AMENDED AND RESTATED
RIGHTS AGREEMENT
dated as of ________, 1995
by and between
U S WEST, Inc.
and
STATE STREET BANK AND TRUST COMPANY
as Rights Agent
TABLE OF CONTENTS
-----------------
Section Page
------- ----
1. Certain Definitions. . . . . . . . . . . . . . . . . 2
2. Appointment of Rights Agent. . . . . . . . . . . . . 10
3. Issuance of Right Certificates . . . . . . . . . . . 10
4. Form of Right Certificates . . . . . . . . . . . . . 13
5. Countersignature and Registration. . . . . . . . . . 13
6. Transfer Split Up Combination and Exchange of
Right Certificates; Mutilated Destroyed, Lost or
Stolen Right Certificates. . . . . . . . . . . . . . 14
7. Exercise of Rights . . . . . . . . . . . . . . . . . 15
8. Cancellation and Destruction of Right
Certificates . . . . . . . . . . . . . . . . . . . . 17
9. Reservation and Availability of Capital Stock. . . . 18
10. Securities Record Date . . . . . . . . . . . . . . . 19
11. Adjustment of Exercise Price, Number of Shares
Issuable upon Exercise of Rights or Number of
Rights . . . . . . . . . . . . . . . . . . . . . . . 19
12. Certificate of Adjusted Exercise Price or Number
of Shares Issuable upon Exercise of Rights . . . . . 27
13. Consolidation, Merger, or Sale or Transfer of
Assets or Earning Power. . . . . . . . . . . . . . . 27
14. Fractional Rights and Fractional Shares. . . . . . . 31
15. Rights of Action . . . . . . . . . . . . . . . . . . 32
16. Agreement of Right Holders . . . . . . . . . . . . . 33
17. Right Holder and Right Certificate Holder Not
Deemed a Stockholder . . . . . . . . . . . . . . . . 33
18. Concerning the Rights Agent. . . . . . . . . . . . . 34
(i)
TABLE OF CONTENTS
-----------------
(continued)
Section Page
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19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . 34
20. Duties of Rights Agent . . . . . . . . . . . . . . . 35
21. Change of Rights Agent . . . . . . . . . . . . . . . 37
22. Issuance of New Right Certificates . . . . . . . . . 39
23. Redemption of Rights . . . . . . . . . . . . . . . . 39
24. Certain Cash Tender Offers . . . . . . . . . . . . . 40
25. Notice of Certain Events . . . . . . . . . . . . . . 43
26. Notices. . . . . . . . . . . . . . . . . . . . . . . 44
27. Supplements and Amendments . . . . . . . . . . . . . 44
28. Certain Covenants. . . . . . . . . . . . . . . . . . 45
29. Determinations and Actions by the Board of
Directors, etc.. . . . . . . . . . . . . . . . . . . 46
30. Successors . . . . . . . . . . . . . . . . . . . . . 46
31. Benefits of This Agreement . . . . . . . . . . . . . 46
32. Severability . . . . . . . . . . . . . . . . . . . . 47
33. Governing Law. . . . . . . . . . . . . . . . . . . . 47
34. Counterparts . . . . . . . . . . . . . . . . . . . . 47
35. Descriptive Headings . . . . . . . . . . . . . . . . 47
36. Effectiveness. . . . . . . . . . . . . . . . . . . . 47
(ii)
TABLE OF EXHIBITS
-----------------
Exhibit A-1 -- Terms of Series A Preferred Shares
Exhibit A-2 -- Terms of Series B Preferred Shares
Exhibit B-1 -- Form of Communications Right Certificate
Exhibit B-2 -- Form of Media Right Certificate
(iii)
TABLE OF DEFINED TERMS
----------------------
Term Defined Page Section
------------ ---- -------
20% Ownership Date 8 1.(al)
20% Stockholder 9 1.(am)
30% Stockholder 9 1.(an)
Affiliate 2 1.(a)
Agreement 1 Introduction
Associate 2 1.(a)
Beneficial Owner 2 1.(b)
Beneficially Own 2 1.(b)
Business Day 3 1.(c)
Cash Tender Offer Proposal 3 1.(d)
Close of Business 4 1.(e)
Closing Price 4 1.(f)
Common Share 5 1.(g)
Communications Adjustment Shares 20 11.(a)(ii)
Communications Exercise Price 5 1.(h)
Communications Right Certificates 11 3.(c)
Communications Rights 1 Recital
Communications Share 1 Recital
Communications Unavailable
Adjustment Shares 21 11.(a)(iii)
Company 1 Introduction
Current Market Price 5 1.(k)
(iv)
TABLE OF DEFINED TERMS
----------------------
(continued)
Term Defined Page Section
------------ ---- -------
Distribution Date 6 1.(l)
Effective Time 1 Recital
Exchange Act 6 1.(n)
Exercise Price 6 1.(o)
Existing Common Stock 1 Recital
Existing Right 1 Recital
Expiration Date 6 1.(q)
Fair Offer 6 1.(r)
Fairness Opinion 40 24.(a)
Independent Director 6 1.(s)
Media Adjustment Shares 21 11.(a)(ii)
Media Exercise Price 7 1.(t)
Media Right Certificates 11 3.(c)
Media Rights 1 Recital
Media Share 2 Recital
Media Unavailable Adjustment Shares 21 11.(a)(iii)
Merger 1 Recital
Merger Agreement 1 Recital
NASDAQ 4 1.(f)
Original Agreement 1 Recital
Person 7 1.(y)
Preferred Share 7 1.(z)
Preferred Share Equivalents 22 11.(b)
Proposal Date 40 24.(a)
(v)
TABLE OF DEFINED TERMS
----------------------
(continued)
Term Defined Page Section
------------ ---- -------
Prospective Offeror 3 1.(d)
Record Date 1 Recital
Redemption Date 7 1.(aa)
Redemption Price 7 1.(ab)
Resolution 40 24.(a)
Right Certificates 11 3.(c)
Rights 7 1.(ac)
Rights Agent 1 Introduction
Rights Agreement 12 3.(d)
Section 11(a)(ii) Event 7 1.(ad)
Section 13(a) Event 7 1.(ae)
Securities Act 8 1.(af)
Series A Preferred Share 8 1.(ag)
Series B Preferred Share 8 1.(ah)
Special Meeting 40 24.(a)
Subsidiary 8 1.(ai)
Surviving Person 28 13.(a)
Trading Day 8 1.(aj)
U S WEST Colorado 1 Recital
Voting Share 8 1.(ak)
(vi)
AMENDED AND RESTATED
RIGHTS AGREEMENT
This Amended and Restated Rights Agreement ("Agreement") is
made and entered into as of the __ day of _____, 1995 by and between U S
WEST, Inc., a Delaware corporation (the "Company"), and State Street Bank and
Trust Company (the "Rights Agent"), and shall become effective as of the
Effective Time (as defined herein).
WHEREAS, on April 7, 1989, the Board of Directors of U S WEST,
Inc., a Colorado corporation ("U S WEST Colorado"), adopted a shareholder
rights plan governed by the terms of a rights agreement (as amended as of
_______, the "Original Agreement") and distributed one right (an "Existing
Right") for each share of Common Stock, without par value, of U S WEST
Colorado ("Existing Common Stock") outstanding at the close of business on
April 19, 1989 (the "Record Date"), and authorized the issuance of one
Existing Right for each share of Existing Common Stock issued between the
Record Date and the date hereof;
WHEREAS, on May __, 1995, the Board of Directors of U S WEST
Colorado adopted an agreement and plan of merger (the "Merger Agreement")
between U S WEST Colorado and the Company pursuant to which, subject to the
approval of the Merger Agreement by the shareholders of U S WEST Colorado, U
S WEST Colorado will be merged with and into the Company (the "Merger"), with
the Company continuing as the surviving corporation;
WHEREAS, on ______, 1995, the Board of Directors of the
Company authorized the assumption, effective as of the effective time of the
Merger under the Merger Agreement (the "Effective Time"), by the Company of
the obligations of U S WEST Colorado under the Original Agreement, as amended
herein to provide for the creation of U S WEST Communications Group Rights
("Communications Rights") and U S WEST Media Group Rights ("Media Rights");
WHEREAS, at the Effective Time, pursuant to the Merger
Agreement, each outstanding share of Existing Common Stock, together with the
Existing Right relating thereto, will be converted into (i) one share of U S
WEST Communications Group Common Stock, par value $0.01 per share, of the
Company (a "Communications Share"), together
with one Communications Right
and (ii) one share of U S WEST Media Group Common Stock, par value $0.01 per
share, of the Company (a "Media Share"), together with one Media Right;
WHEREAS, each Communications Right will initially represent
the right to purchase one one-hundredth of a share of Series A Junior
Participating Cumulative Preferred Stock, par value $1.00 per share, of the
Company, having the rights, powers and preferences set forth in Exhibit A-1
hereto, and each Media Right will initially represent the right to purchase
one one-hundredth of a share of Series B Junior Participating Cumulative
Preferred Stock, par value $1.00 per share, of the Company, having the
rights, powers and preferences set forth in Exhibit A-2 hereto, upon the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual agreements set forth herein, the parties hereto hereby agree as
follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act, as in effect on the date hereof.
(b) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "Beneficially Own":
(i) any securities that such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly,
for purposes of Section 13(d) of the Exchange Act and Rule 13d-3
promulgated under the Exchange Act, in each case as in effect on the
date hereof;
(ii) any securities that such Person or any of such Person's
Affiliates or Associates has the right to acquire (whether such right
is exercisable immediately, or only after the passage of time,
compliance with regulatory requirements, the fulfillment of a
condition, or otherwise) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or
otherwise,
2
provided that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, securities tendered pursuant to a tender offer 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;
(iii) any securities that such Person or any such Person's
Affiliates or Associates has the right to vote, alone or in concert
with others, pursuant to any agreement, arrangement or understanding,
provided that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (A) arises solely from a revocable
proxy given to such Person or any of such Person's Affiliates or
Associates in response to a public proxy solicitation made pursuant to
and in accordance with the applicable rules and regulations of the
Exchange Act, and (B) is not also then reportable on Schedule 13D under
the Exchange Act (or any comparable or successor report);
(iv) any securities that are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (other than
voting pursuant to a revocable proxy as described in the proviso to
Section 1(b)(iii) hereof) or disposing of any securities of the
Company; and
(v) on any day on or after the Distribution Date, all Rights
that prior to such date were represented by certificates for Common
Shares that such Person Beneficially Owns on such day.
(c) "Business Day" shall mean any day other than a Saturday,
a Sunday or a day on which banking institutions in the States of New York or
Colorado are authorized or obligated by law or executive order to close.
(d) "Cash Tender Offer Proposal" shall mean a written
proposal delivered to the Company by any Person (a "Prospective Offeror"),
which proposal:
(i) is for a tender offer for any and all of the outstanding
Voting Shares held by any Person other than
3
such Prospective Offeror or its Affiliates or Associates for cash at
the same price;
(ii) states that such Prospective Offeror has obtained firm
written financing commitments from recognized institutional financing
sources, or has on hand cash or cash equivalents, for the full amount
of all financing necessary to consummate the acquisition of Voting
Shares described in such Cash Tender Offer Proposal, and is accompanied
by reasonable evidence of the foregoing; and
(iii) contains the written agreement of the Prospective
Offeror to pay (or share with any other Prospective Offeror) the
Company's costs of any Special Meeting (as such term is defined in
Section 24(a) hereof), other than the Company's costs of preparing and
mailing proxy material for its own solicitation.
(e) "Close of Business" on any given date shall mean 5:00
p.m., Englewood, Colorado time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day, it shall mean 5:00 p.m., Englewood, Colorado
time, on the next succeeding Business Day.
(f) "Closing Price" of a stock or other security on any day
shall be the last sale price, regular way, per share of such stock or unit of
such other security on such day or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, 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 such stock or other security is 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 such stock or other
security is listed or admitted to trading or, if such stock or other security
is not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use or, if on any such date such
stock or other security is not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional
4
market maker that makes a market in such stock or other security and that is
selected by the Board of Directors of the Company.
(g) "Common Share" shall mean one Communications Share
and/or one Media Share, as the context requires, unless used with reference
to a Person other than the Company, in which case it shall mean one share of
the class of common stock of such Person having the greatest voting power per
share or, if such Person is a Subsidiary of another Person, one Common Share
of the Person that ultimately controls such Person.
(h) "Communications Exercise Price" shall have the meaning
ascribed to it in Section 7(c) hereof.
(i) "Communications Right" shall have the meaning set forth
in the third recital of this Agreement.
(j) "Communications Share" shall have the meaning set forth
in the fourth recital of this Agreement.
(k) "Current Market Price" per share of a stock or unit of
any other security on any date shall mean the average of the daily Closing
Prices of such stock or other security for the 30 consecutive Trading Days
through and including the Trading Day immediately preceding the date in
question; PROVIDED, HOWEVER, that if any event shall have caused the Closing
Price on any Trading Day during such 30-day period not to be fully comparable
with the Closing Price on the date in question (or, if no Closing Price is
available on the date in question, on the Trading Day immediately preceding
the date in question), then each such noncomparable Closing Price so used
shall be appropriately adjusted by the Board of Directors in order to make
the Closing Price on each Trading Day during the period used for the
determination of the Current Market Price fully comparable with the Closing
Price on such date in question (or, if applicable, the immediately preceding
Trading Day); and PROVIDED, FURTHER, HOWEVER, that if such stock or other
security is not publicly held or so listed or traded, "Current Market Price"
per share of such stock or unit of such other security shall mean the fair
value per share of such stock or unit of such other security as determined in
good faith by the Board of Directors of the Company based upon such
appraisals or valuation reports of such independent experts as the Board of
Directors shall in good faith determine appropriate, which determination
shall be
5
described in a statement filed by the Company with the Rights Agent.
