EXHIBIT 4
RIGHTS AGREEMENT
Dated as of January 10, 2003
By and between
NTL INCORPORATED
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
TABLE OF CONTENTS
Page
Section 1. Certain
Definitions...............................................1
Section 2. Appointment of Rights
Agent.....................................................9
Section 3. Issuance of Rights
Certificates..............................................9
Section 4. Form of Rights
Certificates.............................................11
Section 5. Countersignature and
Registration.............................................12
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.............................................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights...................................................14
Section 8. Cancellation of Rights
Certificates.............................................16
Section 9. Reservation and Availability of Capital
Stock....................................................16
Section 10. Preferred Stock Record
Date.....................................................17
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights......................................18
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares...................................................26
Section 13. Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow or Earning Power...............................27
Section 14. Fractional Rights and Fractional
Shares...................................................29
Section 15. Rights of
Action...................................................31
Section 16. Agreement of Rights
Holders..................................................31
Section 17. Rights Certificate Holder Not Deemed a
Stockholder..............................................32
Section 18. Concerning the Rights
Agent....................................................32
Section 19. Merger or Consolidation or Change of Name of Rights
Agent....................................................33
Section 20. Duties of Rights
Agent....................................................33
Section 21. Change of Rights
Agent....................................................35
Section 22. Issuance of New Rights
Certificates.............................................36
Section 23. Redemption and
Termination..............................................37
Section 24.
Exchange.................................................38
Section 25. Notice of Certain
Events...................................................39
Section 26.
Notices..................................................40
Section 27. Supplements and
Amendments...............................................41
Section 28. Successors...............................................41
Section 29. Determinations and Actions by the Board of Directors of
the Company, etc.........................................41
Section 30. Benefits of this
Agreement................................................42
Section 31. Severability.............................................42
Section 32. Governing
Law......................................................42
Section 33.
Counterparts.............................................43
Section 34. Descriptive
Headings.................................................43
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EXHIBITS
Exhibit A -- Form of Amended and Restated Certificate of Incorporation
of NTL Incorporated
Exhibit B -- Form of Rights Certificate
Exhibit C -- Summary of Rights to Purchase Preferred Stock
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AGREEMENT, dated as of January 10, 2003 (this "Agreement"), by
and between NTL Incorporated, a Delaware corporation ("NTL" or the "Company"),
and Continental Stock Transfer & Trust Company, a New York corporation (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, pursuant to the Second Amended Joint Reorganization
Plan of NTL Incorporated ("Old NTL") and Certain Subsidiaries, dated July 15,
2002 and confirmed on September 5, 2002, as may be further amended and
restated from time to time (the "Plan") the businesses and investments of Old
NTL and certain of its subsidiaries were reorganized into two new groups, the
holding company for one of which is the Company;
WHEREAS, the issuance of up to 400 million shares of Common
Stock (as defined in Section 1) was authorized by Article IV.C.2.a.i. of the
Plan and the Amended and Restated Certificate of Incorporation of NTL,
substantially in the form attached hereto as Exhibit A (the "Amended and
Restated Certificate of Incorporation");
WHEREAS, Old NTL had a stockholder rights plan in effect
prior to the consummation of the Plan;
WHEREAS, the Company wishes to implement a stockholder
rights plan for the benefit and protection of the stockholders of the Company;
WHEREAS, on January 10, 2003 (the "Rights Dividend Declaration
Date"), the Company authorized and declared a dividend distribution of one
preferred share purchase right (a "Right") (as such number may be hereinafter
adjusted pursuant to Section 11(p) hereof) for each share of Common Stock
outstanding at the Close of Business (as defined in Section 1) on January 10,
2003 (the "Record Date"), each Right initially representing the right to
purchase, upon the terms and subject to the conditions set forth herein, one
one-thousandth (1/1,000) of a share of Preferred Stock (as defined in Section
1), having the rights, powers and preferences set forth in the Amended and
Restated Certificate of Incorporation, upon the terms and subject to the
conditions hereinafter set forth; and
WHEREAS, the Company has further authorized and directed the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding (whether originally issued or delivered from the Company's
