholders of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _________________________ 19__
ATTEST: THE ASSOCIATED GROUP, INC.
__________________________ By___________________________
[Name] [Name]
[Title] [Title]
Countersigned:
[Rights Agent]
By_____________________________
Authorized Signature
<PAGE>
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FORVALUE RECEIVED_____________________________________________________
hereby sells, assigns and transfers unto______________________________
- --------------------------------------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________________________
--------------------------------------
Signature
Signature Guaranteed:
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [] is [] is not being sold, assigned and
transferred by or an behalf of a Person who is or was an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [] did [] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Person.
Dated:_______________________________________
-------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise
Rights represented by the Rights Certificate.
To: [ ]
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Rights Certificate to purchase the shares
of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered
to:
Please insert social security
or other identifying number _____________________
- ----------------------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number _____________________
- ----------------------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------------------
Dated: ______________________________________
----------------------------------
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [] are [] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person,
an Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [] did [] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person, an Adverse Person or
an Affiliate or Associate of any such Person.
Dated:_________________________________
----------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
This AMENDMENT NO. 1 TO RIGHTS AGREEMENT (this "Amendment")
dated as of March 17, 1999 between the Associated Group, Inc., a
Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., successor to Mellon Bank, N.A., a federally chartered
banking entity (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Company and the Rights Agent entered into a
Rights Agreement dated as of December 14, 1994 (the "Original
Agreement"); and
WHEREAS, the Company and the Rights Agent now desire to amend
the Original Agreement in the manner set forth herein effective as of
the date of this Amendment; and
WHEREAS, Section 26 of the Original Agreement provides that
the Company and the Rights Agent shall, if the Board so directs, amend
any provision of the Original Agreement without the approval of the
Company's stockholders;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties hereby agree as
follows:
1. Section 1 of the Original Agreement is amended (a) to
delete both paragraph "(q)" thereof and all references to paragraph "(q)" in the
text thereof in their respective entireties and (b) to reletter the succeeding
paragraphs "(r)" through "(xx)" thereof so that they are paragraphs "(q)"
through "(ww)" of Section 1, as so amended. All references in the text of the
Original Agreement to these paragraphs "(r)" through "(xx)" of Section 1 shall
correspondingly be amended to reference the paragraphs as relettered hereby.
<PAGE>
2. Section 2 of the Original Agreement is amended by deleting
from the first sentence the following clause: "and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock)".
3. Section 11(a)(iii) of the Original Agreement is amended (a)
to delete the words "(which resolution shall be effective only with the
concurrence of a majority of the Continuing Directors)" in each of the two
places they appear therein and (b) to delete the words "(with the concurrence of
a majority of the Continuing Directors)" in each of the two places they appear
therein.
4. Section 11(b) of the Original Agreement is amended to
delete the words "(with the concurrence of a majority of the Continuing
Directors)" appearing therein.
5. Section 11(c) of the Original Agreement is amended to
delete the words "(with the concurrence of a majority of the Continuing
Directors)" appearing therein.
6. Section 11(d)(i) of the Original Agreement is amended to
delete the words "(with the concurrence of a majority of the Continuing
Directors)" in each of the two places they appear therein.
7. Section 11(d)(ii) of the Original Agreement is amended to
delete the words "(with the concurrence of a majority of the Continuing
Directors)" appearing therein.
8. Section 14(a) of the Original Agreement is amended to
delete the words "(with the concurrence of a majority of the Continuing
Directors)" in each of the two places they appear therein.
<PAGE>
9. The first paragraph of Section 18 of the Original Agreement
is hereby amended by inserting the following sentence at the end of the
paragraph: "Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, indirect, punitive, consequential or
incidental loss or damage of any kind whatsoever (including, but not limited to,
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage.
10. Section 23(a) of the Original Agreement is amended to
delete the words "(following the Stock Acquisition Date, only with the
concurrence of a majority of the Continuing Directors)" appearing therein.
11. Section 23(b) of the Original Agreement is amended to
delete the words "(with, if required, the concurrence of a majority of the
Continuing Directors)" appearing therein.
12. Section 26 of the Original Agreement is amended to delete
the words "(with, where required, the concurrence of a majority of the
Continuing Directors)" appearing therein.
13. Section 28 of the Original Agreement is amended to delete
the second, third and fourth sentences thereof in their entireties and to insert
in lieu thereof the following three sentences:
The Board or, as provided for in Section 11(a)(ii)(A)(2) hereof, the
Outside Directors shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to each of them or, in the case of the Board, to
the Company. The Board also shall have the exclusive power and
authority to exercise such other rights and powers as may be necessary
or advisable in the administration of this Agreement including, without
limitation, the right and power to (a) interpret the provisions of this
Agreement and (b) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to
redeem or not to redeem the Rights, to approve any
<PAGE>
agreement described in Section 1(w) hereof, to designate the Ownership
Limitation or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause
(y) below, all omissions with respect to the foregoing) which are done
or made by the Board, the Outside Directors or the Company in good
faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y)
not subject the Board or the Outside Directors to any liability to the
holders of the Rights and Rights Certificates. The Rights Agent shall
always be entitled to assume that the Board, the Outside Directors and
the Company acted in good faith and shall be fully protected and incur
no liability in reliance thereon.
14. Section 29(a) of the Original Agreement is amended to
delete the words "(with the concurrence of the Continuing Directors)" appearing
therein.
15. Section 31 of the Original Agreement is amended (a) to
delete the words "(with the concurrence of a majority of the Continuing
Directors)" and (b) to delete the words "the Board with the concurrence of a
majority of the Continuing Directors or by the Continuing Directors or by"
appearing therein.
16. The parties hereto acknowledge that the purpose and intent
of this Amendment is to remove from the Original Agreement the defined term
"Continuing Directors" and all references to "Continuing Directors" therein. If
this Amendment fails to fully achieve that purpose or effectuate that intent,
the parties agree to use all reasonable efforts to fully achieve that purpose
and effectuate that intent.
17. This Amendment is effective as of the date hereof, and
except as amended hereby, the terms and provisions of the Original Agreement
remain in full force and effect and are unaffected hereby.
18. This Amendment may be executed in counterparts, each of
which shall be deemed an original, and which together shall constitute one and
the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed under seal as of the day and year first
above written.
Attest: THE ASSOCIATED GROUP, INC.
By _______________________ By __________________________
Name: Name:
Title: Title:
Attest: CHASEMELLON SHAREHOLDER SERVICES,
L.L.C., as Rights Agent
By _______________________ By __________________________
Name: Name:
Title: Title:
