REGENT COMMUNICATIONS, INC.
AND
FIFTH THIRD BANK
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF MAY 19, 2003
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions..............................................................................1
Section 2. Appointment of Rights Agent......................................................................6
Section 3. Issue of Rights Certificates.....................................................................6
Section 4. Form of Rights Certificates......................................................................7
Section 5. Countersignature and Registration................................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.........................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................10
Section 8. Cancellation of Rights Certificates.............................................................11
Section 9. Reservation and Availability of Capital Stock...................................................12
Section 10. Preferred Stock Record Date.....................................................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights..........................................................................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......................................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............................22
Section 14. Fractional Rights and Fractional Shares.........................................................25
Section 15. Rights of Action................................................................................26
Section 16. Agreement of Rights Holders.....................................................................26
Section 17. Rights Certificate Holder Not Deemed a Stockholder..............................................27
Section 18. Duties of Rights Agent..........................................................................27
Section 19. Compensation and Indemnification of the Rights Agent............................................30
Section 20. Merger or Consolidation or Change of Name of Rights Agent.......................................30
Section 21. Change of Rights Agent..........................................................................31
Section 22. Issuance of New Rights Certificates.............................................................32
Section 23. Redemption......................................................................................32
Section 24. Exchange........................................................................................33
Section 25. Notice of Certain Events........................................................................34
Section 26. Notices.........................................................................................35
Section 27. Supplements and Amendments......................................................................35
Section 28. Successors......................................................................................36
Section 29. Determinations and Actions by the Board, etc....................................................36
Section 30. Benefits of this Agreement......................................................................37
Section 31. Severability....................................................................................37
Section 32. Governing Law...................................................................................37
Section 33. Counterparts....................................................................................37
Section 34. Descriptive Headings............................................................................37
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of May 19, 2003 (the "Agreement"), between
REGENT COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and FIFTH
THIRD BANK, an Ohio banking corporation (the "Rights Agent").
WHEREAS, on May 19, 2003 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend of one
Right for each share of Common Stock (as defined herein), outstanding at the
Close of Business (as defined herein) on the Record Date (as defined herein),
and has authorized the issuance of one Right with respect to each share of
Common Stock issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and the Distribution Date (as defined
herein), each Right initially representing the right to purchase one-one
thousandth of a share of Series J Junior Participating Preferred Stock of the
Company having the rights, powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth (each, a
"Right" and collectively, "Rights").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the shares of Common Stock
then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or any Subsidiary of
the Company, or any Person holding shares of Common Stock for or pursuant to the
terms of any such plan to the extent, and only to the extent, of such shares so
held, or (iv) a Person who acquires 15% or more of the shares of Common Stock
then outstanding as a result of a Qualifying Acquisition, to the extent and only
to the extent, of such shares so acquired. Notwithstanding the foregoing, no
Person shall become an Acquiring Person as the result of an acquisition of
shares of Common Stock by the Company which, by reducing the number of shares of
Common Stock outstanding, increases the proportionate number of shares of Common
Stock beneficially owned by such Person to 15% or more of the shares of Common
Stock then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Stock then outstanding by reason
of share purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares of Common Stock,
then such Person shall be deemed to be an Acquiring Person if such Person is
then the Beneficial Owner of 15% or more of the Common Stock then outstanding.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an Acquiring
Person, as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, without any intention of changing or influencing
control of the Company, and
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such Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an Acquiring Person, then
such Person shall not be deemed an Acquiring Person for any purposes of this
Agreement unless and until such Person shall again become an "Acquiring Person";
provided, that, to the extent the parties (the "Members") to the Stockholders'
Agreement could be deemed a "group" (as such term is used in Rule 13d-5 of the
general Rules and Regulations under the Exchange Act), no Member shall be deemed
an "Acquiring Person" for any purpose of this Agreement unless and until such
Member becomes the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding without including the number of shares Beneficially Owned by
the other Members.
(b) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not
in writing), or upon the exercise of conversion rights, exchange rights,
other rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", (A) securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect
to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not
in writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to beneficially own, any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and
in
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accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of this
paragraph (d)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the date of
such acquisition.
(e) "Board" or "Directors" shall mean the Board of Directors of the
Company.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking or trust institutions in the State of New York are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(h) "Common Stock" shall mean, when used with reference to the Company,
the common stock, par value $0.01 per share, of the Company and shall mean, when
used with reference to any Person other than the Company, the class of capital
stock with the greatest aggregate voting power, or the class of equity
securities or other equity interests having power to control or direct the
management, of such Person.
(i) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(j) "Company" shall mean Regent Communications, Inc., a Delaware
corporation.
(k) "Co-Rights Agent" shall mean any Co-Rights Agent that the Company
may from time to time appoint.
(l) "Current Market Price" shall, when referring to the price of the
Common Stock, have the meaning set forth in Section 11(d)(i) hereof and, when
referring to the price of the Preferred Stock, shall have the meaning set forth
in Section 11(d)(ii) hereof.
(m) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
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(n) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date), or (ii) the Close of Business on the tenth
Business Day (or, if such tenth Business Day occurs before the Record Date, the
Close of Business on the Record Date), or such specified or unspecified later
date on or after the Record Date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person, after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person holding shares of Common Stock for or
pursuant to the terms of any such plan) of, or of the first public announcement
of the intention of any Person (other than any of the Persons referred to in the
preceding parenthetical) to commence, a tender or exchange offer the
consummation of which would result in such Person becoming the beneficial owner
of 15% or more of the outstanding shares of Common Stock.
(o) "Eligible Stock" shall mean the shares of Common Stock.
(p) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(q) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, as in effect on the date of this Agreement.
(r) "Exchange Date" shall have the meaning set forth in Section 7(a)
hereof.
(s) "Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
(t) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(u) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(v) "Nasdaq" shall mean The Nasdaq National Market.
(w) "Person" shall mean any individual, firm, corporation, partnership
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(x) "Preferred Stock" shall mean shares of Series J Junior Participating
Preferred Stock of the Company.
(y) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(z) "Purchase Price" shall have the meaning set forth in Section 4(a)
and 11(a)(ii) hereof.
(aa) "Qualifying Acquisition" shall have the meaning set forth in
11(a)(ii) hereof.
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(bb) "Record Date" shall mean the Close of Business on May 30, 2003.
(cc) "Redemption Period" shall have the meaning set forth in Section
23(a) hereof.
(dd) "Right" and "Rights" shall have the meaning set forth in the
recitals hereof.
(ee) "Rights Agent" shall mean Fifth Third Bank, an Ohio banking
corporation.
(ff) "Rights Certificate" shall have the meaning set forth in Section
3(d) hereof.
(gg) "Rights Dividend Declaration Date" shall have the meaning set forth
in the recitals hereof.
(hh) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
(ii) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii)hereof.
(jj) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(kk) "Securities Act" shall mean the Securities Act of 1933, as amended
and as in effect on the date of this Agreement.
(ll) "Spread" shall have the meaning as set forth in Section 11(a)(iii)
hereof.
(mm) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
(nn) "Stockholders' Agreement" shall mean the Third Amended and Restated
Stockholders' Agreement, dated as of December 13, 1999, by and among the Company
and the parties named therein.
(oo) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person, or is
otherwise controlled by such Person.
(pp) "Substitution Period" shall have the meaning set forth in Section
11(a) hereof.
(qq) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
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(rr) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint
Co-Rights Agents as it may deem necessary or desirable, upon ten (10) days prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such Co-Rights Agent.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) As promptly as practicable following the Record Date, the Company
will send or deliver a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form attached hereto as Exhibit B, to each record holder of
Eligible Stock as of the Close of Business on the Record Date at the address of
such holder shown on the records of the Company. With respect to certificates
for shares of Eligible Stock outstanding as of the Record Date, until the
earlier of the Distribution Date or the Expiration Date, the Rights will be
evidenced by such certificates for the Eligible Stock and the registered holders
of the Eligible Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration Date, the
transfer of any certificate representing shares of Eligible Stock in respect of
which Rights have been issued shall also constitute the transfer of the Rights
associated with the shares of Eligible Stock represented thereby.
(b) Rights shall be issued in respect of all shares of Eligible Stock
outstanding at the Close of Business on the Record Date and those issued
(whether originally issued or from the Company's treasury) after the Record Date
but prior to the earlier of the Distribution Date or the Expiration Date. Rights
shall also be issued to the extent provided in Section 22 in respect of all
shares of Eligible Stock which are issued (whether originally issued or from the
Company's treasury) after the Distribution Date and prior to the Expiration
Date. Certificates representing such shares of Eligible Stock shall also be
deemed to be certificates for Rights, and shall bear the following legend (in
addition to any other legends that may be required):
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Regent Communications, Inc. (the "Company") and Fifth Third Bank
(the "Rights Agent") dated as of May 19, 2003, as the same may
be amended from time to time (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement as in effect on the
date of mailing without charge after receipt of a written
request therefor.
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Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Eligible Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Eligible Stock
shall also be the registered holders of the associated Rights, and the transfer
of any such certificate shall also constitute the transfer of the Rights
associated with the Eligible Stock represented thereby.
Notwithstanding this Section 3, the omission of a legend shall not affect
enforceability of any part of this Agreement or the rights of any holder of the
Rights.
(c) Until the earlier of the Distribution Date or the Expiration Date
(i) the Rights will be evidenced (subject to the provisions of paragraph (a) of
this Section 3) by the certificates for Eligible Stock registered in the names
of the holders thereof (which certificates for Eligible Stock shall also be
deemed to be Rights Certificates) and not by separate Rights Certificates, and
(ii) the Rights will be transferable only in connection with the transfer of the
underlying shares of Eligible Stock (including a transfer to the Company). The
Company shall give the Rights Agent prompt written notice of the Distribution
Date.
(d) As soon as practicable after the Distribution Date and receipt of
written notice of the Distribution Date from the Company, the Rights Agent upon
notification thereof will, at the Company's expense, send by first-class,
insured, postage prepaid mail, to each record holder of Eligible Stock as of the
Close of Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a rights certificate, in substantially the form
of Exhibit C hereto (the "Rights Certificate"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Eligible Stock has
been made pursuant to Section 11 hereof, at the time of distribution of the
Rights Certificates, the Company shall make necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit C hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate, and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. The
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Rights Certificates shall be in a machine printable format and in a form
reasonably satisfactory to the Rights Agent. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates, whenever issued,
shall be dated as of the Record Date, show the date of countersignature, and on
their face shall entitle the holders thereof to purchase such number of one-one
thousandths of a share of Preferred Stock as shall be set forth therein at the
price set forth therein (such exercise price per one-one thousandth of a share,
the "Purchase Price"), but the amount and type of securities purchasable upon
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(d) or Section 22
hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person; (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such; or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Directors has determined is
part of an agreement, arrangement or understanding which has as a primary
purpose or effect avoidance of Section 7(e) hereof and any Rights Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
7(e) of such Rights Agreement.
The Company shall instruct the Rights Agent in writing of the Rights which
should be so legended and shall supply the Rights Agent with such legended
Rights Certificates. Notwithstanding this Section 4(b), the omission of a legend
shall not affect the enforceability of any part of this Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, President, or Chief Financial Officer and a
Secretary or Assistant Secretary either manually or by facsimile signature. The
Rights Certificates shall be countersigned either manually or by facsimile by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights
8
Certificates had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office or at offices designated as the appropriate
place for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of one-one thousandths of a share of Preferred Stock
(or following a Triggering Event, Common Stock, other securities, cash, or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have properly completed and signed the certificate contained in the form
of assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Certificates, as the case may be, as so
requested. The Company may require payment by the holder of Rights of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate, if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed, or mutilated.
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SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly and properly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one-one thousandth of a
share of Preferred Stock (or other securities, cash or other assets, as the case
may be) as to which the Rights are exercised, at or prior to the earlier of (i)
the close of business on May 30, 2013 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof, or (iii)
the time at which such Rights are exchanged (the "Exchange Date") as provided in
Section 24 hereof (the earliest of (i), (ii) and (iii) being herein referred to
as the "Expiration Date").
(b) Each Right shall entitle the registered holder thereof to purchase
one-one thousandth of a share of Preferred Stock, and the Purchase Price for
each one-one thousandth of a share of Preferred Stock pursuant to the exercise
of a Right shall initially be $35.00, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly and
properly executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one-one thousandth of a share of Preferred
Stock (or Common Stock, other securities, cash or other assets, as the case may
be) to be purchased and an amount equal to any applicable transfer tax or
governmental charge in cash, or by certified check or cashier's check payable to
the order of the Company, the Rights Agent shall, subject to Section 18(k)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent) certificates for the total number of one-one thousandths of a
share of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one-one thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of fractional shares in accordance with Section 14,
(iii) promptly after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) after receipt thereof, promptly deliver such cash, if any,
to or upon the order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make
10
all arrangements necessary so that such securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
Directors has determined is part of an agreement, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. The Rights Agent will endeavor to comply with the
provisions hereof to the extent it has received instructions from the Company
concerning such matters.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
properly completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered
for such exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other
11
Rights Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
(and following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, shares of Common Stock
and/or other securities) that, as provided in this Agreement, including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) In the event the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
upon the exercise of Rights become listed on any national securities exchange,
Nasdaq, or such other system then in use, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange, Nasdaq or such other
system then in use upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, or
as soon as is required by law following the Distribution Date, as the case may
be, a registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or blue sky laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Upon any suspension of
exercisability of Rights referred to in this Section 9(c), the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect, in each case with simultaneous written notice
to the Rights Agent. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable and shall be null and void so long
as held by a holder in any jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtainable, or the exercise
thereof shall not be permitted under applicable law or a registration statement
shall not have been declared effective. The Rights Agent may assume that
12
any Right exercised is permitted to be exercised under applicable law and shall
have no liability for acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all one-one thousandths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
non-assessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates or
of any certificates for a number of one-one thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax or charge which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of certificates for a number of one-one thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) in
a name other than that of the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of one-one thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a name other
than that of the registered holder upon the exercise of any Rights until any
such tax or charge shall have been paid (any such tax or charge being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax or charge is
due.
SECTION 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for a number of one-one thousandths of
a share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of such fractional shares of Preferred Stock
(or Common Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes and charges) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Common Stock and/or other securities as the case
may be) transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
13
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER
OF RIGHTS.
The Purchase Price, the number and kind of shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of
its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred
Stock or the number and kind of shares of capital stock issuable on
such date, as the case may be, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the aggregate adjusted
Purchase Price then in effect necessary to exercise a Right in
full, the aggregate number and kind of shares of Preferred Stock or
the number and kind of shares of capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock (or other capital
stock, as the case may be) transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination, or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Sections 23 and 24 of this Agreement, in
the event that any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and Associates, shall,
at any time after the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing such Person to become an
Acquiring Person is (x) a transaction set forth in Section 13(a)
hereof or (y) is a Qualifying Acquisition (as defined below), then
proper provision shall be made so that promptly following the
Redemption Period, each holder of a Right (except as provided below
and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof and payment of an amount equal to
the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one-one thousandths of a
share of Preferred Stock, such number of shares of Common Stock as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one-one thousandths of a share
14
of Preferred Stock for which a Right was or would have been
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, whether or not such Right was then exercisable,
and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement except to the
extent set forth in Section 13 hereof) by 50% of the Current Market
Price per share of Common Stock (determined pursuant to Section
11(d) hereof) on the date of such first occurrence (such number of
shares, the "Adjustment Shares"). A "Qualifying Acquisition" shall
be any acquisition of any Person by the Company in a transaction
which complies with Section 11(o) hereof and in which (A) any
Person shall consolidate with, merge with and into, or sell or
transfer assets or earning power aggregating more than 50% of the
assets or earning power of such Person to, the Company in exchange
in whole or in part for Common Stock of the Company, (B) the
Company shall be the continuing or surviving corporation in such
consolidation, merger or acquisition, (C) any Person who would
otherwise become an Acquiring Person in such transaction was a
stockholder, partner, member or holder of any similar ownership
interest of the Person being acquired by the Company at the time
the definitive acquisition agreement was executed and such Person
agrees in writing not to acquire any additional shares of the
Company's Common Stock other than the shares to be acquired in the
transaction and any shares owned prior to the date of the
definitive acquisition agreement and which ownership has been
disclosed to the Company, and (D) the Board approves the
transaction by no less than a vote of two-thirds of the Board prior
to the execution of such definitive acquisition agreement.