treasury) after the Record Date and on or prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (each as
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties, intending to be legally
bound, 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 (x) any Person who or
which, together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include:
(i) the Company;
(ii) any Subsidiary of the Company;
(iii) any Person who would, but for this clause
(iii), become an Acquiring Person by virtue of acquiring shares of
Common Stock as a result of participation by such Person and such
Person's Affiliates and Associates in any dividend reinvestment plan,
stock option plan or other similar plan or arrangement of the Company
or its Subsidiaries or Affiliates; provided that such Person,
including such Person's Affiliates and Associates, does not acquire
thereafter any additional shares of Common Stock, exclusive of: (x)
shares of Common Stock acquired by such Person and such Person's
Affiliates and Associates as a result of stock dividends, stock
splits, recapitalizations or similar transactions in which the
Company did not receive any consideration for issuing the shares of
Common Stock; (y) shares of Common Stock acquired by such Person and
such Person's Affiliates and Associates as a result of devises,
bequests and intestate succession; and (z) shares of Common Stock
acquired by such Person and such Person's Affiliates and Associates
as a result of participation by such Person and such Person's
Affiliates and Associates in any dividend reinvestment plan, stock
option plan or other similar plan or arrangement of the Company or
its Subsidiaries or Affiliates;
(iv) any Person who becomes the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding as a
result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by the
Company other than at a time when the Rights are not redeemable,
unless and until such Person, after becoming aware that such Person
has become the Beneficial Owner of 15% or more of the then
outstanding shares of Common Stock, acquires beneficial ownership of
additional shares of Common Stock representing 1% or more of the
shares of Common Stock then outstanding;
(v) any Person who is the Beneficial Owner of less
than 20% of the shares of Common Stock then outstanding and has
reported or is required to report ownership on Schedule 13G under the
Exchange Act (or any comparable or successor report), or on Schedule
13D under the Exchange Act (or any comparable or successor report)
which Schedule 13D does not state any intention to or reserve the
right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of such
schedule (other than the disposition of the Common Stock) and, within
10 Business Days of being requested by the Company to advise it
regarding the same, certifies to the Company that such Person
acquired shares of Common
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Stock in excess of 14.9% inadvertently or without knowledge of the
terms of the Rights and who or which, together with all Affiliates
and Associates, thereafter does not acquire additional shares of
Common Stock (other than as a result of any stock dividend, stock
split, recapitalization or similar transaction) while the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding;
provided, however, that if the Person requested to so certify fails
to do so within 10 Business Days, then such Person shall become an
Acquiring Person immediately after such 10-Business-Day period;
(vi) any Person who is an NTL Grandfathered
Distributee, so long as such Person thereafter does not, while the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, acquire additional shares of Common Stock representing
one percent (1%) or more of the shares of Common Stock then
outstanding, unless any such acquisition of additional shares is
pursuant to (A) a stock dividend, stock split, recapitalization or
similar transaction or (B) a Qualified Offer (as defined in Section
11(a) (ii) hereof); provided, however, that such Person shall cease
to be excluded from the definition of Acquiring Person pursuant to
this clause (vi) at such time, if any, as such Person ceases to be
the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding; or
(vii) any Person, who or which together with all
Affiliates and Associates of such Person becomes the Beneficial Owner
of 15% or more of the then outstanding shares of Common Stock as a
result of the acquisition of shares of Common Stock directly from the
Company in a transaction approved by a majority of the disinterested
members of the Board of Directors of the Company, other than in a
transaction contemplated by clause (iii) above; or
(y) any Person who or which has entered into any agreement
or arrangement with the Company or any Subsidiary of the Company providing for
an Acquisition Transaction at a time when the Rights are not redeemable; or
(z) any Adverse Person (or any Affiliate or Associate
thereof).
(b) "Acquisition Transaction" shall mean (x) a merger,
consolidation or similar transaction involving the Company or any of its
Subsidiaries as a result of which stockholders of the Company shall no longer
own a majority of the outstanding shares of Common Stock of the Company or a
publicly traded entity which controls the Company or, if appropriate, the
entity into which the Company may be merged, consolidated or otherwise
combined (based solely on the shares of Common Stock received or retained by
such stockholders, in their capacity as stockholders of the Company, pursuant
to such transaction), (y) a purchase or other acquisition of all or a
substantial portion of the assets of the Company and its Subsidiaries or (z) a
purchase or other acquisition of securities representing 15% or more of the
shares of Common Stock then outstanding.
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(c) "Act" shall mean the Securities Act of 1933, as amended.
(d) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(e) "Adverse Person" shall mean any Person, who (x)(1) alone
or together with its Affiliates and Associates has become the Beneficial Owner
of an amount of shares of Common Stock which a majority of the Board of
Directors of the Company determines to be substantial (which amount shall in
no event be less than 10% of the shares of Common Stock then outstanding), or
(x)(2) is an NTL Grandfathered Distributee as of the Effective Date (as
defined in the Plan), but henceforth fails to satisfy one or more of the
criteria for an NTL Grandfathered Distributee set forth in the Plan as
determined in the sole and absolute discretion of the Board of Directors of
the Company, and (y) with respect to which a majority of the Board of
Directors of the Company has determined after reasonable inquiry and
investigation, including consultation with such Person as such directors shall
deem appropriate, that (a) such beneficial ownership by such Person is
intended to cause the Company to repurchase the shares of Common Stock
beneficially owned by such Person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions intended to
provide such Person with short-term financial gain under circumstances where
the Board of Directors of the Company determines that the best long-term
interests of the Company and its stockholders, would not be served by taking
such action or entering into such transaction or series of transactions at
that time or (b) such beneficial ownership is causing or is reasonably likely
to cause a material adverse impact (including, but not limited to, impairment
of relationships with customers or suppliers, impairment of the Company's
ability to maintain its competitive position, adverse consequences to the
communities in which the Company is located and impairment of the short-term
and long-term interests of the Company (including benefits that may accrue
from the continued independence of the Company) on the business or prospects
of the Company.
(f) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(g) "Agreement" shall have the meaning set forth in the
preamble of this Agreement.
(h) "Amended and Restated Certificate of Incorporation"
shall have the meaning set forth in the recitals of this Agreement.
(i) 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
4
upon the exercise of conversion rights, exchange rights, other
rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise of Rights
at any time prior to the occurrence of a Triggering Event (as
hereinafter defined), 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 accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act; (B) is not reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); and
(C) does not constitute a trust, proxy, power of attorney or other
device with the purpose or effect of allowing two or more Persons,
acting in concert, to avoid being deemed "beneficial owners" of such
security or otherwise avoid becoming an "Acquiring Person" under the
terms of this Agreement or as part of a plan or scheme to evade the
reporting requirements under Schedule 13D or Sections 13(d) or 13(g)
of the Exchange Act; 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 (i)) or disposing of
any voting securities of the Company;
provided, however, that nothing in this paragraph (i) 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 days after the date of such acquisition, and then only
if such securities continue to be owned by such Person at such expiration of
forty days; and provided further, however, that any stockholder of the
5
Company, with Affiliates(s), Associate(s) or other Person(s) who may be deemed
representatives of it serving as director(s) of the Company, shall not be
deemed to "beneficially own" securities held by other Persons as a result of
(i) Affiliates or Associates of such stockholder serving as directors or
taking any action in connection therewith, (ii) discussing the status of its
shares of Common Stock with the Company or other stockholders of the Company
similarly situated (subject to complying with the provisions of the Exchange
Act, including Section 14 thereof and the General Rules and Regulations
promulgated under the Exchange Act), or (iii) voting or acting in a manner
similar to other stockholders similarly situated, absent a finding by the
Board of Directors of the Company of an agreement among such stockholders to
act in concert with one another as stockholders so as to cause, in the good
faith judgment of the Board of Directors of the Company, each such stockholder
to be the Beneficial Owner of the shares of Common Stock held by the other
stockholder(s).
Notwithstanding anything in this definition to the contrary,
the phrase "then outstanding," when used in reference to the percentage of
shares of Common Stock beneficially owned by a Person or Persons, shall mean
the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person or Persons would be deemed to own beneficially hereunder.
(j) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(k) "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.