(l) "Distribution Date" shall have the meaning ascribed to
it in Section 3 hereof.
(m) "Effective Time" shall have the meaning set forth in the
third recital of this Agreement.
(n) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(o) "Exercise Price" shall have the meaning ascribed to it
in Section 7(c) hereof.
(p) "Existing Common Stock" shall have the meaning set forth
in the third recital of this Agreement.
(q) "Expiration Date" shall mean April 6, 1999.
(r) "Fair Offer" shall have the meaning ascribed to it in
Section 24(b) hereof.
(s) "Independent Director" shall mean any director of the
Company who (i) became a director of the Company prior to the 20% Ownership
Date or (ii) became a director of the Company on or after the 20% Ownership
Date, was recommended to become a director of the Company by a majority of
the Independent Directors then in office and is not (A) a 20% Stockholder or
an Affiliate or Associate of a 20% Stockholder, (B) an officer, director or
employee of such 20% Stockholder, Affiliate or Associate, or (C) a relative
or nominee of any of the foregoing. For purposes of this subsection (n), a
director shall be deemed to be a "nominee" of a Person referred to in clause
(ii) above if such director was elected to the Board of Directors of the
Company by a vote of stockholders in which such director failed to receive
the affirmative majority of the votes cast by Persons other than such Person
and such Person's Affiliates and Associates. Whenever this Agreement
requires or allows action to be taken by a majority of the Independent
Directors, with or without the concurrence of a specified minimum number of
Independent Directors, if necessary for such action to be valid under
applicable law, such action may be taken by the Board of Directors or a duly
authorized committee thereof, provided that the number of Independent
Directors who are members of the Board of Directors or of such committee and
who vote in favor of such
6
action constitutes a majority of the Independent Directors then in office and
equals or exceeds any such specified minimum number of Independent Directors.
(t) "Media Exercise Price" shall have the meaning ascribed
to it in Section 7(c) hereof.
(u) "Media Right" shall have the meaning set forth in the
third recital of this Agreement.
(v) "Media Share" shall have the meaning set forth in the
fourth recital of this Agreement.
(w) "Merger" shall have the meaning set forth in the second
recital of this Agreement.
(x) "Merger Agreement" shall
have the meaning set forth in the second recital of this Agreement.
(y) "Person" shall mean any individual, firm, partnership,
corporation, association, group (as such term is used in Rule 13d-5
promulgated under the Exchange Act as in effect or the date hereof) or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(z) "Preferred Share" shall mean one Series A Preferred
Share and/or one Series B Preferred Share, as the context requires.
(aa) "Redemption Date" shall mean the date of the action of
the Board of Directors of the Company directing the Company to redeem the
Rights pursuant to Section 23(a) hereof, or such time and date thereafter as
the Board of Directors may specify for redemption of the Rights.
(ab) "Redemption Price" shall have the meaning ascribed to it
in Section 23(a) hereof.
(ac) "Rights" shall mean Communications Right and/or Media
Rights, as the context requires.
(ad) "Section 11(a)(ii) Event" shall have the meaning
ascribed to it in Section 11(a)(ii) hereof.
(ae) "Section 13(a) Event" shall have the meaning ascribed to
it in Section 13(a) hereof.
7
(af) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(ag) "Series A Preferred Share" shall mean a share of the
Series A Junior Participating Cumulative Preferred Stock, par value $1.00 per
share, of the Company, which shall have the rights, powers and preferences
set forth in Exhibit A-1 hereto.
(ah) "Series B Preferred Share" shall mean a share of the
Series B Junior Participating Cumulative Preferred Stock, par value $1.00 per
share, of the Company, which shall have the rights, powers and preferences
set forth in Exhibit A-2 hereto.
(ai) "Subsidiary" of any Person shall mean any corporation or
other Person of which equity securities or equity interests representing a
majority of the voting power are owned, directly or indirectly, or which is
effectively controlled, by such Person.
(aj) "Trading Day" shall mean, as to any stock or other
security, a day on which the principal national securities exchange on which
such stock or other security is listed or admitted to trading is open for the
transaction of business or, if such stock or other security is not listed or
admitted to trading on any national securities exchange, a Business Day.
(ak) "Voting Share" shall mean (i) a Common Share of the
Company and (ii) any other share of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote together with
the Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or
winding up. References in this Agreement to a percentage or portion of the
outstanding Voting Shares shall be deemed a reference to the percentage or
portion of the total votes entitled to be cast by the holders of the
outstanding Voting Shares.
(al) "20% Ownership Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by
the Company or a 20% Stockholder containing the facts by virtue of which a
Person has become a 20% Stockholder.
8
(am) "20% Stockholder" shall mean any Person that, together
with all Affiliates and Associates of such Person, hereafter acquires
Beneficial Ownership of, in the aggregate, a number of Voting Shares of the
Company equal to 1% or more of the Voting Shares then outstanding and
thereupon or thereafter Beneficially Owns 20% or more of the Voting Shares of
the Company then outstanding; PROVIDED, HOWEVER, that the term "20%
Stockholder" shall not include: (i) the Company, any wholly-owned Subsidiary
of the Company, any employee benefit plan of the Company or of a Subsidiary
of the Company, or any Person holding Voting Shares for or pursuant to the
terms of any such employee benefit plan; or (ii) any Person if such Person
would not otherwise be a 20% Stockholder but for a reduction in the number of
outstanding Voting Shares resulting from a stock repurchase program or other
similar plan of the Company or from a self-tender offer of the Company, which
plan or tender offer commenced on or after the date hereof; PROVIDED,
HOWEVER, that the term "20% Stockholder" shall include such Person from and
after the first date upon which (A) such Person, since the date of the
commencement of such plan or tender offer, shall have acquired Beneficial
Ownership of, in the aggregate, a number of Voting Shares of the Company
equal to 1% or more of the Voting Shares of the Company then outstanding and
(B) such Person, together with all Affiliates and Associates of such Person,
shall Beneficially Own 20% or more of the Voting Shares of the Company then
outstanding. In calculating the percentage of the outstanding Voting Shares
that are Beneficially Owned by a Person for purposes of this subsection (am),
Voting Shares that are Beneficially Owned by such Person(bb) shall be deemed
outstanding, and Voting Shares that are not Beneficially Owned by such Person
and that are subject to issuance upon the exercise or conversion of
outstanding conversion rights, rights (other than Rights), warrants or
options shall not be deemed outstanding. Any determination made by the Board
of Directors of the Company as to whether any Person is or is not a 20%
Stockholder shall be conclusive and binding upon all holders of Rights.
(an) "30% Stockholder" shall mean any Person that, together
with all Affiliates and Associates of such Person, hereafter acquires
Beneficial Ownership of, in the aggregate, a number of Voting Shares of the
Company equal to 1% or more of the Voting Shares then outstanding and
thereupon or thereafter Beneficially Owns 30% or more of the Voting Shares of
the Company then outstanding; PROVIDED, HOWEVER, that the term "30%
Stockholder" shall not include:
9
(i) the Company, any wholly-owned Subsidiary of the Company, any employee
benefit plan of the Company or of a Subsidiary of the Company, or any Person
holding Voting Shares for or pursuant to the terms of any such employee
benefit plan; or (ii) any Person if such Person would not otherwise be a 30%
Stockholder but for a reduction in the number of outstanding Voting Shares
resulting from a stock repurchase program or other similar plan of the
Company or from a self-tender offer of the Company, which plan or tender
offer commenced on or after the date hereof; PROVIDED, HOWEVER, that the term
"30% Stockholder" shall include such Person from and after the first date
upon which (A) such Person, since the date of the commencement of such plan
or tender offer, shall have acquired Beneficial Ownership of, in the
aggregate, a number of Voting Shares of the Company equal to 1% or more of
the Voting Shares of the Company then outstanding and (B) such Person,
together with all Affiliates and Associates of such Person, shall
Beneficially Own 30% or more of the Voting Shares of the Company then
outstanding. In calculating the percentage of the outstanding Voting Shares
that are Beneficially Owned by a Person for purposes of this subsection (an),
Voting Shares that are Beneficially Owned by such Person shall be deemed
outstanding, and Voting Shares that are not Beneficially Owned by such Person
and that are subject to issuance upon the exercise or conversion of
outstanding conversion rights, rights (other than Rights), warrants or
options shall not be deemed outstanding. Any determination made by the Board
of Directors of the Company as to whether any Person is or is not a 30%
Stockholder shall be conclusive and binding upon all holders of Rights.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) "Distribution Date" shall mean the date, after the date
hereof, that is the earlier of (i) the tenth Business Day following the date
of the commencement of, or the first public announcement of the intent of any
Person (other than the Company, any wholly-owned Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company,
or any Person holding Common
10
Shares for or pursuant to the terms of any such employee benefit plan) to
commence a tender offer (other than a Fair Offer) or exchange offer, the
consummation of which would cause any Person to become a 30% Stockholder, or
(ii) the date of the first Section 11(a)(ii) Event.
(b) Until the Distribution Date, (i) the Communications
Rights and Media Rights shall be represented by certificates for
Communications Shares and Media Shares, respectively (all of which
certificates for Communications Shares and Media Shares shall also be deemed
to be certificates for Communications Rights and Media Rights, respectively),
and not by separate certificates, (ii) the record holder of the Common Shares
represented by each of such certificates shall be the record holder of the
Rights represented thereby, and (iii) the Rights shall be transferable only
in connection with the transfer of Common Shares. Until the earliest of the
Distribution Date, the Redemption Date or the Expiration Date, the surrender
for transfer of such certificates for Common Shares shall also constitute the
surrender for transfer of the Rights represented thereby.
(c) As soon as practicable after the Distribution Date, and
after notification by the Company, the Rights Agent shall send by
first-class, postage-prepaid mail to each record holder of (i) Communications
Shares, as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, a certificate
substantially in the form of Exhibit B-1 hereto (the "Communications Right
Certificates") representing one Communications Right for each Communications
Share so held and (ii) Media Shares, as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a certificate substantially in the form of Exhibit B-2 hereto (the
"Media Right Certificates" and, together with the Communications Right
Certificates, the "Right Certificates") representing one Media Right for each
Media Share so held. Notwithstanding the foregoing, the Rights Agent shall
not send any Right Certificate to any 20% Stockholder or any of its
Affiliates or Associates or to any Person if the Rights held by such Person
are Beneficially Owned by a 20% Stockholder or any of its Affiliates or
Associates. From and after the Distribution Date, the Rights shall be
represented solely by such Right Certificates and may only be transferred by
the transfer of such Right Certificates, and the holders of such Right
11
Certificates, as listed in the records of the Company or any transfer agent
or registrar for such Rights, shall be the record holders of such Rights.
Any determination made by a majority of the Board of Directors of the Company
as to whether any Common Shares are or were Beneficially Owned at any time by
a 20% Stockholder or an Affiliate or Associate of a 20% Stockholder shall be
conclusive and binding upon all holders of Rights.
(d) Rights shall be issued in respect of all Common Shares
which are issued (whether originally issued or from the Company's treasury)
after the Effective Time but prior to the earliest of the Distribution Date,
the Redemption Date or the Expiration Date. Certificates representing such
Common Shares shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also represents Rights that entitle the
holder hereof to certain rights as set forth in a Rights
Agreement dated as of April 7, 1989, as amended, by and between
the Corporation and State Street Bank and Trust Company, as
Rights Agent (the "Rights Agreement"), the terms and conditions
of which are hereby incorporated herein byreference and a copy of
which is on file atthe principal executive offices of the
Corporation.Under certain circumstances specified in the Rights
Agreement, such Rights will be represented by separate
certificates and will no longer be represented by this
certificate.Under certain circumstances specified in the Rights
Agreement, Rights beneficially owned by certain persons may
become null and void. The Corporation will mail to the
recordholder of this certificate a copy of the Rights Agreement
without charge promptly following receipt of a written request
therefor.
Certificates for all other Common Shares shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:
This certificate does not represent any Right issued pursuant
to the terms of a
12
Rights Agreement dated as of April 7, 1989, as amended, by and
between the Corporation and State Street Bank and Trust Company,
as Rights Agent.
Section 4. FORM OF RIGHT CERTIFICATES. The Communications
Right Certificates and Media Right Certificates and the form of assignment,
including certificate, and the form of election to purchase, including
certificate, printed on the reverse thereof, when, as and if issued, shall be
substantially the same as Exhibit B-1 and Exhibit B-2 hereto, respectively,
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
upon which the Rights or the securities of the Company issuable upon exercise
of the Rights may from time to time be listed, or to conform to usage.
Subject to Section 22 hereof, Right Certificates, whenever issued, that are
issued in respect of Common Shares that were issued and outstanding as of the
Close of Business on the Distribution Date, shall be dated as of the
Distribution Date.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its Vice Chairman of the Board, its
President or any Vice President, either manually or by facsimile signature,
and may have affixed thereto the Company's seal or a facsimile thereof
attested by its Secretary or any Assistant Secretary, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless so
countersigned; PROVIDED, HOWEVER, that the Company will use its best efforts
to obtain approvals of stock exchanges and any other approvals required for
use of a facsimile signature of the Rights Agent in lieu of a manual
signature and if such approvals are obtained the Right Certificates shall be
valid if countersigned by facsimile signature. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may
nevertheless be countersigned by the Rights
13
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company. Any Right Certificate may be signed on behalf
of the Company by any person who at the actual date of such execution shall
be a proper officer of the Company to sign such Right Certificate, even
though such person was not such an officer at the date of the execution of
this Agreement.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept at its principal offices books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of Right Certificates, the
number of Rights represented on its face by each Right Certificate and the
date of each Right Certificate.
Section 6. TRANSFER SPLIT UP COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 6(c), 7(d) and 14
hereof, at any time after the Close of Business on the Distribution Date, and
so long as the Rights represented thereby remain outstanding, any one or more
Right Certificates may be transferred, split up, combined or exchanged for
one or more Right Certificates representing the same aggregate number of
Rights as the Right Certificates surrendered. Any registered holder desiring
to transfer, split up, combine or exchange one or more Right Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent with the form of assignment,
including certificate, on the reverse side thereof completed and duly
executed, with signature guaranteed. Thereupon, the Rights Agent shall
countersign and deliver to the person entitled thereto one or more Right
Certificates, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate and, in case of loss, theft or destruction,
of
14
indemnity or security reasonably satisfactory to them and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of such Right Certificate if mutilated, the Company shall issue
and deliver to the Rights Agent for delivery to the record holder of such
Right Certificate a new Right Certificate of like tenor in lieu of such lost,
stolen, destroyed or mutilated Right Certificate.
(c) Notwithstanding anything to the contrary in this Section
6, the Rights Agent shall not countersign and deliver a Right Certificate to
any Person if such Right Certificate represents, or would represent when held
by such Person, Rights that had become or would become null and void pursuant
to Section 7(d) hereof.
Section 7. EXERCISE OF RIGHTS.
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and 7(g) hereof and the other
provisions of this Agreement, at any time after the Close of Business on the
Distribution Date and prior to the Close of Business on the earlier of the
Redemption Date or the Expiration Date, the registered holder of any Right
Certificate may exercise the Rights represented thereby in whole or in part
upon surrender of such Right Certificate, with the form of election to
purchase, including certificate, on the reverse side thereof completed and
duly executed, with signature guaranteed, to the Rights Agent at the office
of the Rights Agent in Boston, Massachusetts, together with payment of the
Exercise Price for each Right exercised. Upon the exercise of an exercisable
Communications Right and payment of the Communications Exercise Price in
accordance with the provisions of this Agreement, the holder of such
Communications Right shall be entitled to receive, subject to adjustment as
provided herein, one one-hundredth of a Series A Preferred Share. Upon the
exercise of an exercisable Media Right and payment of the Media Exercise
Price in accordance with the provisions of this Agreement, the holder of such
Media Right shall be entitled to receive, subject to adjustment as provided
herein, one one-hundredth of a Series B Preferred Share.
15
(c) The exercise price for the exercise of each
Communications Right (the "Communications Exercise Price") shall initially be
$100 and shall be payable in lawful money of the United States of
America in accordance with Section 7(f) hereof. The exercise price for the
exercise of each Media Right (the "Media Exercise Price") shall initially be
$80 and shall be payable in lawful money of the United States of
America in accordance with Section 7(f) hereof. As used herein, "Exercise
Price" shall mean the Communications Exercise Price and/or the Media Exercise
Price, as the context requires. The Exercise Price and the number of
Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event
or a Section 13(a) Event, Common Shares and/or other securities) to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and the other provisions of
this Agreement.
(d) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event or
a Section 13(a) Event, any Rights that are or were Beneficially Owned by a
20% Stockholder or any Affiliate or Associate of a 20% Stockholder at any
time on or after the Distribution Date shall be null and void, and any holder
of such Rights (whether or not such holder is a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder) shall thereafter have no right
to exercise such Rights.
(e) In case the registered holder of any Right Certificate
shall exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to such holder's duly authorized assigns, subject
to the provisions of Section 14 hereof.
(f) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase, including
certificate, completed and duly executed, with signature guaranteed,
accompanied by payment of the Exercise Price for each Right to be exercised
and an amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof in cash,
or by certified check or cashier's check payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) requisition from the transfer
agent of the Preferred Shares (or make
16
available, if the Rights Agent is the transfer agent), certificates for the
number of Preferred Shares to be purchased, and the Company hereby
irrevocably authorizes such transfer agent to comply with all such requests,
and/or, as provided in Section 14 hereof, requisition from the depositary
agent described therein depositary receipts representing such number of
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with such depositary agent) and the Company
hereby directs such depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional Preferred Shares in accordance with Section 14
hereof, (iii) after receipt of such certificates, depositary receipts or
cash, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt thereof,
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(g) Notwithstanding the foregoing provisions of this Section
7, the exercisability of the Rights shall be suspended for such period as
shall reasonably be necessary for the Company to register under the
Securities Act and any applicable securities law of any jurisdiction the
Preferred Shares to be issued pursuant to the exercise of the Rights;
PROVIDED, HOWEVER, that nothing contained in this Section 7 shall relieve the
Company of its obligations under Section 9(c) hereof.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered
to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company or shall,
at the written request of the Company, destroy
17
such canceled Right 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 shall cause to be reserved and kept
available out of its authorized and unissued equity securities (or out of its
authorized and issued equity securities held in its treasury), the number of
such equity securities that will from time to time be sufficient to permit
the exercise in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise
of the Rights are listed on any national securities exchange, the Company
shall use its best efforts, from and after such time as the Rights become
exercisable, to cause all such securities issued or reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) If necessary to permit the issuance of securities upon
exercise of the Rights, the Company shall use its best efforts, from and
after the Distribution Date, to register such securities under the Securities
Act and any applicable securities laws and to keep such registration
effective until the earlier of the Redemption Date or the Expiration Date.
(d) The Company shall take all such action as may be
necessary to ensure that all securities delivered upon exercise of the Rights
shall, at the time of delivery of the certificates for such securities
(subject to payment of the Exercise Price), be duly and validly authorized
and issued and fully paid and nonassessable securities.
(e) The Company shall pay when due and payable any and all
federal and state transfer taxes and charges that may be payable in respect
of the issuance or delivery of the Right Certificates or of any securities
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax that may be payable in respect of any transfer or
delivery of a Right Certificate to a Person other than, or the issuance or
delivery of a certificate for securities in respect of a name other than that
of, the registered holder of the Right Certificate representing Rights
surrendered for exercise, or to issue or
18
deliver any certificate for securities upon the exercise of any Right until
any such tax shall have been paid (any such tax being payable by the holder
of such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
(f) With respect to the Common Shares and/or other
securities issuable pursuant to Sections 11(a)(ii) and 11(a)(iii) hereof, the
foregoing covenants shall be applicable only upon and following the
occurrence of a Section 11(a)(ii) Event.
Section 10. SECURITIES RECORD DATE. Each person in whose
name any certificate for securities of the Company is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the securities represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate representing such
Rights was duly surrendered and payment of the Exercise Price (and any
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of
such surrender and payment is a date upon which the securities transfer books
of the Company are closed, such person shall be deemed to have become the
record holder of such securities on, and such certificate shall be dated, the
next succeeding Business Day on which the securities transfer books of the
Company are open.
Section 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES
ISSUABLE UPON EXERCISE OF RIGHTS OR NUMBER OF RIGHTS. The Exercise Price,
the number and kind of securities that may be purchased upon exercise of a
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event that the Company shall at any time after
the Effective Time and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date (A) declare or pay any
dividend on the Preferred Shares payable in Preferred Shares or Voting
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares,
or (D) issue Preferred Shares or Voting Shares in a reclassification of
the Preferred Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing
or surviving corporation), then and in each such event,
19
the number and kind of Preferred Shares or other securities issuable upon
the exercise of a Right on such date shall be proportionately adjusted so
that the holder of any Right exercised on or after such date shall be
entitled to receive, upon the exercise thereof and payment of the
Exercise Price, the aggregate number and kind of Preferred Shares or
other securities or other property, as the case may be, that, if such
Right had been exercised immediately prior to such date and at a time
when such Right was exercisable and the transfer books of the Company
were open, such holder would have owned upon such exercise and would
have been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs that 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 a 20%
Ownership Date shall have occurred and neither the Redemption Date nor
the Expiration Date shall have occurred prior to the Close of Business
on the tenth Business Day following such 20% Ownership Date, then, and
upon each such event, proper provision shall be made so that except as
provided in Section 7(d) hereof, (x) each holder of a Communications
Right shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and payment of
the then current Communications Exercise Price, such number of
Communications Shares as shall equal the result obtained by multiplying
the then current Communications Exercise Price by the then number of
one-hundredths of a Series A Preferred Share for which a Communications
Right was exercisable (or, if the Distribution Date shall not have
occurred prior to the date of such Section 11(a)(ii) Event, the number
of one-hundredths of a Series A Preferred Share for which a
Communications Right would have been exercisable if the Distribution
Date had occurred on the Business Day immediately preceding the date of
such Section 11(a)(ii) Event) immediately prior to such Section
11(a)(ii) Event, and dividing that product by 50% of the Current Market
Price (determined pursuant to Section 11(d) hereof) of a Communications
Share on the
20
date of occurrence of the relevant Section 11(a)(ii) Event (such number
of Communications Shares being hereinafter referred to as the
"Communications Adjustment Shares") and (y) each holder of a Media
Right shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and payment of
the then current Media Exercise Price, such number of Media Shares as
shall equal the result obtained by multiplying the then current Media
Exercise Price by the then number of one-hundredths of a Series B
Preferred Share for which a Media Right was exercisable (or, if the
Distribution Date shall not have occurred prior to the date of such
Section 11(a)(ii) Event, the number of one-hundredths of a Series B
Preferred Share for which a Media Right would have been exercisable if
the Distribution Date had occurred on the Business Day immediately
preceding the date of such Section 11(a)(ii) Event) immediately prior
to such Section 11(a)(ii) Event, and dividing that product by 50% of
the Current Market Price (determined pursuant to Section 11(d) hereof)
of a Media Share on the date of occurrence of the relevant Section
11(a)(ii) Event (such number of Media Shares being hereinafter referred
to as the "Media Adjustment Shares"). Successive adjustments shall be
made pursuant to this paragraph each time a Section 11(a)(ii) Event
occurs.
(iii) In the event that on the date of a Section 11(a)(ii)
Event the aggregate number of Communications Shares or Media Shares
that are authorized by the Company's Restated Certificate of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Communications Rights or Media Rights
is less than the aggregate number of Communications Adjustment Shares
or Media Adjustment Shares thereafter issuable upon the exercise in
full of the Communications Rights or Media Rights, as the case may be,
in accordance with Section 11(a)(ii) hereof (the excess of such number
of Communications Adjustment Shares over and above such number of
Communications Shares being hereinafter referred to as the
"Communications Unavailable Adjustment Shares" and the excess of such
number of Media Adjustment Shares over and above such number of Media
Shares being hereinafter referred to as the "Media Unavailable
Adjustment Shares"), the Company shall substitute for the pro rata
portion of the Communications Unavailable Adjustment
21
Shares or Media Unavailable Adjustment Shares that would otherwise be
issuable thereafter upon the exercise of each Communications Right or
Media Right, as the case may be, and payment of the Communications
Exercise Price or the Media Exercise Price, as applicable, (A) cash, (B)
other equity securities of the Company (including, without limitation,
shares of preferred stock of the Company or units of such shares having
the same value as one Communications Share or one Media Share, as
applicable, (C) debt securities of the Company, (D) other assets, or
(E) any combination of the foregoing, in each case having an aggregate
value equal to the aggregate value of the Communications Unavailable
Adjustment Shares or the Media Unavailable Adjustment Shares, as
applicable, for which substitution is made. Subject to Section 7(d)
hereof, in the event that the Company takes any action pursuant to this
Section 11(a)(iii), such action shall apply uniformly to all
outstanding Rights.
(b) In the event that the Company shall, at any time after
the Effective Time and prior to the Close of Business on the earlier of the
Redemption Date or the Expiration Date, fix a record date prior to the
earlier of the Redemption Date or the Expiration Date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
initially to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as Preferred Shares ("Preferred Share
Equivalents")) or securities convertible into Preferred Shares or Preferred
Share Equivalents, at a price per Preferred Share or Preferred Share
Equivalent (or having a conversion price per share, if a security convertible
into Preferred Shares or Preferred Share Equivalents) less than the Current
Market Price per Preferred Share on such record date, then the Exercise Price
to be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be equal to the sum of the number of Preferred
Shares outstanding on such record date plus the number of Preferred Shares
that the aggregate offering price of the total number of Preferred Shares
and/or Preferred Share Equivalents to be so offered (and/or the aggregate
initial conversion price of the convertible securities to be so offered)
would purchase at such Current Market Price, and the denominator of which
shall be equal to the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or
22
Preferred Share Equivalents to be offered for subscription or purchase (or
into which the convertible securities to be so offered are initially
convertible); PROVIDED, HOWEVER, that if such rights, options or warrants are
not exercisable immediately upon issuance but become exercisable only upon the
occurrence of a specified event or the passage of a specified period of time,
then the adjustment to the Exercise Price shall be made and become effective
only upon the occurrence of such event or such passage of time, and such
adjustment shall be made as if the record date for the issuance of such rights,
options or warrants had been the business day immediately preceding the date
upon which such rights, options or warrants became exercisable. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment to the
Exercise Price shall be made successively whenever such a record date is
fixed, and in the event that such rights or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise Price that would then be
in effect if such record date had not been fixed.
(c) In the event that the Company shall, at any time after
the Effective Time and prior to the Close of Business on the earlier of the
Redemption Date or the Expiration Date, fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of securities or assets (other than a
distribution of securities for which an adjustment is required under Section
11(a)(i) or (b) hereof or a regular quarterly cash dividend), the Exercise
Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be equal to the excess of
the Current Market Price per Preferred Share on such record date over and
above the fair market value of the portion of the securities or assets to be
so distributed with respect to one Preferred Share, and the denominator of
which shall be equal to such Current Market Price per Preferred Share. Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such a distribution is not so made, the Exercise Price
shall be adjusted to be the Exercise Price that would then be in effect if
such record date had not been fixed.
23
(d) For the purpose of any computation under this Section
11, (i) if the Series A Preferred Shares are not publicly held or so listed
and traded, the "Current Market Price" per Series A Preferred Share shall be
conclusively deemed to be an amount equal to the product of 56 (as such
number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Communications Shares
occurring after the Effective Time) times the Current Market Price of the
Communications Shares and (ii) if the Series B Preferred Shares are not
publicly held or so listed and traded, the "Current Market Price" per Series
B Preferred Share shall be conclusively deemed to be an amount equal to the
product of 44 (as such number may be appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations with respect to the
Media Shares occurring after the Effective Time) times the Current Market Price
of the Media Shares. If none of the Communications Shares, Media Shares or the
Preferred Shares are publicly held or so listed and traded, the "Current Market
Price" per Preferred Share shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed by the Company with the Rights Agent and
shall be conclusive for all purposes.
(e) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in the Exercise Price; PROVIDED, HOWEVER, that any adjustments that by reason
of this Section 11(e) are not required to be made shall be cumulated and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a Share or other share or one-millionth of a Preferred Share, as the case
may be.
(f) If, as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any securities of the Company other than Preferred
Shares, the number of such other securities so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Preferred Shares contained in this Section 11, and the other provisions of
this Agreement with respect to Preferred
24
Shares shall apply on like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Exercise Price hereunder shall represent the
right to purchase, at the adjusted Exercise Price, the number of
one-hundredths of a Preferred Share 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) below, upon each adjustment of the Exercise Price
as a result of the calculations made in Sections 11(b) and 11(c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter represent the right to purchase, at the adjusted Exercise Price,
that number of one-hundredths of a Preferred Share (calculated to the nearest
one-millionth of a Preferred Share) obtained by multiplying (i) the number of
one-hundredths of a Preferred Share purchasable upon the exercise of one
Right immediately prior to such adjustment of the Exercise Price by (ii) the
Exercise Price in effect immediately prior to such adjustment, and dividing
the product so obtained by the Exercise Price in effect immediately after
such adjustment.
(i) The Company may elect, on or after the date of any
adjustment of the Exercise Price, to adjust the number of Rights instead of
making any adjustment in the number of Preferred Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one-hundredths of
a Preferred Share 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 Exercise Price in effect immediately
prior to the adjustment of the Exercise Price by the Exercise Price in effect
immediately after such adjustment of the Exercise Price. The Company shall
make a public announcement of its election to adjust the number of Rights
pursuant to this Section 11(i), 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 Exercise Price is adjusted or any
day thereafter, but, if separate Right Certificates have
25
been issued, it shall be at least 10 days after the date of such public
announcement. If separate Right 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 Right Certificates on such record date Right Certificates
representing, 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, cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of such adjustment, and upon surrender thereof if required
by the Company, new Right Certificates representing all the Rights to which
such holders shall be entitled after such adjustment. Right Certificates to
be so distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the holders of record
of Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise
Price or the number of one-hundredths of a Preferred Share issuable upon the
exercise of one Right, the Right Certificates theretofore and thereafter
issued may continue to express the Exercise Price per one one-hundredth of a
Preferred Share and the number of Preferred Shares issuable upon the exercise
of one Right that were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the
Company shall take any corporate action that may, in the advice or opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable one one-hundredths of a Preferred Share at
such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Exercise 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 of the number of one-hundredths of a Preferred Share and other
capital stock or securities of the
26
Company, if any, issuable upon such exercise over and above the number of
one-hundredths of a Preferred Share and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of the Exercise
Price in effect prior to such adjustment; PROVIDED, HOWEVER, that the Company
shall deliver to such holder a due bill or other appropriate instrument
representing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such further
adjustments in the number of one-hundredths of a Preferred Share that may be
purchased upon exercise of one Right, and such further adjustments in the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it, in its sole discretion, shall
determine to be advisable in order that any (i) consolidation or subdivision
of the Preferred Shares, (ii) issuance wholly for cash of any Preferred
Shares at less than the Current Market Price thereof, (iii) issuance wholly
for cash of Preferred Shares or securities that by their terms are
convertible into or exchangeable for Preferred Shares, (iv) dividends on
Preferred Shares payable in Preferred Shares, or (v) issuance of rights,
options or warrants referred to in Section 11(b) hereof, hereafter made by
the Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
Section 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER
OF SHARES ISSUABLE UPON EXERCISE OF RIGHTS. Whenever an adjustment is made as
provided in Section 11 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment and a brief statement of the facts
giving rise to such adjustment, (b) file with the Rights Agent and with each
transfer agent for the securities issuable upon exercise of the Rights a copy
of such certificate, and (c) mail a brief summary thereof to each holder of
Rights in accordance with Section 26 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or to give
such notice shall not affect the validity or the force and effect of such
adjustment. Any adjustment to be made pursuant to Sections 11 or 13 hereof
shall be effective as of the date of the event giving rise to such adjustment.
Section 13. CONSOLIDATION, MERGER, OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
27
(a) In the event (a "Section 13(a) Event") that, at any time
on or after the 20% Ownership Date and prior to the earlier of the Redemption
Date or the Expiration Date, (x) the Company shall, directly or indirectly,
consolidate with or merge with and into any other Person (other than any
employee benefit plan of the Company, or any Person holding Common Shares for
or pursuant to the terms of any such employee benefit plan) and the Company
shall not be the continuing or surviving corporation in such consolidation or
merger, (y) any Person (other than any employee benefit plan of the Company,
or any Person holding Common Shares for or pursuant to the terms of any such
employee benefit plan) shall, directly or indirectly, consolidate with or
merge with and into the Company and the Company shall be the continuing or
surviving corporation in such merger and, in connection with such merger, all
or part of the Common Shares shall be changed into or exchanged for stock or
other securities of any Person or cash or any other property, or (z) the
Company and/or any one or more of its Subsidiaries shall, directly or
indirectly, sell or otherwise transfer, in one or more transactions (other
than transactions in the ordinary course of business), assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons other than
the Company or one or more of its wholly-owned Subsidiaries (such Persons,
together with the Persons described in clauses (x) and (y) above shall be
collectively referred to in this Section 13 as the "Surviving Person"), then,
and in each such case, proper provision shall be made so that:
(i) except as provided in Section 7(d) hereof, (x) each
holder of a Communications Right shall thereafter have the right to
receive, upon the exercise thereof in accordance with the terms of this
Agreement and payment of the then current Communications Exercise
Price, such number of validly authorized and issued, fully paid and
nonassessable Common Shares of the Surviving Person as shall be equal
to a fraction, the numerator of which is the product of the then
current Communications Exercise Price multiplied by the number of
one-hundredths of a Series A Preferred Share purchasable upon the
exercise of one Communications Right immediately prior to the first
Section 13(a) Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first Section 13(a) Event, the product of the number of
one-hundredths of a Series A Preferred Share purchasable upon the
exercise of a Communications
28
Right (or, if the Distribution Date shall not have occurred prior to the
date of such Section 11(a)(ii) Event, the number of one-hundredths of a
Series A Preferred Share that would have been so purchasable if the
Distribution Date had occurred on the Business Day immediately
preceding the date of such Section 11(a)(ii) Event) immediately prior
to such Section 11(a)(ii) Event, multiplied by the Communications
Exercise Price in effect immediately prior to such Section 11(a)(ii)
Event), and the denominator of which is 50% of the Current Market Price
per Common Share of the Surviving Person on the date of consummation of
such Section 13(a) Event and (y) each holder of a Media Right shall
thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement and payment of the then
current Media Exercise Price, such number of validly authorized and
issued, fully paid and nonassessable Common Shares of the Surviving
Person as shall be equal to a fraction, the numerator of which is the
product of the then current Media Exercise Price multiplied by the
number of one-hundredths of a Series B Preferred Share purchasable upon
the exercise of one Media Right immediately prior to the first Section
13(a) Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first Section 13(a) Event, the product of the number of one-hundredths
of a Series B Preferred Share purchasable upon the exercise of a Media
Right (or, if the Distribution Date shall not have occurred prior to
the date of such Section 11(a)(ii) Event, the number of one-hundredths
of a Series B Preferred Share that would have been so purchasable if
the Distribution Date had occurred on the Business Day immediately
preceding the date of such Section 11(a)(ii) Event) immediately prior
to such Section 11(a)(ii) Event, multiplied by the Media Exercise Price
in effect immediately prior to such Section 11(a)(ii) Event), and the
denominator of which is 50% of the Current Market Price per Common
Share of the Surviving Person on the date of consummation of such
Section 13(a) Event;
(ii) the Surviving Person shall thereafter be liable for and
shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to
this Agreement;
29
(iii) the term "Company" shall thereafter be deemed to refer
to the Surviving Person; and
(iv) the Surviving Person shall take such steps (including,
but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with
such consummation as may be necessary to ensure that the provisions
hereof shall thereafter be applicable to its Common Shares thereafter
deliverable upon the exercise of Rights.
(b) Notwithstanding the foregoing, if the Section 13(a)
Event is the sale or transfer in one or more transactions of assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole), but less than 100% thereof,
then each Person acquiring all or a portion thereof shall assume the
obligations of the Company as to a fraction of each of the Rights equal to
the fraction of the assets of the Company and its Subsidiaries (taken as a
whole) acquired by such Person, and the obligations of the Company as to the
remaining fraction of each of the Rights shall continue to be the obligations
of the Company.
(c) The Company shall not consummate a Section 13(a) Event
unless prior thereto the Company and the Surviving Person shall have executed
and delivered to the Rights Agent a supplemental agreement confirming that
such Surviving Person shall, upon consummation of such Section 13(a) Event,
assume this Agreement in accordance with Section 13 hereof, that all rights
of first refusal or preemptive rights in respect of the issuance of Common
Shares of such Surviving Person upon exercise of outstanding Rights have been
waived and that such Section 13(a) Event shall not result in a default by
such Surviving Person under this Agreement, and further providing that, as
soon as practicable after the date of consummation of such Section 13(a)
Event, such Surviving Person shall:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its
best efforts to cause such registration statement to become effective
as soon as practicable after such filing, use its best efforts to cause
such registration statement to remain effective (with a prospectus at
all times meeting the
30
requirements of the Securities Act) until the Expiration Date, and
similarly comply with all applicable state securities laws;
(ii) use its best efforts to list (or continue the listing
of) the Rights and the Common Shares of the Surviving Person
purchasable upon exercise of the Rights on a national securities
exchange, or use its best efforts to cause the Rights and such Common
Shares to meet the eligibility requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for such Surviving Person that comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
(d) In the event that at any time after the occurrence of a
Section 11(a)(ii) Event some or all of the Rights shall not have been
exercised pursuant to Section 11 hereof prior to the date of a Section 13(a)
Event, such Rights shall thereafter be exercisable only in the manner
described in Section 13(a) hereof (without taking into account any prior
adjustment required by Section 11(a)). In the event that a Section 11(a)(ii)
Event occurs on or after the date of a Section 13(a) Event, Rights shall not
be exercisable pursuant to Section 11 hereof but shall instead be exercisable
pursuant to, and only pursuant to, this Section 13.
(e) The provisions of this Section 13 shall apply to each
successive merger, consolidation, sale or other transfer constituting a
Section 13(a) Event.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates that represent fractional Rights.
If the Company shall determine not to issue such fractional Rights, the
Company shall pay to the registered holders of the Right Certificates with
respect to which such fractional Rights would otherwise be issuable, at the
time such Rights are exercised as provided herein, an amount in cash equal to
the same fraction of the Current Market Value of a whole Right. For the
purposes of this Section 14(a), the Current Market Value of a whole
31
Right shall be the Closing Price per Right for the Trading Day immediately prior
to the date on which such fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of
Common Shares or Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share) upon exercise of Rights,
or to distribute certificates that represent fractional Common Shares or
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be represented by depositary receipts, pursuant to
an appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of Preferred Shares. If the
Company shall determine not to issue fractional Common Shares or Preferred
Shares (or depositary receipts in lieu of Preferred Shares), the Company
shall pay to the registered holders of Right Certificates with respect to
which such fractional Common Shares or Preferred Shares would otherwise be
issuable, at the time such Rights are exercised as provided herein, an amount
in cash equal to the same fraction of the Current Market Value of a whole
Common Share or Preferred Share, as the case may be. For purposes of this
Section 14(b), the Current Market Value of a whole Common Share or Preferred
Share shall be the Closing Price per share for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right, by the acceptance of such Right,
expressly waives such holder's right to receive any fractional Rights or any
fractional Common Shares or Preferred Shares upon exercise of such 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 given to the Rights
Agent under Section 18 hereof, are vested in the respective registered
holders of the Right Certificates and certificates for Common Shares
representing Rights, and any registered holder of any Right Certificate and
of such certificate for Common Shares, without the consent of the Rights
Agent or of the holder of any other Right Certificate or any other
certificate for Common Shares
32
may, on such holder's own behalf and for such holder's own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, such holder's right to
exercise the Rights represented by such Right Certificate or by such
certificate for Common Shares in the manner provided in such 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, and injunctive
relief against actual or threatened violations, of the obligations of any
Person under this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
represented by certificates for Common Shares registered in the name of the
holders of such Common Shares (which certificates for Common Shares shall
also constitute certificates for Rights), and each such Right shall be
transferable only in connection with the transfer of such Common Shares;
(b) after the Distribution Date, the Right Certificates
shall only be transferable on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate is registered as the absolute
owner thereof and of the Rights represented thereby (notwithstanding any
notations of ownership or writing on the Right Certificate by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to
the contrary.
Section 17. RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT
DEEMED A STOCKHOLDER. No holder, as such, of any Right or Right Certificate
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the securities of the Company that may at any time be
33
issuable upon the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right or Right Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, in each case until such Right or the Rights represented
by such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent as
compensation for all services rendered by it hereunder reasonable and
customary fees and expenses. 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.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares 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 believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice
of its counsel as set forth in Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it
34
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 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 Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and if at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in such Right 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 Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and if at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in such
Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders
of Right Certificates, by their acceptance of the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in accordance with
such advice or opinion.
35
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement, or in
the Right Certificates (except its countersignature thereof), or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming null and void pursuant to Section 7(d) or any adjustment in
the terms of the Rights including the manner, method or amount thereof)
provided for in Sections 7, 11, 13 and 23 hereof, or the ascertaining of the
existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights represented by Right Certificates
after actual notice that such change or adjustment is required)); nor shall
it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares or Common Shares
or other securities to be issued pursuant to this Agreement or any Right
Certificate,
36
or as to whether any Preferred Shares or Common Shares or other securities
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary or the 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 the 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 that reasonable care
was exercised in the selection and continued employment thereof.
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
37
transfer agent of Common Shares and Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of Common Shares
and Preferred Shares by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting as such, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit such holder's
Right Certificate for inspection by the Company), then the Company shall
become the Rights Agent and the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be a corporation organized and doing business under
the laws of the United States or of the State of New York or Colorado (or of
any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of New York
or Colorado), in good standing, having a principal office in New York or
Colorado, that is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal
or state authority and that has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose of this Agreement and so
that the successor Rights Agent may appropriately act as Rights Agent
hereunder. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of Common Shares and Preferred Shares, and mail
a notice thereof in writing to the registered holders of the Right
Certificates.
38
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Right
Certificates to the contrary, the Company may, at its option, issue new Right
Certificates in such form as may be approved by the Board of Directors in
order to reflect any adjustment or change in the Exercise Price and the
number or kind or class of shares or other securities or property purchasable
upon exercise of the Rights in accordance with the provisions of this
Agreement.
Section 23. REDEMPTION OF RIGHTS.
(a) Until the earliest of (i) the date of the first Section
11(a)(ii) Event, (ii) the date of the first Section 13(a) Event or (iii) the
Expiration Date, the Board of Directors of the Company may, at its option,
direct the Company to redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $.005 per Right, as such
redemption price shall be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (the
"Redemption Price"), and the Company shall so redeem the Rights.
(b) Immediately upon the action of the Board of Directors of
the Company directing the Company to redeem the Rights pursuant to subsection
(a) of this Section 23, or at such time and date thereafter as the Board of
Directors may specify for redemption of the Rights, and without any further
action and without any notice, the right to exercise Rights shall terminate
and the only right thereafter of the holders of Rights shall be to receive
the Redemption Price. Within 10 Business Days after the action of the Board
of Directors of the Company directing the Company to redeem the Rights
pursuant to subsection (a) of this Section 23, the Company shall give notice
of such redemption to the holders of Rights by mailing such notice to all
holders of Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, if prior to the Distribution Date, on the
registry books of each transfer agent for Common Shares. Any notice that is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives such notice, but neither the failure to give any
39
such notice nor any defect therein shall affect the legality or validity of
such redemption. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may, directly or indirectly, redeem,
acquire or purchase for value any Rights in any manner other than that
specifically set forth in this Section 23 or Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. CERTAIN CASH TENDER OFFERS.
(a) In the event that the Company shall receive a Cash
Tender Offer Proposal from any Prospective Offeror on any date upon which the
Rights may be redeemed by the Company pursuant to Section 23(a) hereof, a
majority of the Independent Directors shall, within 15 Business Days
thereafter, at their option, either (i) engage a nationally recognized
investment banking firm to render an opinion as to whether the price per
Voting Share in cash to be paid to the holders of Voting Shares pursuant to
such Cash Tender Offer Proposal is fair and adequate from a financial point
of view (the "Fairness Opinion"), which Fairness Opinion shall be delivered
to the Board of Directors within 20 Business Days after such engagement, or
(ii) call a special meeting of stockholders (the "Special Meeting") for the
purpose of voting on a precatory resolution requesting the Board of Directors
to accept such Cash Tender Offer Proposal as such Cash Tender Offer Proposal
may be amended or revised by such Prospective Offeror from time to time to
increase the price per Voting Share in cash to be paid to the holders of
Voting Shares (the "Resolution"). The Special Meeting, if any, shall be held
on a date selected by a majority of the Independent Directors, which date
shall be not less than 60 nor more than 120 days after the later of the date
such Cash Tender Offer Proposal is received by the Company (the "Proposal
Date") or the date of any previously scheduled meeting of stockholders to be
held within 60 days after the Proposal Date; provided, however, that if (x)
such other meeting shall have been called for the purpose of voting on a
precatory resolution with respect to another Cash Tender Offer Proposal and
(y) the Proposal Date shall be not later than 15 days after the date such
other Cash Tender Offer Proposal was received by the Company, then both the
Resolution and such other resolution shall be voted on at such meeting and
such meeting shall be deemed to be the Special Meeting. A majority of the
Independent Directors
40
shall set a date for determining the stockholders of record entitled to
notice of and to vote at the Special Meeting, if any, in accordance with the
Company's Restated Certificate of Incorporation and By-laws and with
applicable law. At the request of the Prospective Offeror, the Company shall
include in any proxy soliciting material prepared by it in connection with
the Special Meeting, if any, proxy soliciting material submitted by the
Prospective Offeror; PROVIDED, HOWEVER, that the Prospective Offeror shall by
written agreement with the Company, in form and substance satisfactory to the
Company, contained in or delivered with such request have indemnified the
Company against any and all liabilities resulting from any misstatements,
misleading statements and omissions contained in the Prospective Offeror's
proxy soliciting material, shall have agreed to pay the Company's incremental
costs incurred as a result of including such material in the Company's proxy
soliciting material and shall have advanced to the Company an amount equal to
the Company's estimate from time to time of such incremental costs.
(b) In the event that (x) the Fairness Opinion states that
the price per Voting Share to be paid in cash to the holders of Voting Shares
pursuant to the Cash Tender Offer Proposal is fair and adequate or (y) at the
Special Meeting the Resolution receives the affirmative vote of the majority
of the Voting Shares outstanding as of the record date of the Special Meeting
and not Beneficially Owned on such day by the Prospective Offeror or any of
its Affiliates or Associates, then, subject to Section 24(c) hereof, proper
provision shall be made in order that upon the consummation of any tender
offer (provided that such tender offer is consummated prior to the 60th day
following the date of such event, or prior to such later day upon which a
suspension of operation pursuant to Section 24(c) hereof shall terminate)
pursuant to which the Prospective Offeror offers to purchase and purchases
any and all of the Voting Shares held by Persons other than the Prospective
Offeror and its Affiliates and Associates at a price per Voting Share in cash
equal to or greater than the price per Voting Share provided in the Cash
Tender Offer Proposal (a "Fair Offer"), (i) the Voting Shares acquired by the
Prospective Offeror and its Affiliates and Associates pursuant to such tender
offer shall not be taken into account in determining whether such Persons have
or have not become 20% Stockholders and (ii) neither the commencement of, nor
the first public announcement of the intent of the Prospective Offeror to
commence, such tender offer shall be taken into account in
41
determining whether the Distribution Date has or has not occurred. The
redemption of Rights pursuant to this Section 24 shall not in any way affect
the exercisability of such Rights prior to the effective time of such
redemption.
(c) Notwithstanding Section 24(b) hereof, in the event that
a majority of the Independent Directors determine that such action is in the
best interests of the stockholders of the Company other than the Prospective
Offeror, they may, at any time prior to the consummation of the tender offer
referred to in the first sentence of Section 24(b) hereof, suspend the
operation of clauses (i) and (ii) in such sentence for a period of time not
to exceed 180 days, such suspension to be effective upon the date of the
first public announcement thereof.
(d) Nothing contained in this Section 24 shall be deemed to
be in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any Cash Tender Offer Proposal, to
recommend that holders of Voting Shares reject any Cash Tender Offer
Proposal, or to take any other action (including, without limitation, the
commencement, prosecution, defense or settlement of any litigation or the
submission of additional or alternative Cash Tender Offer Proposals or other
proposals to the Special Meeting) with respect to any Cash Tender Offer
Proposal or any tender offer that the Board of Directors believes is
necessary or appropriate in the exercise of such fiduciary duty.
(e) Nothing contained in this Section 24 shall be construed
as limiting or prohibiting the Company or any Prospective Offeror from
proposing or engaging in any acquisition, disposition or other transfer of
any securities of the Company, any merger or consolidation involving the
Company, any sale or other transfer of assets of the Company, any
liquidation, dissolution or winding up of the Company, any other business
combination or other transaction, or any other action; PROVIDED, HOWEVER,
that the holders of Rights shall have the rights set forth in this Agreement
with respect to any such acquisition, disposition, transfer, merger,
consolidation, sale, liquidation, dissolution, winding up, business
combination, transaction or other action.
42
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In the event that the Company shall propose (i) to
declare or pay any dividend payable on or make any distribution with respect
to its Common Shares or Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Common Shares or Preferred
Shares options, rights or warrants to subscribe for or to purchase any
additional shares thereof or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Common Shares or Preferred Shares (other than a reclassification involving
only the subdivision of outstanding shares), (iv) to effect any consolidation
or merger with or into, 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
or more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person or
Persons, or (v) to effect the liquidation, dissolution or winding up of the
Company, then and in each such case, the Company shall give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action that shall specify the record date for the purpose of such
dividend or distribution, or the date upon 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
record of the Common Shares or Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the Common Shares or Preferred Shares for purposes of
such action and, in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares or Preferred
Shares, whichever date shall be the earlier. The failure to give the notice
required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
(b) Upon the occurrence of each Section 11(a)(ii) Event and
each Section 13(a) Event, the Company shall as soon as practicable thereafter
give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, specifying
43
the event and the consequences of the event to holders of Rights under
Sections 11 and 13 hereof.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
U S WEST, Inc.
7800 East Orchard Road
Englewood, CO 80111
Attention: General Counsel and Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) to the
principal office of the Rights Agent as follows:
State Street Bank and Trust
Company
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS.
(a) Until the earliest of (i) the date of the first Section
11(a)(ii) Event, (ii) the date of the first Section 13(a) Event, (iii) the
Redemption Date or (iv) the Expiration Date, the Board of Directors of the
Company may, without the approval of any holders of Rights, direct the
Company and the Rights Agent to supplement or amend any provision of this
Agreement in any manner, whether or not such supplement or amendment is
adverse to any holders of Rights, and the Company and the Rights Agent shall
so supplement or amend such provision. Prior to the earlier of
44
the Redemption Date or the Expiration Date, the Board of Directors of the
Company may, without the approval of any holders of Rights, direct the
Company and the Rights Agent to supplement or amend any provision of this
Agreement in any manner so long as the interests of the holders of Rights
shall not be materially and adversely affected thereby, and the Company and
the Rights Agent shall so supplement or amend such provision. The Rights
Agent may, but shall not be obligated to, enter into any supplement or
amendment which materially affects its own rights, duties and immunities
under this Agreement.
(b) After the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event and prior to the earlier
of the Redemption Date or the Expiration Date, the Company shall not effect
any amendment to the Certificate of Designations for the Preferred Shares
that would materially and adversely affect the rights, privileges or
preferences of the Preferred Shares without the prior approval of the holders
of two-thirds or more of the then outstanding Rights.
Section 28. CERTAIN COVENANTS.
Subject to Section 27 and the other provisions of this Agreement:
(a) no adjustment to the Exercise Price, the number of Preferred
Shares or Common Shares or other securities (or fractions of a share of any
of them), as the case may be, for which a Right is exercisable or the number
of Rights outstanding shall be made or be effective if such adjustment would
have the effect of reducing or limiting the benefits that the holders of
Rights would have had absent such adjustment, including, without limitation,
the benefits under Sections 7, 11 and 13 hereof, unless the terms of this
Agreement are amended so as to preserve such benefits; and
(b) from and after the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date, the Company shall not
(i) issue or sell, or permit any Subsidiary to issue or sell, to a 20%
Stockholder or a Surviving Person, or any Affiliate or Associate of a 20%
Stockholder or a Surviving Person, or any Person holding Voting Shares of the
Company that are Beneficially Owned by a 20% Stockholder or a Surviving
Person, (A) any rights, options, warrants or
45
convertible securities on terms similar to, or that materially adversely
affect the value of, the Rights or (B) Preferred Shares, Common Shares or
shares of any other class of capital stock, if such sale is intended to or
would materially adversely affect the value of the Rights, or (ii) take any
action that is intended to or would materially adversely affect the value of
the Rights.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement)
and (iii) calculate from time to time the relative voting power of the
Communications Shares and the Media Shares, in accordance with the Company's
Restated Certificate of Incorporation. 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 of Directors 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 of Directors to any liability to
the holders of the Rights.
Section 30. 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 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent, the registered holders of the Right Certificates (other than those
representing Rights that have become null and void) and the certificates for
Common Shares representing Rights (other than those Rights that have become
null and void) any legal or equitable right, remedy or claim under this
Agreement, and this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent, such registered
46
holders of Right Certificates and such certificates for Common Shares
representing Rights.
Section 32. 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.
Section 33. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts
made and performed entirely within such state.
Section 34. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each such counterpart shall for all purposes be
deemed to be an original and all such counterparts shall together constitute
but one and the same instrument.
Section 35. DESCRIPTIVE HEADINGS. Descriptive headings of the
several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 36. EFFECTIVENESS. This Agreement shall become effective
at the Effective Time of the Merger under the Merger Agreement. In the event
the Merger does not occur or become effective for any reason, this Agreement
shall be deemed null and void.
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
Attest: U S WEST, INC.
By ______________________ By ______________________
Name: Name:
Title: Title:
Attest: STATE STREET BANK AND
TRUST COMPANY
By ______________________ By ______________________
Name: Name:
Title: Title:
48
EXHIBIT A-1
There is hereby created a series of Preferred Stock having the
following voting powers, preferences and rights, and qualifications and
restrictions thereon:
Section 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as Series A Junior Participating Cumulative Preferred
Stock, par value $1.00 per share (the "Series A Preferred Stock"), and the
number of shares constituting such series shall be 10,000,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of Series A Preferred Stock, in
preference to the holders of shares of Communications Stock and Media Stock
and any other junior stock of the Corporation that may be outstanding,
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 tenth day of January, April, July and October in each
year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $25 per share ($100 per annum), or (ii) subject to the
provision for adjustment set forth in this paragraph (a), the product of the
Communications Number (as hereinafter defined) multiplied by the aggregate per
share amount of all cash dividends and all non-cash dividends or other
distributions, other than a dividend payable in shares of Communications
Stock or a subdivision of the outstanding shares of Communications Stock (by
reclassification or otherwise), declared on the Communications Stock since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock.
As used herein, the Communications Number shall initially be 56. In the
event that the Corporation shall at any time declare or pay any dividend on
Communications Stock payable in shares of Communications Stock or effect a
subdivision or combination or consolidation of the outstanding shares
of Communications Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Communications Stock, then and in each such event,
the Communications Number shall be adjusted by multiplying such number by the
fraction, the numerator of which is the number of shares of Communications
Stock outstanding immediately after such event, and the denominator of which
is the number of shares of Communications Stock that were outstanding
immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the
Communications Stock (other than a dividend payable in shares of
Communications Stock); PROVIDED, HOWEVER, that in the event no dividend or
distribution shall have been declared on the Communications Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $25 per share ($100 per annum)
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless (i) 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 (ii) the date of issue of such shares is after the record date for
the determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and on or prior to the next succeeding Quarterly
Dividend Payment Date, in which case such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall cumulate but shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be
2
not more than 60 days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to
a number of votes equal to the product of (i) the Communications Number then
in effect for each share of Series A Preferred Stock held of record on each
matter on which holders of Communications Stock are entitled to vote
multiplied by (ii) the maximum number of votes per share of Communications
Stock at such time with respect to such matter.
(b) Except as otherwise provided in the certificate of incorporation
of the Corporation or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Communications Stock and Media Stock shall vote
together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(c) In addition, the holders of shares of Series A Preferred
Stock shall have the following special voting rights: In the event that at
any time dividends on Series A Preferred Stock, whenever accrued and whether
or not consecutive, shall not have been paid or declared and a sum sufficient
for the payment thereof set aside, in an amount equivalent to six quarterly
dividends on all shares of Series A Preferred Stock at the time outstanding,
then and in each such event, the holders of shares of Series A Preferred
Stock and each other class or series of stock now or hereafter issued that
shall be accorded such class voting right (including, without limitation, the
Series B Junior Participating Cumulative Preferred Stock of the Corporation)
(each such other class or series being hereinafter called an "Other Series of
Preferred Stock"), voting together as a separate class, shall be entitled to
elect three directors at the next annual meeting of stockholders of the
Corporation, in addition to the directors to be elected by the holders of all
shares of the Corporation entitled to vote for the election of directors, and
the holders of all shares (including the Series A Preferred Stock) otherwise
entitled to vote for directors, voting separately as a class, shall be
entitled to elect the remaining members of the Board of Directors, provided
that the Series A Preferred
3
Stock, voting as a separate class together with each Other Series of
Preferred Stock, shall not have the right to elect more than three directors.
Such special voting right of the holders of shares of Series A Preferred
Stock may be exercised until all dividends in default on the Series A
Preferred Stock shall have been paid in full, or declared and funds sufficient
therefor set aside, and, when so paid or provided for, such special voting
right of the holders of shares of Series A Preferred Stock shall cease, but
subject always to the same provisions for the vesting of such special voting
rights in the event of any future dividend default or defaults giving rise to
such special voting rights. At any time after such special voting rights
shall have so vested in the holders of shares of Series A Preferred Stock,
the Secretary of the Corporation may, and upon the written request of the
holders of record of 10% or more in number of shares of Series A Preferred
Stock and each Other Series of Preferred Stock then outstanding addressed to
the Secretary at the principal executive office of the Corporation shall,
call a special meeting of the holders of shares of Preferred Stock so
entitled to vote, for the election of the directors to be elected by them as
provided in this paragraph (c), to be held within 60 days after such call and
at the place and upon the notice provided by law and in the Bylaws for the
holding of meetings of stockholders; PROVIDED, HOWEVER, that the Secretary
shall not be required to call such special meeting in the case of any such
request received less than 90 days before the date fixed for any annual
meeting of stockholders, in which case the holders of shares of Preferred
Stock so entitled to vote shall be entitled to exercise the special voting
rights provided in this paragraph at such annual meeting. If any such
special meeting required to be called as provided in this paragraph (c) shall
not be called by the Secretary within 30 days after receipt of any such
request, then the holders of record of 10% or more in number of shares of
Series A Preferred Stock and each Other Series of Preferred Stock then
outstanding may designate in writing one of their number to call such
meeting, and the person so designated may, at the expense of the Corporation,
call such meeting to be held at the place and upon the notice given by such
person, and for that purpose shall have access to the stock books of the
Corporation, but no such special meeting and no adjournment thereof shall be
held on a date later than 60 days before the annual meeting of stockholders.
If, at any meeting so called or at any annual meeting held while the holders
of shares of Series A Preferred Stock have the special voting rights provided
for in this paragraph (c), the holders of not
4
less than 40% of the shares of Series A Preferred Stock and each Other Series
of Preferred Stock then outstanding are present in person or by proxy, which
percentage shall be sufficient to constitute a quorum for the selection of
additional directors as provided in this paragraph (c), the then authorized
number of directors of the Corporation shall be increased by three, as of the
time of such special meeting or the time of the first such annual meeting
held while such holders have special voting rights and such quorum is
present, and the holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock, voting together as a separate class, shall be
entitled to elect the additional directors so provided for. If the directors
of the Corporation are then divided into classes under provisions of the
certificate of incorporation or the By-laws of the Corporation, the three
additional directors shall be divided among the classes of directors, insofar
as practicable, so that an additional director is added to each such class.
If the foregoing expansion of the size of the Board of Directors shall not be
valid under applicable law, then the holders of shares of Series A Preferred
Stock and of each Other Series of Preferred Stock, voting together as a
separate class, shall be entitled, at the meeting of stockholders at which
they would otherwise have voted, to elect directors to fill any then existing
vacancies on the Board of Directors, and shall additionally be entitled, at
such meeting and each subsequent meeting of stockholders at which directors
are elected, to elect all of the directors then being elected until by such
vote three members of the Board of Directors have been so elected. Upon the
election at such meeting by the holders of shares of Series A Preferred Stock
and each Other Series of Preferred Stock, voting together as a separate
class, of the directors they are entitled so to elect, the persons so
elected, together with such persons as may be directors or as may have been
elected as directors by the holders of all shares (including Series A
Preferred Stock) otherwise entitled to vote for directors, shall constitute
the duly elected directors of the Corporation. The additional directors so
elected by holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock, voting together as a separate class, shall serve
until the next annual meeting and until their respective successors shall be
elected and qualified or, if any such director is a member of a class of
directors under provisions dividing the directors into classes, each such
director shall serve until the annual meeting at which the term of office of
such director's class shall expire and until such director's successor shall
be elected and shall qualify, and at each subsequent meeting of
5
stockholders at which the directorship of any director elected by the vote
of holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock under the special voting rights set forth in this paragraph
is up for election, said special voting rights shall apply in the
reelection of such director or in the election of such director's successor;
PROVIDED, HOWEVER, that, whenever the holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock shall be divested of the
special rights to elect three directors as provided by this paragraph (c),
the terms of office of all persons elected as directors by the holders of
shares of Series A Preferred Stock and each Other Series of Preferred Stock,
voting together as a separate class, or elected to fill any vacancies
resulting from the death, resignation, or removal of directors so elected by
the holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock shall forthwith terminate (and, if applicable, the number of
directors shall be reduced accordingly). If, at any time after a special
meeting of stockholders or an annual meeting of stockholders at which the
holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock, voting together as a separate class, have elected directors
as provided by this paragraph (c), and while the holders of shares of Series
A Preferred Stock and each Other Series of Preferred Stock shall be entitled
so to elect three directors, the number of directors who have been elected by
the holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock (or who by reason of one or more resignations, deaths or
removals have succeeded any directors so elected) shall by reason of
resignation, death or removal be less than three but at least one, the
vacancy in the Board of Directors so created may be filled by the remaining
director elected by such holders, and in the event that such election shall
not occur within 30 days after such vacancy arises, or in the event that
there shall not be incumbent at least one director so elected by such
holders, the Secretary of the Corporation may, and upon the written request
of the holders of record of 10% or more in number of the shares of Series A
Preferred Stock and each Other Series of Preferred Stock then outstanding
addressed to the Secretary at the principal office of the Corporation shall,
call a special meeting of the holders of shares of Series A Preferred Stock
and each Other Series of Preferred Stock so entitled to vote, for an election
to fill such vacancy or vacancies, to be held within 60 days after such call
and at the place and upon the notice provided by law and in the
6
Bylaws for the holding of meetings of stockholders; PROVIDED, HOWEVER,
that, the Secretary shall not be required to call such special meeting in the
case of any such request received less than 90 days before the date fixed for
any annual meeting of stockholders, in which case the holders of shares of
Preferred Stock so entitled to vote shall be entitled to fill such vacancy or
vacancies at such annual meeting. If any such special meeting required to be
called as provided by this paragraph (c) shall not be called by the Secretary
within 30 days after receipt of any such request, then the holders of record
of 10% or more in number of the shares of Series A Preferred Stock and each
Other Series of Preferred Stock then outstanding may designate in writing one
of their number to call such meeting, and the person so designated may, at
the expense of the Corporation, call such meeting to be held at the place and
upon the notice above provided, and for that purpose shall have access to the
stock books of the Corporation, but no such special meeting and no
adjournment thereof shall be held on a date later than 60 days before the
annual meeting of stockholders.
(d) Nothing contained herein shall prevent the Board of Directors
or stockholders from taking any action to increase the number of authorized
shares of Series A Preferred Stock, or increasing the number of authorized
shares of Preferred Stock of the same class as the Series A Preferred Stock
or the number of authorized shares of Communications Stock or Media Stock, or
changing the par value of the Communications Stock, Media Stock or Preferred
Stock, or issuing options, warrants or rights to any class of stock of the
Corporation, as may be authorized by the certificate of incorporation of the
Corporation.
(e) Except as set forth herein, holders of shares of Series A
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote as set forth
in the certificate of incorporation of the Corporation or by law) for the
taking of any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever any dividends or other distributions payable on the
Series A Preferred Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Preferred
7
Stock outstanding shall have been paid in full, the Corporation shall not,
and shall cause its subsidiaries not to, directly or indirectly:
(i) declare or pay dividends on, or make any other distributions
with respect to, any shares of stock ranking junior (either as to
dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions
with respect to, any shares of stock ranking on a parity (either as to
dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) with the Series A Preferred Stock, except
dividends paid ratably on shares of the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears, in
proportion to the total amounts of such dividends to which the holders
of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or to
distributions upon liquidation or dissolution and winding-up of the
Corporation) with the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or to distributions
upon dissolution or liquidation and winding-up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(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
8
(a) of this Section 4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall, upon their cancellation, become authorized
but unissued shares of preferred stock, without designation as to series, and
may be reissued as part of any series of preferred stock created by
resolution or resolutions of the Board of Directors (including additional
shares of Series A Preferred Stock), subject to the conditions and
restrictions on issuance set forth in the certificate of incorporation of the
Corporation.
Section 6. LIQUIDATION OR DISSOLUTION AND WINDING-UP. Upon any
liquidation or dissolution and winding-up of the Corporation, no distribution
shall be made to:
(a) the holders of shares of stock ranking junior (either as to
dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall
have received the greater of (i) $100 per share ($1.00 per one
one-hundredth of a share), plus an amount equal to all accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) an aggregate amount per share,
subject to the provision for adjustment set forth in paragraph (a)
of Section 2, equal to the product of (i) the Communications Number
then in effect multiplied by (ii) the aggregate amount to be distributed
in connection with such liquidation or dissolution and winding-up per
share to holders of shares of Communications Stock; or
(b) the holders of shares of stock ranking on a parity (either as to
dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation or dissolution and
winding-up.
Section 7. CONSOLIDATION, MERGER, ETC. In the event that the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Communications Stock are exchanged for or
changed into other stock or securities, cash and/or any
9
other property, or otherwise changed, then, and in each such event, the
shares of Series A Preferred Stock shall at the same time be similarly
exchanged for an amount per share (subject to the provision for adjustment
set forth in paragraph (a) of Section 2) equal to the product of (i) the
Communications Number then in effect multiplied by (ii) the aggregate amount
of stock, securities, cash or any other property (payable in kind), as the
case may be, into which or for which each share of Communications Stock is
changed or exchanged.
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable. Notwithstanding the foregoing, the Corporation may
acquire shares of Series A Preferred Stock in any other manner permitted by
law or the certificate of incorporation of the Corporation.
Section 9. RANK. Unless otherwise provided in the certificate of
incorporation of the Corporation or a Certificate of Designations relating to
a series of preferred stock of the Corporation established after the issuance
of any shares of the Series A Preferred Stock or any right, warrant or option
providing for the issuance thereof, the Series A Preferred Stock shall rank,
as to the payment of dividends and the distribution of assets on liquidation
or dissolution and winding-up of the Corporation, pari passu to the Series B
Junior Participating Cumulative Preferred Stock, par value $1.00 per share,
and the Series C Cumulative Redeemable Preferred Stock, par value $1.00 per
share, of the Corporation, junior to all other series of the Corporation's
Preferred Stock and senior to the Communications Stock and Media Stock.
Section 10. AMENDMENT. The certificate of incorporation of the
Corporation shall not be amended in any manner that would materially and
adversely alter or change the powers, preferences or special rights of the
Series A Preferred Stock without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single series.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractions of a share (in one one-hundredths (1/100) of a share and
integral multiples thereof) that shall entitle the holder thereof, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and have the benefit of all
other rights of holders of shares of Series A Preferred Stock.
10
EXHIBIT A-2
-----------
There is hereby created a series of Preferred Stock having the
following voting powers, preferences and rights, and qualifications and
restrictions thereon:
Section 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as Series B Junior Participating Cumulative Preferred
Stock, par value $1.00 per share (the "Series B Preferred Stock"), and the
number of shares constituting such series shall be 10,000,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of Series B Preferred Stock, in
preference to the holders of shares of Communications Stock and Media Stock and
any other junior stock of the Corporation that may be outstanding, 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 tenth day of January, April, July and October 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 B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) $25 per share ($100
per annum), or (ii) subject to the provision for adjustment set forth in this
paragraph (a), the product of the Media Number (as hereinafter defined)
multiplied by the aggregate per share amount of all cash dividends and all
non-cash dividends or other distributions, other than a dividend payable in
shares of Media Stock or a subdivision of the outstanding shares of Media Stock
(by reclassification or otherwise), declared on the Media 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 B Preferred Stock.
As used herein, the Media Number shall initially be 44. In the event
that the Corporation shall at any time declare or pay any dividend on
Media Stock payable in shares of Media Stock or effect a subdivision or
combination or consolidation of the outstanding shares of Media Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Media Stock, then and in each such event, the Media Number shall be adjusted
by multiplying such number by the fraction, the numerator of which is the
number of shares of Media Stock outstanding immediately after such event and
the denominator of which is the number of shares of Media Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
the Series B Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Media Stock
(other than a dividend payable in shares of Media Stock); PROVIDED, HOWEVER,
that, in the event no dividend or distribution shall have been declared on the
Media Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $25 per
share ($100 per annum) on the Series B 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 B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series B
Preferred Stock, unless (i) 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 (ii) the date of issue of such shares is after the record date for
the determination of holders of shares of Series B Preferred Stock entitled
to receive a quarterly dividend and on or prior to the next succeeding
Quarterly Dividend Payment Date, in which case such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall cumulate but shall not bear interest. Dividends
paid on the shares of Series B 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 B Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to the date fixed for the
payment thereof.
2
Section 3. VOTING RIGHTS. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(a) Each holder of Series B Preferred Stock shall be entitled to
a number of votes equal to the product of (i) the Media Number then in effect
for each share of Series B Preferred Stock held of record on each matter on
which holders of Media Stock are entitled to vote multiplied by (ii) the
maximum number of votes per share of Media Stock at such time with respect to
such matter.
(b) Except as otherwise provided in the certificate of
incorporation of the Corporation or by law, the holders of shares of Series B
Preferred Stock and the holders of shares of Communications Stock and Media
Stock shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(c) In addition, the holders of shares of Series B Preferred
Stock shall have the following special voting rights: In the event that at
any time dividends on Series B Preferred Stock, whenever accrued and whether
or not consecutive, shall not have been paid, or declared and a sum
sufficient for the payment thereof set aside, in an amount equivalent to six
quarterly dividends on all shares of Series B Preferred Stock at the time
outstanding, then and in each such event, the holders of shares of Series B
Preferred Stock and each other class or series of stock now or hereafter
issued that shall be accorded such class voting right (including, without
limitation, the Series A Junior Participating Cumulative Preferred Stock of
the Corporation) (each such other class or series being hereinafter called an
"Other Series of Preferred Stock"), voting together as a separate class,
shall be entitled to elect three directors at the next annual meeting of
stockholders of the Corporation, in addition to the directors to be elected
by the holders of all shares of the Corporation entitled to vote for the
election of directors, and the holders of all shares (including the Series B
Preferred Stock) otherwise entitled to vote for directors, voting separately
as a class, shall be entitled to elect the remaining members of the Board of
Directors, provided that the Series B Preferred Stock, voting as a separate
class together with each Other Series of Preferred Stock, shall not have the
right to elect more than three directors. Such special voting right of the
holders of shares of Series B Preferred Stock may be exercised until
3
all dividends in default on the Series B Preferred Stock shall have been paid
in full, or declared and funds sufficient therefor set aside, and, when so paid
or provided for, such special voting right of the holders of shares of Series
B Preferred Stock shall cease, but subject always to the same provisions for
the vesting of such special voting rights in the event of any future
dividend default or defaults giving rise to such special voting rights. At any
time after such special voting rights shall have so vested in the holders of
shares of Series B Preferred Stock, the Secretary of the Corporation may, and
upon the written request of the holders of record of 10% or more in number of
shares of Series B Preferred Stock and each Other Series of Preferred Stock
then outstanding addressed to the Secretary at the principal executive office
of the Corporation shall, call a special meeting of the holders of shares of
Preferred Stock so entitled to vote, for the election of the directors to be
elected by them as provided in this paragraph (c), to be held within 60 days
after such call and at the place and upon the notice provided by law and in the
Bylaws for the holding of meetings of stockholders; PROVIDED, HOWEVER, that, the
Secretary shall not be required to call such special meeting in the case of
any such request received less than 90 days before the date fixed for any
annual meeting of stockholders, in which case the holders of shares of Preferred
Stock so entitled to vote shall be entitled to exercise the special voting
rights provided in this paragraph at such annual meeting. If any such special
meeting required to be called as provided in this paragraph (c) shall not be
called by the Secretary within 30 days after receipt of any such request, then
the holders of record of 10% or more in number of shares of Series B Preferred
Stock and each Other Series of Preferred Stock then outstanding may designate
in writing one of their number to call such meeting, and the person so
designated may, at the expense of the Corporation, call such meeting to be held
at the place and upon the notice given by such person, and for that purpose
shall have access to the stock books of the Corporation, but no such special
meeting and no adjournment thereof shall be held on a date later than 60 days
before the annual meeting of stockholders. If, at any meeting so called or at
any annual meeting held while the holders of shares of Series B Preferred Stock
have the special voting rights provided for in this paragraph (c), the holders
of not less than 40% of the shares of Series B Preferred Stock and each Other
Series of Preferred Stock then outstanding are present in person or by proxy,
which percentage shall be sufficient to constitute a quorum for the selection of
4
additional directors as provided in this paragraph (c), the then authorized
number of directors of the Corporation shall be increased by three, as of the
time of such special meeting or the time of the first such annual meeting held
while such holders have special voting rights and such quorum is present, and
the holders of shares of Series B Preferred Stock and each Other Series of
Preferred Stock, voting together as a separate class, shall be entitled to elect
the additional directors so provided for. If the directors of the Corporation
are then divided into classes under provisions of the certificate of
incorporation or the By-laws of the Corporation, the three additional
directors shall be divided among the classes of directors, insofar as
practicable, so that an additional director is added to each such class. If
the foregoing expansion of the size of the Board of Directors
shall not be valid under applicable law, then the holders of shares of Series
B Preferred Stock and of each Other Series of Preferred Stock, voting
together as a separate class, shall be entitled, at the meeting of stockholders
at which they would otherwise have voted, to elect directors to fill any then
existing vacancies on the Board of Directors, and shall additionally be
entitled, at such meeting and each subsequent meeting of stockholders at which
directors are elected, to elect all of the directors then being elected until
by such vote three members of the Board of Directors have been so elected. Upon
the election at such meeting by the holders of shares of Series B Preferred
Stock and each Other Series of Preferred Stock, voting together as a separate
class, of the directors they are entitled so to elect, the persons so elected,
together with such persons as may be directors or as may have been elected as
directors by the holders of all shares (including Series B Preferred Stock)
otherwise entitled to vote for directors, shall constitute the duly elected
directors of the Corporation. The additional directors so elected by holders
of shares of Series B Preferred Stock and each Other Series of Preferred Stock,
voting together as a separate class, shall serve until the next annual meeting
and until their respective successors shall be elected and qualified or, if any
such director is a member of a class of directors under provisions dividing the
directors into classes, each such director shall serve until the annual meeting
at which the term of office of such director's class shall expire and until such
director's successor shall be elected and shall qualify, and at each subsequent
meeting of stockholders at which the directorship of any director elected by the
vote of holders of shares of Series B Preferred Stock and each Other Series of
Preferred Stock under the special voting rights set forth in this paragraph
5
is up for election, said special voting rights shall apply in the
reelection of such director or in the election of such director's successor;
PROVIDED, HOWEVER, that, whenever the holders of shares of Series B Preferred
Stock and each Other Series of Preferred Stock shall be divested of the
special rights to elect three directors as provided by this paragraph (c), the
terms of office of all persons elected as directors by the holders of shares of
Series B Preferred Stock and each Other Series of Preferred Stock, voting
together as a separate class, or elected to fill any vacancies resulting from
the death, resignation, or removal of directors so elected by the holders of
shares of Series B Preferred Stock and each Other Series of Preferred Stock
shall forthwith terminate (and, if applicable, the number of directors shall be
reduced accordingly). If, at any time after a special meeting of
stockholders or an annual meeting of stockholders at which the holders of
shares of Series B Preferred Stock and each Other Series of Preferred Stock,
voting together as a separate class, have elected directors as provided by
this paragraph (c), and while the holders of shares of Series B Preferred
Stock and each Other Series of Preferred Stock shall be entitled so to elect
three directors, the number of directors who have been elected by the holders
of shares of Series B Preferred Stock and each Other Series of Preferred Stock
(or who by reason of one or more resignations, deaths or removals have
succeeded any directors so elected) shall by reason of resignation, death or
removal be less than three but at least one, the vacancy in the Board of
Directors so created may be filled by the remaining director elected by such
holders, and in the event that such election shall not occur within 30 days
after such vacancy arises, or in the event that there shall not be incumbent
at least one director so elected by such holders, the Secretary of the
Corporation may, and upon the written request of the holders of record of 10%
or more in number of the shares of Series B Preferred Stock and each Other
Series of Preferred Stock then outstanding addressed to the Secretary at the
principal office of the Corporation shall, call a special meeting of the
holders of shares of Series B Preferred Stock and each Other Series of
Preferred Stock so entitled to vote, for an election to fill such vacancy or
vacancies, to be held within 60 days after such call and at the place and upon
the notice provided by law and in the Bylaws for the holding of meetings of
stockholders; PROVIDED, HOWEVER, that, the Secretary shall not be required to
call such special meeting in the case of any such request received less than
90 days before the date fixed for any
6
annual meeting of stockholders, in which case the holders of shares of Preferred
Stock so entitled to vote shall be entitled to fill such vacancy or vacancies at
such annual meeting. If any such special meeting required to be called as
provided by this paragraph (c) shall not be called by the Secretary within 30
days after receipt of any such request, then the holders of record of 10% or
more in number of the shares of Series B Preferred Stock and each Other Series
of Preferred Stock then outstanding may designate in writing one of their number
to call such meeting, and the person so designated may, at the expense of the
Corporation, call such meeting to be held at the place and upon the notice above
provided, and for that purpose shall have access to the stock books of the
Corporation, but no such special meeting and no adjournment thereof shall be
held on a date later than 60 days before the annual meeting of stockholders.
(d) Nothing contained herein shall prevent the Board of Directors or
stockholders from taking any action to increase the number of authorized shares
of Series B Preferred Stock, or increasing the number of authorized shares of
Preferred Stock of the same class as the Series B Preferred Stock or the number
of authorized shares of Communications Stock or Media Stock, or changing the par
value of the Communications Stock, Media Stock or Preferred Stock, or issuing
options, warrants or rights to any class of stock of the Corporation, as
may be authorized by the certificate of incorporation of the Corporation.
be amended.
(e) Except as set forth herein, holders of shares of Series B
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote as set forth
in the certificate of incorporation of the Corporation or by law) for the taking
of any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever any dividends or other distributions payable on the
Series B Preferred Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series B Preferred Stock outstanding
shall have been paid in full, the Corporation shall not, and shall cause its
subsidiaries not to, directly or indirectly:
7
(i) declare or pay dividends on, or make any other distributions
with respect to, any shares of stock ranking junior (either as to
dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) to the Series B Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions
with respect to, any shares of stock ranking on a parity (either as to
dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) with the Series B Preferred Stock, except
dividends paid ratably on shares of the Series B Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts of such dividends to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or to
distributions upon liquidation or dissolution and winding-up of the
Corporation) with the Series B Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or to distributions
upon dissolution or liquidation and winding-up) to the Series B
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series B Preferred Stock, or any shares of stock ranking on a parity
with the Series B 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.
8
Section 5. REACQUIRED SHARES. Any shares of Series B 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, without designation as to series, and
may be reissued as part of any series of preferred stock created by
resolution or resolutions of the Board of Directors (including additional
shares of Series B Preferred Stock), subject to the conditions and
restrictions on issuance set forth in the certificate of incorporation of the
Corporation.