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of Preferred Stock having an aggregate market
value equal to the current per share market price of a share of
Common Stock. In the event that the number of shares of Common
Stock which is authorized by the Company's Amended and Restated
Certificate of Incorporation but not outstanding, or reserved for
issuance for purposes other than upon exercise of the Rights, is
not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Board shall,
to the extent permitted by applicable law and by any agreements or
instruments then in effect to which the Company is a party, (A)
determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over
(2) the Purchase Price (such excess, the "Spread"), and (B) with
respect to each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for some or all of the Adjustment
Shares, upon exercise of a Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
Preferred Stock which the Board has deemed to have the same value
as shares of Common Stock) (such shares of equity securities being
herein called "Common Stock Equivalents"), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value,
where such
15
aggregate value has been determined by the Board based upon the
advice of an investment banking firm selected by the Board;
provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of
a Section 11(a)(ii) Event or (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of
(x) or (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread.
If, upon the occurrence of a Section 11(a)(ii) Event, the Board shall determine
in good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, then
if the Board so elects, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period, as it may
be extended, the "Substitution Period"). To the extent that action is to be
taken pursuant to the preceding provisions of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to the first sentence of
this Section 11(a)(iii) and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall be the Current
Market Price per share of the Common Stock on the Section 11(a)(ii) Trigger Date
and the value of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock on such date. The Board may, but shall not be required
to, establish procedures to allocate the right to receive shares of Common Stock
upon the exercise of the Rights among holders of Rights pursuant to this Section
11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the shares of Preferred Stock ("Equivalent
Preferred Stock") or securities convertible into Preferred Stock at a price per
share of Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share of Preferred Stock, if a security convertible into
Preferred Stock) less than the Current Market Price per share of the Preferred
Stock on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent Preferred Stock so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price,
16
and the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock), or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price per share of the Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock and the denominator of which shall be such Current
Market Price per share of the Preferred Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the Current
Market Price of the Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common
Stock for the thirty (30) consecutive Trading Days immediately
prior to but not including such date; provided, however, that in
the event that the Current Market Price of the Common Stock is
determined during a period following the announcement by the issuer
of such Common Stock of (i) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or securities
convertible into such Common Stock (other than the Rights), or (ii)
any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite thirty (30)
Trading Day period, as set forth above, after the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each
such case, the Current Market Price shall be appropriately adjusted
to take into account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way, or, in case no
such sale takes
17
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 Nasdaq or, if the
shares of Common Stock are not listed or admitted to trading on
Nasdaq, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use, or,
if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market
in the shares of Common Stock selected by the Board.
If on any such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good faith by the Board
shall be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business, or, if the shares
of Common Stock are not listed or admitted to trading on any national securities
exchange, the term "Trading Day" shall mean a Monday, Tuesday, Wednesday,
Thursday or Friday on which banking or trust institutions in the State of New
York are not authorized or obligated by law or executive order to close. If the
Common Stock is not publicly held or not listed or traded, Current Market Price
shall mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d), the
Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such number
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the
Current Market Price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed
or traded, Current Market Price per share of the Preferred Stock
shall mean the fair value per share as determined in good faith by
the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the Current Market
Price of one-one thousandth of a share of Preferred Stock shall be
equal to the Current Market Price of one share of Preferred Stock
divided by 1,000.
18
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding
the first sentence of this Section 11(e), an adjustment required by this Section
11 shall be made no later than the earlier of (i) three years from the date of
the transaction which requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one-one thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one-one thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one-one thousandths
of a share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of one-one thousandths of a share of Preferred Stock issuable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one-one thousandths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the
19
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates 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 Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one-one thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one-one thousandth of a
share and the number of one-one thousandths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then-par value, if any, of the number of
one-one thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and non-assessable such number of one-one thousandths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one-one thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one-one thousandths of a share of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board in its sole discretion shall determine to be advisable
in order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than the
Current Market Price, (iii) issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are convertible into or exchangeable
for Preferred Stock, (iv) stock dividends or (v)
20
issuance of rights, options or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of any class or series of Eligible Stock payable in
shares of the respective such class or series of Eligible Stock, (ii) subdivide
the outstanding shares of any class or series of Eligible Stock, or (iii)
combine the outstanding shares of any class or series of Eligible Stock into a
smaller number of shares, the number of Rights associated with each share of
such class or series of Eligible Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each share of such class
or series of Eligible Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of the
respective Eligible Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of the respective
Eligible Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of the respective
Eligible Stock outstanding immediately following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts and computations accounting for such
adjustment, (b) promptly file with
21
the Rights Agent and with each transfer agent for the Preferred Stock and the
Common Stock, a copy of such certificate and (c) mail or deliver a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any adjustment unless and until it
shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) Subject to Section 23 of this Agreement, in the event that,
following the Stock Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the
Company shall not be the continuing or surviving corporation of
such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation
or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in
one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with
Section 11(o) hereof),
then, and in each such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section
7(e) hereof, shall, upon the expiration of the Redemption Period,
thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable shares of Common Stock of
the Principal Party, not subject to any liens, encumbrances, rights
of first refusal or other adverse claims, as shall be equal to the
result obtained by
(1) multiplying the then current Purchase Price by the
number of one-one thousandths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first
occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the
number of one-one thousandths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and
(2) dividing that product (which product, following
the first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per share of
the shares of Common Stock of such Principal Party on the date
of consummation of such Section 13 Event (or the fair market
value on such date of other securities or property of the
Principal Party, as provided for herein);
(ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event;
(iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be
of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person that
is the issuer of any securities into which shares of Common Stock
are converted in such merger or consolidation, and if no securities
are so issued, the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any such Section 13 Event, the
Principal Party will:
(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, and
will use its best efforts to cause such registration statement to
(A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act;
(iii) use its best efforts to obtain any necessary
regulatory approvals in respect of the securities purchasable upon
exercise of outstanding Rights; and
(iv) use its best efforts, if such Common Stock of the
Principal Party shall be listed or admitted to trading on a
national securities exchange, to list or admit to trading (or
continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on such securities exchange, or if the
securities of the Principal Party purchasable upon exercise of the
Rights shall not be listed or admitted to trading on a national
securities exchange, to cause the Rights and the securities
purchasable upon exercise of the Rights to be reported by Nasdaq or
such other system then in use.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a) hereof.