(l) "Common Stock" shall mean the common stock, par value
$0.01 per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(m) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(n) "Company" shall have the meaning set forth in the
preamble of this Agreement.
(o) "Current Market Price" shall have the meaning set forth
in Section 11(d)(i) hereof.
(p) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
6
(q) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(r) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(s) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(t) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(u) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(v) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(w) "NASDAQ" shall have the meaning set forth in Section
11(d)(i) hereof.
(x) "NTL" shall have the meaning set forth in the preamble
of this Agreement.
(y) "NTL Grandfathered Distributee" includes the following
Person as determined in the sole and absolute discretion of the Company and
the Creditors' Committee (as defined in the Plan) on the Effective Date in
accordance with the terms of the Plan: France Telecom; provided that no Person
shall be eligible to become an NTL Grandfathered Distributee after the
Effective Date.
(z) "Old NTL" shall have the meaning set forth in the
recitals of this Agreement.
(aa) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(bb) "Plan" shall have the meaning set forth in the recitals
of this Agreement.
(cc) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company, and,
to the extent that there are not a sufficient number of shares of Series A
Junior Participating Preferred Stock authorized to permit the full exercise of
the Rights, any other series of preferred stock of the Company designated for
such purpose containing terms substantially similar to the terms of the Series
A Junior Participating Preferred Stock.
(dd) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
7
(ee) "Purchase Date" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(ff) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(gg) "Qualified Offer" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(hh) "Record Date" shall have the meaning set forth in the
recitals of this Agreement.
(ii) "Redemption Price" shall have the meaning set forth in
Section 23(a)(i) hereof.
(jj) "Right" shall have the meaning set forth in the
recitals of this Agreement.
(kk) "Rights Agent" shall have the meaning set forth in the
preamble of this Agreement.
(ll) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(mm) "Rights Dividend Declaration Date" shall have the
meaning set forth in the recitals of this Agreement.
(nn) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(oo) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(ii) hereof.
(pp) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(qq) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(rr) "Stock Acquisition Date" shall mean the earlier of (i)
the first date of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed or amended pursuant to
Section 13(d) or Section 14(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such pursuant to clause
(x) of the definition of Acquiring Person other than pursuant to a Qualified
Offer and (ii) the date that an Acquiring Person has become such pursuant to
clause (y) or (z) of the definition of Acquiring Person.
8
(ss) "Subsidiary" shall mean, with reference to any Person,
any entity of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by such
Person.
(tt) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(uu) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(vv) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(ww) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
All references in this Agreement to acts, laws, rules,
regulations and to forms and schedules thereunder shall be deemed, unless
specifically stated, to be references to such acts, laws, rules, regulations,
forms and schedules as amended (or to successors thereof).
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable upon 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. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
Stock Acquisition Date and (ii) the Close of Business on the tenth Business
Day (or such later date as the Board of Directors of the Company shall
determine) after the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act,
or any successor provision thereto, if upon consummation thereof, such Person
would become an Acquiring Person, in either instance other than pursuant to a
Qualified Offer (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights shall be evidenced (subject to the
provisions of paragraphs (b) and (c) of this Section 3) by the certificates
for the Common Stock registered in the names of the holders of the Common
9
Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
shall be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company). The Company
shall give the Rights Agent prompt written notice of the Distribution Date. As
soon as practicable after the Distribution Date and receipt of written notice
of the Distribution Date from the Company, the Rights Agent shall send, at the
Company's expense, by first-class, insured, postage-prepaid mail, to each
record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially the form of Exhibit
B hereto (the "Rights Certificates"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the
Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates.
(b) The Company shall make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights to
Purchase Preferred Stock, in substantially the form attached hereto as Exhibit
C (as may be amended, the "Summary of Rights") to any holder of Rights who may
so request from time to time prior to the Expiration Date. With respect to
certificates for the Common Stock outstanding as of the Record Date, or issued
subsequent to the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date, the Rights shall be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date and the Expiration Date, the surrender or
transfer of any certificates representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the surrender or transfer
of the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear the
following legend if such certificates are issued after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER
HEREOF TO CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS
AGREEMENT BETWEEN NTL INCORPORATED (THE "CORPORATION") AND
THE RIGHTS AGENT THEREUNDER (THE "RIGHTS AGENT") DATED AS OF
JANUARY 10, 2003 (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH
ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE
CORPORATION.