Section 6. LIQUIDATION OR DISSOLUTION AND WINDING-UP. Upon any
liquidation or dissolution and winding-up of the Corporation, no distribution
shall be made to:
(a) the holders of shares of stock ranking junior (either as to
dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall
have received the greater of (i) $100 per share ($1.00 per one
one-hundredth of a share), plus an amount equal to all accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) an aggregate amount per share,
subject to the provision for adjustment set forth in paragraph (a)
of Section 2, equal to the product of (i) the Media Number then in
effect multiplied by (ii) the aggregate amount to be distributed in
connection with such liquidation or dissolution and winding-up per
share to holders of shares of Media Stock; or
(b) the holders of shares of stock ranking on a parity (either as
to dividends or to distributions upon liquidation or dissolution and
winding-up of the Corporation) with the Series B Preferred Stock, except
distributions made ratably on the Series B Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation or dissolution and
winding-up.
Section 7. CONSOLIDATION, MERGER, ETC. In the event that the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Media Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, or otherwise
changed, then, and in each such event, the shares of Series B Preferred Stock
shall at the same time be similarly exchanged for an amount per
9
share (subject to the provision for adjustment set forth in paragraph (a) or
Section 2) equal to the product of (i) the Media Number then in effect
multiplied by (ii) the aggregate amount of stock, securities, cash or any
other property (payable in kind), as the case may be, into which or for which
each share of Media Stock is changed or exchanged.
Section 8. NO REDEMPTION. The shares of Series B Preferred Stock
shall not be redeemable. Notwithstanding the foregoing, the Corporation may
acquire shares of Series B Preferred Stock in any other manner permitted by
law or the certificate of incorporation of the Corporation.
Section 9. RANK. Unless otherwise provided in the certificate of
incorporation of the Corporation or a Certificate of Designations relating to
a series of preferred stock of the Corporation established after the issuance
of any shares of the Series B Preferred Stock or any right, warrant or option
providing for the issuance thereof, the Series B Preferred Stock shall rank,
as to the payment of dividends and the distribution of assets on liquidation
or dissolution and winding-up of the Corporation, pari passu to the Series A
Junior Participating Cumulative Preferred Stock, par value $1.00 per share,
and the Series C Cumulative Redeemable Preferred Stock, par value $1.00 per
share, of the Corporation, junior to all other series of the Corporation's
Preferred Stock and senior to the Communications Stock and Media Stock.
Section 10. AMENDMENT. This certificate of incorporation of the
Corporation shall not be amended in any manner that would materially and
adversely alter or change the powers, preferences or special rights of the
Series B Preferred Stock without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series B Preferred Stock,
voting together as a single series.
Section 11. FRACTIONAL SHARES. Series B Preferred Stock may be
issued in fractions of a share (in one one-hundredths (1/100) of a share and
integral multiples thereof) that shall entitle the holder thereof, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and have the benefit of all
other rights of holders of shares of Series B Preferred Stock.
10
Exhibit B-1
-----------
FORM OF
COMMUNICATIONS RIGHT CERTIFICATE
Certificate No. CR-____ _____ Rights
NOT EXERCISABLE AFTER APRIL 6, 1999 OR EARLIER IF REDEEMED. THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $.005 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED
IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY CERTAIN PERSONS
OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
U S WEST Communications Group Right Certificate
U S WEST, 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 and conditions
of the Amended and Restated Rights Agreement (the "Rights Agreement") dated
as of __________, 1995 by and between U S WEST, Inc., a Delaware corporation
(the "Company"), and State Street Bank and Trust Company (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 o'clock p.m.,
Englewood, Colorado time, on the earlier of the Redemption Date (as such term
is defined in the Rights Agreement) or April 6, 1999, at the office or agency
of the Rights Agent in Boston, Massachusetts, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid and
nonassessable share of Series A Junior Participating Cumulative Preferred
Stock, par value $1.00 per share, of the Company (a "Preferred Share") or, in
certain circumstances, other securities or other property, at a purchase
price of $______ per one one-hundredth of a Preferred Share (the "Exercise
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase, including Certificate, on the reverse side
hereof completed and duly executed, with signature guaranteed.
The number of Rights represented by this Right Certificate and the
Exercise Price set forth above are the number of Rights and the Exercise
Price as of ______, 1995, based upon the Preferred Shares as constituted on
such date.
As provided in the Rights Agreement, the Exercise Price and the number of
Preferred Shares or other securities or other property that may be purchased
upon the exercise of the Rights represented by this Right Certificate are
subject to modification and adjustment upon the occurrence of certain events.
The Rights Agreement contains a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights
Agent, the Company and the holders of Right Certificates. This Right
Certificate is subject to all the terms and conditions of the Rights
Agreement, which terms and conditions are hereby incorporated herein by
reference and made a part hereof. Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the above-mentioned
offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon presentation and surrender at the above-mentioned offices of the Rights
Agent, with the Form of Assignment, including Certificate, on the reverse
side hereof completed and duly executed, with signature guaranteed, may be
exchanged for another Right Certificate or Right Certificates of like tenor
and date representing Rights entitling the holder thereof to purchase a like
aggregate number of Preferred Shares or, in certain circumstances, other
securities or other property, as the Rights represented by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive, upon the surrender hereof with the Form
of Election to Purchase, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, another Right
Certificate or Right Certificates for the number of whole Rights not
exercised. Subject to the provisions of the Rights Agreement, the Rights
represented by this Right Certificate may be redeemed by the Company, at its
option, at a redemption price of $.005 per Right.
No fractional securities shall be issued upon the exercise of any
Right or Rights represented hereby (other than fractions of Preferred Shares
that are integral multiples of one one-hundredth of a Preferred Share, that
may, at the option of the Company, be represented by depositary receipts),
but in lieu thereof, a cash payment shall be made, as provided in the Rights
Agreement.
2
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, until the
Right or Rights represented by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ___________.
Attest: U S WEST, Inc.
By ______________________ By ______________________
Name: Name:
Title: Title:
Countersigned:
State Street Bank and Trust
Company
By ______________________ By ______________________
Name: Name:
Title: Title:
3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
______________________________________________________________________________,
(Name, address and social security or other
identifying number of transferee)
________________________________ (___________) of the Rights represented by
this Right Certificate, together with all right, title and interest in and to
said Rights, and hereby irrevocably constitutes and appoints attorney to
transfer said Rights on the books of U S WEST, Inc. with full power of
substitution.
Dated: __________________, 19__ _________________________
(Signature)
Signature Guaranteed:
CERTIFICATE
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by
this Right Certificate are not Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: _________________, 19__ _________________________
(Signature)
Signature Guaranteed:
4
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed,
with signature guaranteed, the Company may deem the Rights represented by
this Right Certificate to be Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any Right Certificate or
Right Certificates in exchange for this Right Certificate.
5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Right Certificate)
To U S WEST, Inc.:
The undersigned hereby irrevocably elects to exercise
______________________________________ (________) of the Rights represented
by this Right Certificate to purchase the following:
(Check one of the following boxes)
/ / the Preferred Shares or other securities or property issuable upon the
exercise of said number of Rights pursuant to Section 7(c) of the Rights
Agreement.
/ / the shares of U S WEST Communications Group Common Stock, par value
$0.01 per share, of the Company, or other securities or property issuable
upon the exercise of said number of Rights pursuant to Section 11(a)(ii) of
the Rights Agreement.
/ / the securities issuable upon the exercise of said number of Rights
pursuant to Section 14(a) of the Rights Agreement.
The undersigned hereby requests that any such property and a
certificate for any such securities be issued in the name of and delivered
to:
_______________________________________________________________________________
_______________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
The undersigned hereby further requests that if said number of
Rights shall not be all the Rights represented by this Right Certificate, a
new Right Certificate for the remaining balance of such Rights be issued in
the name of and delivered to:
_______________________________________________________________________________
_______________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
Dated: _____________, 19__ ________________________________
(Signature)
Signature Guaranteed:
6
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by
this Right Certificate are not Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: __________________, 19__ _________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed,
with signature guaranteed, the Company may deem the Rights represented by
this Right Certificate to be Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any property or certificate
for securities upon the exercise of this Right Certificate or issue any new
Right Certificate for any remaining balance of unexercised Rights represented
by this Right Certificate.
7
EXHIBIT B-2
FORM OF
MEDIA RIGHT CERTIFICATE
Certificate No. MR-____ _____ Rights
NOT EXERCISABLE AFTER APRIL 6, 1999 OR EARLIER IF REDEEMED. THE
RIGHTS ARE SUBJECT TO REDEMPTION AT $.0005 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY
CERTAIN PERSONS OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID.
U S WEST Media Group Right Certificate
U S WEST, 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 and conditions
of the Amended and Restated Rights Agreement (the "Rights Agreement") dated
as of ________, 1995 by and between U S WEST, Inc., a Delaware corporation
(the "Company"), and State Street Bank and Trust Company (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 o'clock p.m.,
Englewood, Colorado time, on the earlier of the Redemption Date (as such term
is defined in the Rights Agreement) or April 6, 1999, at the office or agency
of the Rights Agent in Boston, Massachusetts, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid and
nonassessable share of Series B Junior Participating Cumulative Preferred
Stock, par value $1.00 per share, of the Company (a "Preferred Share") or, in
certain circumstances, other securities or other property, at a purchase
price of $______ per one one-hundredth of a Preferred Share (the "Exercise
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase, including Certificate, on the reverse side
hereof completed and duly executed, with signature guaranteed.
The number of Rights represented by this Right Certificate and the
Exercise Price set forth above are the number of Rights and the Exercise
Price as of _____, 1995, based upon the Preferred Shares as constituted on
such date.
As provided in the Rights Agreement, the Exercise Price and the number of
Preferred Shares or other securities or other property that may be purchased
upon the exercise of the Rights represented by this Right Certificate are
subject to modification and adjustment upon the occurrence of certain events.
The Rights Agreement contains a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights
Agent, the Company and the holders of Right Certificates. This Right
Certificate is subject to all the terms and conditions of the Rights
Agreement, which terms and conditions are hereby incorporated herein by
reference and made a part hereof. Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the above-mentioned
offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon presentation and surrender at the above-mentioned offices of the Rights
Agent, with the Form of Assignment, including Certificate, on the reverse
side hereof completed and duly executed, with signature guaranteed, may be
exchanged for another Right Certificate or Right Certificates of like tenor
and date representing Rights entitling the holder thereof to purchase a like
aggregate number of Preferred Shares or, in certain circumstances, other
securities or other property, as the Rights represented by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive, upon the surrender hereof with the Form
of Election to Purchase, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, another Right
Certificate or Right Certificates for the number of whole Rights not
exercised. Subject to the provisions of the Rights Agreement, the Rights
represented by this Right Certificate may be redeemed by the Company, at its
option, at a redemption price of $.005 per Right.
No fractional securities shall be issued upon the exercise of any
Right or Rights represented hereby (other than fractions of Preferred Shares
that are integral multiples of one one-hundredth of a Preferred Share, that
may, at the option of the Company, be represented by depositary receipts),
but in lieu thereof, a cash payment shall be made, as provided in the Rights
Agreement.
2
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, until the
Right or Rights represented by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ___________.
Attest: U S WEST, Inc.
By ______________________ By ______________________
Name: Name:
Title: Title:
Countersigned:
State Street Bank and Trust
Company
By ______________________ By ______________________
Name: Name:
Title: Title:
3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
______________________________________________________________________________,
(Name, address and social security or other
identifying number of transferee)
________________________________ (___________) of the Rights represented by
this Right Certificate, together with all right, title and interest in and to
said Rights, and hereby irrevocably constitutes and appoints attorney to
transfer said Rights on the books of U S WEST, Inc. with full power of
substitution.
Dated: __________________, 19__ _________________________
(Signature)
Signature Guaranteed:
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by
this Right Certificate are not Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: _________________, 19__ _________________________
(Signature)
Signature Guaranteed:
4
Form of Reverse Side of Right Certificate
(continued)
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed,
with signature guaranteed, the Company may deem the Rights represented by
this Right Certificate to be Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any Right Certificate or
Right Certificates in exchange for this Right Certificate.
5
Form of Reverse Side of Right Certificate
(continued)
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Right Certificate)
To U S WEST, Inc.:
The undersigned hereby irrevocably elects to exercise
______________________________________ (________) of the Rights represented
by this Right Certificate to purchase the following:
(Check one of the following boxes)
/ / the Preferred Shares or other securities or property issuable upon the
exercise of said number of Rights pursuant to Section 7(c) of the Rights
Agreement.
/ / the shares of U S WEST Media Group Common Stock, par value $0.01 per
share, of the Company, or other securities or property issuable upon the
exercise of said number of Rights pursuant to Section 11(a)(ii) of the Rights
Agreement.
/ / the securities issuable upon the exercise of said number of Rights
pursuant to Section 14(a) of the Rights Agreement.
The undersigned hereby requests that any such property and a
certificate for any such securities be issued in the name of and delivered
to:
_______________________________________________________________________________
_______________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
The undersigned hereby further requests that if said number of
Rights shall not be all the Rights represented by this Right Certificate, a
new Right Certificate for the remaining balance of such Rights be issued in
the name of and delivered to:
_______________________________________________________________________________
_______________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
Dated: _____________, 19__ ________________________________
(Signature)
Signature Guaranteed:
6
Form of Reverse Side of Right Certificate
(continued)
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by
this Right Certificate are not Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: __________________, 19__ _________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed,
with signature guaranteed, the Company may deem the Rights represented by
this Right Certificate to be Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any property or certificate
for securities upon the exercise of this Right Certificate or issue any new
Right Certificate for any remaining balance of unexercised Rights represented
by this Right Certificate.
7