(d) In no event shall the Rights Agent have any liability in
respect of any such Principal Party transactions, including, without limitation,
the propriety thereof. The Rights
24
Agent may rely and be fully protected in relying upon a certificate of the
Company stating that the provisions of this Section 13 have been fulfilled.
Notwithstanding anything in this Agreement to the contrary, the prior written
consent of the Rights Agent must be obtained in connection with any supplemental
agreement which alters the rights or duties of the Rights Agent.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of the whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, or, in case no such sale takes place on such day, the average of the
high bid and low asked prices, in either case as reported by Nasdaq or, if the
Rights are not listed or admitted to trading on Nasdaq, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading, or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by the Board. If on any such date no such market
maker is making a market in the Rights the fair value of the Rights on such date
as determined in good faith by the Board shall be used. In the event the Rights
are listed or admitted to trading on a national securities exchange, the closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the high bid and low asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to the national securities exchange on
which the Rights are listed or admitted to trading.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one-one
thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one-one thousandth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one-one thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one-one thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one-one thousandth of a share of Preferred Stock shall be one-one thousandth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the events specified in
Section 11 giving rise to the right to receive Common Stock, Common Stock
Equivalents or other securities upon the exercise of a Right, the Company shall
not be required to issue fractions of shares of
25
Common Stock, Common Stock Equivalents or other securities upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common
Stock, Common Stock Equivalents or other securities. In lieu of fractional
shares of Common Stock, Common Stock Equivalents or other securities the Company
may pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one (1) share of Common Stock, Common Stock
Equivalents or other securities. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing price of one
share of Common Stock (as determined pursuant to Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, except the rights of action
vested in the Rights Agent pursuant to Section 18 and Section 19 hereof, are
vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Eligible Stock);
and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Eligible Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Eligible Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations hereunder of any Person subject to this
Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.
Every holder of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Eligible Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate form of
assignment and the certificate contained therein duly completed and executed;
26
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Eligible Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Eligible Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any government
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes only the duties and obligations expressly imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel of its
selection (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, and the Rights Agent shall incur no liability, for or in respect
of any action taken or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Market Price)
27
be proved or established by the Company prior to taking or suffering or omitting
to take 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 person
believed by the Rights Agent to be any one of the Chief Executive Officer,
President, or Chief Financial Officer of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent, and
the Rights Agent shall incur no liability, for or in respect of any action
taken, omitted or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except as to 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 is serving as an administrative agent and
shall not be under any responsibility in respect of, the validity of any
provision of this Agreement or the execution and delivery of this Agreement
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section 7(e) hereof) or
any adjustment required under any of the provisions hereof or responsible for
the manner, method, or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after the Rights
Agent's actual receipt of notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or shares of
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or shares of Preferred
Stock will, when so issued, be validly authorized and issued, fully paid and
non-assessable, nor shall the Rights Agent be responsible for the legality of
the terms hereof in its capacity as an administrative agent.
(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
person believed by the Rights Agent to be any one of the Chief Executive
Officer, President, or Chief Financial Officer 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, omitted to be taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer or
for any delay in acting while waiting for those instructions. Any application by
the Rights Agent for written instructions from
28
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or suffered
or such omission shall be effective. The Rights Agent shall not be liable for
any action taken or suffered by, or omission of, the Rights Agent in accordance
with a proposal included in any such application on or after the date specified
in such application (which date shall not be less than five Business Days after
the date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instruction in response
to such application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person
or legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect, or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect, or misconduct; provided, however, the Rights Agent was not grossly
negligent in the selection thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been properly completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the Company.
(l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or obligations
shall be read into this Agreement against the Rights Agent.
(m) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached to the Rights Certificate unless
the Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii)
29
the non-execution of such certification including, without limitation, any
refusal to honor any otherwise permissible assignment or election by reason of
such non-execution.
(n) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or transfer
of the Rights Certificates.
SECTION 19. COMPENSATION AND INDEMNIFICATION OF THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such compensation
as shall be agreed in writing between the Company and the Rights Agent for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and expenses and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent, its officers, employees, agents and directors for,
and to hold each of them harmless against, any loss, liability, or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for any action taken, suffered or omitted by the Rights
Agent or such other indemnified party in connection with the acceptance and
administration of this Agreement and the exercise of its duties hereunder,
including but not limited to the costs and expenses of defending against any
claim (whether asserted by the Company, a holder of Rights, or any other Person)
of liability in the premises. The indemnity provided for hereunder shall survive
the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this Agreement or the exercise of
its duties hereunder in reliance upon any Rights Certificate or certificate for
Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed and executed by the proper person or persons.
(c) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of the action unless such loss or
damage results from the gross negligence, bad faith or willful misconduct of the
Rights Agent.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to all or
substantially all the stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such Person would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent
30
shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at any such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
SECTION 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 thirty (30) days' notice in writing mailed
to the Company. The Company may remove the Rights Agent or any successor Rights
Agent upon thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30) days after giving notice
of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the Rights Agent or the registered holder
of any Rights Certificate may, at the expense of the Company, 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 (i) a Person organized and doing business under the laws of the United
States or the States of Delaware, Ohio or Kentucky (or of any other state of the
United States so long as such Person is authorized to do business in the States
of Delaware, Ohio or Kentucky), in good standing, having an office in the States
of Delaware, Ohio or Kentucky which is authorized under such laws to exercise
corporate trust power and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (ii) an affiliate of
such a Person. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock,
31
and mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price per share and the number or kind of
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date (other than upon exercise of a Right) and prior
to the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION.
(a) The Board may, at its option, at any time during the period
commencing on the Rights Dividend Declaration Date and ending on the earlier of
(i) the Close of Business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to the Record Date,
the Close of Business on the tenth day following the Record Date), or (ii) the
Close of Business on the Final Expiration Date, (the "Redemption Period") cause
the Company to redeem all but not less than all the then outstanding Rights at a
redemption price of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, that, if the Board
authorizes redemption of the Rights on or after the time a Person becomes an
Acquiring Person, then such authorization shall require the concurrence of two
thirds of the Directors. If, following the occurrence of a Stock Acquisition
Date and following the expiration of the Company's right of redemption hereunder
(i) a Person who is an Acquiring Person shall have transferred or otherwise
disposed of a number of shares of Common Stock in one transaction or series of
transactions, not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a Triggering Event such
that such Person is thereafter a Beneficial Owner of 10% or less of the
outstanding shares of Common Stock, (ii) there are no other Persons, immediately
following the occurrence of the event described in clause (i), who are Acquiring
Persons, and (iii) the Board, by a vote of two thirds of
32
the Board, shall so approve, then the Company's right of redemption shall be
reinstated and thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
or a Section 13 Event until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the Redemption Price
in cash, shares of Common Stock (based on the Current Market Price of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. Promptly after the
action of the Board ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
SECTION 24. EXCHANGE.
(a) The Board may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 7(e) hereof) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio").
(b) Immediately upon the action of the Board ordering the exchange
of any Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
33
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Common Stock Equivalents for shares of Common Stock
exchangeable for Rights, at the initial rate of one Common Stock Equivalent for
each share of Common Stock, as appropriately adjusted to reflect adjustments in
dividend, liquidation and voting rights of Common Stock Equivalents pursuant to
the terms thereof, so that each Common Stock Equivalent delivered in lieu of
each share of Common Stock shall have essentially the same dividend, liquidation
and voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For
the purposes of this paragraph (e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings) or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred
Stock), or (iv) to effect any consolidation or merger into or with, 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 (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or
34
the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate and to the Rights Agent, to the extent feasible
and in accordance with Section 26 hereof, a notice of the occurrence of such
event which shall specify the event and the consequences of the event to holders
of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
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 Rights Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Regent Communications, Inc.
100 E. RiverCenter Blvd. 9th Floor
Covington, Kentucky 41011
Attention: Chief Financial Officer
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
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Fifth Third Bank
38 Fountain Square Plaza
Mail Drop 10AT60-3212
Cincinnati, Ohio 45202
Attention: Corporate Trust Services
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to any such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date and subject to the last sentence of this Section
27, the Company may in its sole and absolute discretion, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of certificates
representing shares of Common Stock; provided, however, that the right of the
Board of Directors to extend the Distribution Date shall not require any
amendment or supplement hereunder. From and after the Distribution Date and
subject to the last sentence of
35
this Section 27, the Company may in its sole and absolute discretion, and the
Rights Agent shall at any time and from time to time, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of any such Person); provided, however, that this
Agreement may not be supplemented or amended (A) to lengthen a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) to lengthen any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of any such Person). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding
any other provision hereof, the Rights Agent's consent must be obtained
regarding any amendment or supplement pursuant to this Section 27 which alters
the Rights Agent's rights or duties. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board (with, where specifically provided for herein,
the concurrence of two-thirds of the Directors) shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for herein,
the concurrence of two thirds of the 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, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including without limitation a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board (with, where specifically provided for herein, the
concurrence of two thirds of the 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 Persons, and (y) not subject any director to any liability
to the holders of the Rights.
36
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person other than
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Eligible Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of Eligible Stock).
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of shares of Eligible Stock.
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors determines in its good
faith judgment that severing the invalid language from this Agreement would
materially and adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the Close of Business on the tenth day following the date of
such determination by the Board.
SECTION 32. GOVERNING LAW.
This Agreement, each Right and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of such
State; provided, however, that the rights and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
Ohio.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts. It shall not be
necessary that the signature of or on behalf of each party appears on each
counterpart, but it shall be sufficient that the signature of or on behalf of
each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
37
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
REGENT COMMUNICATIONS, INC.
By: /s/ Terry S. Jacobs
-------------------------
Terry S. Jacobs,
Chief Executive Officer
FIFTH THIRD BANK
as Rights Agent
By: /s/ Geoffrey D. Anderson
----------------------------
Geoffrey D. Anderson,
Assistant Vice President
38
EXHIBITS
Exhibit A Certificate of Designation
Exhibit B Summary of Rights
Exhibit C Form of Rights Certificate
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES J JUNIOR
PARTICIPATING PREFERRED STOCK OF REGENT COMMUNICATIONS, INC.
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
Regent Communications, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Amended and Restated Certificate of Incorporation of the said Corporation, the
said Board of Directors on May 19, 2003 adopted the following resolution
creating a series of 100,000 shares of Preferred Stock designated as Series J
Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (the "Board") in accordance with
the provisions of its Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation"), a series of Preferred Stock of
the Corporation be and it hereby is created from the 33,231,138 shares
of preferred stock, par value $0.01 per share, authorized to be issued
pursuant to the Certificate of Incorporation, and that the designation
and amount thereof and the voting rights or powers, preferences and
relative, participating, optional and other special rights of the
shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series, par
value $0.01 per share, shall be designated as "Series J Junior Participating
Preferred Stock" and the number of shares constituting such series shall be one
hundred thousand (100,000). Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series J Junior Participating Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series J Junior Participating Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series J Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series J Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the 15th 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 first
issuance of a share or fraction of a share of Series J Junior Participating
Preferred
A-1
Stock, in an amount per share (rounded to the nearest cent) equal to, subject to
the provision for adjustment hereinafter set forth, 1,000 times the aggregate
per share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock, par value $0.01 per share, of
the Corporation (the "Common Stock"), or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common
Stock, since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series J Junior Participating Preferred
Stock. In the event the Corporation shall at any time after May 19, 2003 (the
"Rights Declaration Date") (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series J Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
on the Series J Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock.
(C) Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series J Junior Participating Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series J Junior
Participating Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series J Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series J Junior Participating Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series J Junior Participating Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
A-2
(B) Except as otherwise provided by law, the holders of shares of
Series J Junior Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) Except as set forth herein, holders of Series J Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends or distributions payable on the Series J
Junior Participating Preferred Stock as provided in Section 2 are not paid,
thereafter and until such dividends and distributions, whether or not declared,
on shares of Series J Junior Participating Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series J Junior Participating Preferred Stock; or
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series J Junior Participating Preferred Stock, except
dividends paid ratably on the Series J Junior Participating
Preferred Stock and all such parity stock on which dividends are
payable in proportion to the total amounts to which the holders of
all such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series J Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series J Junior
Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series J Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series J
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the
respective series or classes.
A-3
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series J Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series J Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series J Junior Participating
Preferred Stock shall have received $35,000 per share, plus any unpaid dividends
and distributions payable thereon, whether or not declared, to the date of such
payment (the "Series J Liquidation Preference"). Following the payment of the
full amount of the Series J Liquidation Preference, no additional distributions
shall be made to the holders of Series J Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series J Liquidation Preference by (ii) 1,000 (as appropriately
adjusted as set forth in subparagraph (C) below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii) immediately above being referred to as the
"Adjustment Number"). Following the payment of the full amount of the Series J
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series J Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series J Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to one (1) with respect to such Preferred Stock and Common Stock, on a
per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series J Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series J Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii)
A-4
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series J Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series J Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION. The Series J Junior Participating
Preferred Stock shall not be redeemable.
SECTION 9. RANKING. Notwithstanding anything contained herein to the
contrary, the Series J Junior Participating Preferred Stock shall rank junior to
all other series of the Corporation's Preferred Stock as to voting rights, the
payment of dividends and the distribution of assets in liquidation, unless the
terms of any such series shall provide otherwise.
SECTION 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner that would materially
alter or change the powers, preferences or special rights of the Series J Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least a majority of the outstanding shares
of Series J Junior Participating Preferred Stock, voting separately as a class.
SECTION 11. FRACTIONAL SHARES. Series J Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holders, in proportion to such holders fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series J Junior Participating Preferred Stock.
A-5
IN WITNESS WHEREOF, Regent Communications, Inc. caused this Certificate
of Designation to be signed this 19th day of May 2003.
REGENT COMMUNICATIONS, INC.
By: ____________________________
Name: __________________________
Title: _________________________
A-6
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE SERIES J JUNIOR PARTICIPATING PREFERRED STOCK
The Board of Directors of Regent Communications, Inc., a Delaware corporation
(the "Company"), has declared a dividend distribution of one right ("Right") for
each outstanding share of the Company's Common Stock (the "Eligible Stock"), as
of the close of business on the Record Date (as defined below). The distribution
is payable to stockholders of record on May 30, 2003 (the "Record Date"). Each
Right, when exercisable, entitles the registered holder to purchase from the
Company one-one thousandth of a share of Series J Junior Participating Preferred
Stock ("Preferred Stock") at a price of $35.00 per one-one thousandth share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and Fifth Third Bank, as Rights Agent (the "Rights Agent"). Initially,
the Rights will be attached to all certificates representing shares of Eligible
Stock then outstanding, and no separate certificates evidencing the Rights will
be distributed. The Rights will separate from the Eligible Stock and a
distribution of Rights Certificates (as defined below) will occur upon the
earlier to occur of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date") or (ii) 10
business days (or such later date as the Board of Directors of the Company may
determine) following the commencement of, or the first public announcement of
the intention to commence, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being called the
"Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the Eligible
Stock certificates, and will be transferred with and only with the Eligible
Stock certificates, (ii) new Eligible Stock certificates issued after May 30,
2003 upon transfer or new issuance of the Eligible Stock will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Eligible Stock outstanding will also constitute
the transfer of the Rights associated with the Eligible Stock represented by
such certificate.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on May 30, 2013, unless earlier redeemed or exchanged by
the Company as described below. The Rights will not be exercisable by a holder
in any jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights has not been obtained or
is not obtainable.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of the Eligible Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone will evidence the
Rights. Except as otherwise determined by the Board of Directors of the Company,
only shares of Eligible Stock issued prior to the Distribution Date will be
issued with Rights.
B-1
In the event that a Person becomes the beneficial owner of 15% or more of the
then outstanding shares of Common Stock (except in the limited circumstances set
forth in the Rights Agreement), each holder of a Right will, after the end of a
redemption period referred to below, have the right to exercise the Right by
purchasing, for an amount equal to the Purchase Price, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times such amount. Notwithstanding any of the foregoing,
following the occurrence of the events set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the events set forth
above until such time as the Rights are no longer redeemable by the Company as
set forth below.
For example, at a Purchase Price of $35.00 per Right, each Right not owned by an
Acquiring Person (or by certain related parties) following an event set forth in
the preceding paragraph would entitle its holder to purchase $70.00 worth of
Common Stock (or other consideration, as noted above) for $35.00. Assuming that
the Common Stock had a per share value of $10.00 at such time, the holder of
each valid Right would be entitled to purchase seven shares of Common Stock for
$35.00.
In the event that, at any time following the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation, or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth above) shall,
after the expiration of the redemption period referred to below, have the right
to receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right (e.g., common stock of the
acquiring company having a value of $70.00 for the $35.00 Purchase Price).
At any time after a person or group of affiliated or associated persons becomes
an Acquiring Person, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which have become void),
in whole or in part, at an exchange ratio of one share of Common Stock (or, in
certain circumstances, other equity securities of the Company which are deemed
by the Board of Directors of the Company to have the same value as shares of
Common Stock) per Right (subject to adjustment).
The Purchase Price payable, and the number of one-one thousandths of a share of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution under
certain circumstances.
In general, the Board of Directors of the Company, may cause the Company to
redeem the Rights in whole, but not in part, at any time during the period
commencing on May 19, 2003 and ending on the tenth day following the Stock
Acquisition Date (the "Redemption Period") at a price of $0.001 per Right
(payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors of the Company). Under certain circumstances set forth in the
Rights Agreements, the decision to redeem the Rights will require the
concurrence of two
B-2
thirds of the Directors. After the Redemption Period has expired, the Company's
right of redemption may be reinstated if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of Common Stock in
a transaction or series of transactions not involving the Company and there are
no other Acquiring Persons. Immediately upon the action of the Board of
Directors of the Company ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$0.001 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company, including, without limitation, the right to vote
or to receive dividends. Although the distribution of the Rights will not be
subject to federal taxation to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above.
* * *
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Current Report on Form 8-K. A copy of the Rights
Agreement is available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is incorporated herein by reference.
B-3
EXHIBIT C
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R-_______________ Rights
NOT EXERCISABLE AFTER MAY 30, 2013 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A
HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE ISSUANCE TO
SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION
SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] */
- -------------------
*/ The portion of the legend in brackets shall be inserted only if applicable -
and shall replace the preceding sentence.
Rights Certificate
This certifies that ________________________, or its registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of May 19, 2003, as the same may be amended from time to
time (the "Rights Agreement"), between Regent Communications, Inc., a Delaware
corporation (the "Company"), and Fifth Third Bank, an Ohio banking corporation,
as Rights Agent (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement")
and prior to May 30, 2013 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one-one
thousandth of a fully paid, non-assessable share of Series J Junior
Participating Preferred Stock, par value $0.01 per share (the "Preferred Stock")
of the Company, at a purchase price of $35.00 per one-one thousandth share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of shares
which may be purchased
C-1
upon exercise thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of May 19, 2003, based on the
Preferred Stock as constituted at such date, and are subject to adjustment upon
the happening of certain events as provided in the Rights Agreement.
From and after the occurrence of an event described in Section 11(a)(ii) of the
Rights Agreement, the Rights evidenced by this Rights Certificate beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of any such Person
(as such terms are defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person who,
concurrently with or after such transfer, became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
The Rights evidenced by this Rights Certificate shall not be exercisable, and
shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or be
obtainable.
As provided in the Rights Agreement, the Purchase Price and the number and kind
of shares of Preferred Stock or other securities, which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one-one thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $0.001 per Right at any time prior to the earlier of the close of business on
(i) the tenth day following the Stock Acquisition Date, and (ii) the Final
Expiration Date (as defined in the Rights Agreement). Under certain
circumstances set
C-2
forth in the Rights Agreement, the decision to redeem shall require the
concurrence of two-thirds of the Directors. After the expiration of the
redemption period, the Company's right of redemption may be reinstated if the
Acquiring Person reduces its beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company, and such reinstatement is approved by the Company's
Board of Directors.
At any time after a person becomes an Acquiring Person, the Board of Directors
of the Company may exchange the Rights (other than Rights owned by such
Acquiring Person which have become void), in whole or in part, at an exchange
ratio of one share of Common Stock (or, in certain circumstances, other equity
securities of the Company which are deemed by the Company's Board of Directors
to have the same value as shares of Common Stock) per Right (subject to
adjustment).
No fractional shares of Preferred Stock will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one-one thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by an authorized signatory of the Rights Agent.
C-3
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of _____________,_______
REGENT COMMUNICATIONS, INC.
By:__________________________
Name:________________________
Title:_______________________
By:__________________________
Name:________________________
Title:_______________________
Countersigned:
Dated as of _____________,_______
FIFTH THIRD BANK
as Rights Agent
By:______________________________
Authorized Signatory
C-4
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED __________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated:______________________
_____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in an "eligible guarantor
institution" as defined in Rule 17-Ad15 promulgated under the Securities
Exchange Act of 1934, as amended.
C-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did
[ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: ______________________
Signature ________________________________
Signature Guaranteed:
Signatures must be guaranteed by a participant in an "eligible guarantor
institution" as defined in Rule 17-Ad15 promulgated under the Securities
Exchange Act of 1934, as amended.
NOTICE
The signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
C-6
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights represented
by the Rights Certificate.)
To: Fifth Third Bank
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
- ------------------------------------------------------------------------------
(Please print name and address)
Please insert social security
or other identifying number: ___________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
- ------------------------------------------------------------------------------
(Please print name and address)
Please insert social security
or other identifying number: ___________________________
Dated: _________________
Signature ____________________________
Signature Guaranteed:
Signatures must be guaranteed by a participant in an "eligible guarantor
institution" as defined in Rule 17-Ad15 promulgated under the Securities
Exchange Act of 1934, as amended.
C-7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did
[ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person.
Dated: _______________________
Signature _____________________
Signature Guaranteed:
Signatures must be guaranteed by a participant in an "eligible guarantor
institution" as defined in Rule 17-Ad15 promulgated under the Securities
Exchange Act of 1934, as amended.
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
C-8