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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 CORPORATION WILL MAIL TO THE HOLDER OF
THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN
EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE, PROMPTLY
AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR TO THE SECRETARY
OF THE CORPORATION. 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 and (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation
system on which the Rights may from time to time be listed or quoted, or to
conform to usage. Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates, whenever distributed, shall be dated as of
the Record Date and on their face shall entitle the holders thereof to
purchase such number of one one-thousandth 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 the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i) 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
11
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 the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the 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 THE RIGHTS
AGREEMENT.
The provisions of Section 7(e) of this Rights Agreement
shall be operative whether or not the foregoing legend is contained in any
such Rights Certificate. The Company shall supply the Rights Agent with such
legended Rights Certificates and shall instruct the Rights Agent accordingly.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by the Chairman of the Board of Directors, the President, the
Chief Financial Officer or any Vice President of the Company, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal
or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed 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 Certificate, 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 Certificate had not
ceased to be such officer of the Company; and any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
12
(b) Following the Distribution Date, the Rights Agent shall
keep, or cause to be kept, at its principal office or offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, 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 (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24
hereof) 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 entitles such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 14 and Section 24 hereof, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment by the holders
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
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 shall 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.
13
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, at any time after the
Distribution Date 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 upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-thousandths of a share (or other securities, cash
or other assets, as the case may be) as to which such surrendered Rights are
then exercisable, at or prior to the earlier of (i) 5:00 p.m., New York City
time, on January 10, 2013, or such later date as may be established by the Board
of Directors of the Company prior to the expiration of the Rights (such date,
as it may be extended by the Board of Directors of the Company, the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the "Redemption Date"), (iii) the time at which the
Rights are exchanged as provided in Section 24 hereof and (iv) the
consummation of a transaction contemplated by Section 13(d) hereof (the
earlier of (i), (ii), (iii) and (iv) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right initially shall
be $[ ](1), shall be subject to adjustment from time to time as provided in
Section 11 and Section 13(a) 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 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 other shares, securities, cash or other assets, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(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 for such shares) 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
- --------
(1) An amount equal to the product of (x) a multiple determined by the Board
of Directors of the Company and (y) (1) the Current Market Price of the Common
Stock post-consummation as determined pursuant to Section 11(d)(i) of the
Agreement (assuming the calculation is being made for purposes of Section
11(a)(iii) of the Agreement) or (y)(2) a value per share of Common Stock as
determined in the good faith judgment of the Board of Directors of the
Company.
14
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 shall direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or, upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder and (iv) after receipt thereof, deliver such cash, if any, to
or upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. 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 shall make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing 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 the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has 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 insure 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 any other
Person as a result of its failure to make any determinations with respect to
an Acquiring Person or any of its Affiliates, Associates or transferees
hereunder.
15
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it shall cause to
be reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Section 11(a)(ii) 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
Section 11(a)(ii) Event, Common Stock and/or other securities) that, as
provided in this Agreement, including Section 11(a)(iii) hereof, shall be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Section 11(a)(ii) Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange or automated quotation system, 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 or automated quotation system upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of
a Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Act, with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective
16
as soon as practicable after such filing and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities and (B) the date of the
expiration of the Rights. The Company shall 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 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. Upon 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 has been rescinded, in each
case with written notice to the Rights Agent. 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. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law, or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it shall 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 Section 11(a)(ii)
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 nonassessable.
(e) The Company further covenants and agrees that it shall
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one
one-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 which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of a number of one one-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) in respect of a name other than that of the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or 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 such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificates at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for a number of one one-thousandths of a share of
Preferred Stock (or
17
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 all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock
(or Common Stock and/or other securities, as the case may be) transfer books
of the Company are closed, such Person shall be deemed to have become the
record holder of such shares (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.
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
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock 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; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. 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.
18
(ii) In the event any Person shall, at any time after the
Rights Dividend Declaration Date, become an Acquiring Person, unless the event
causing such Person to become an Acquiring Person is a transaction set forth
in Section 13(a) hereof, or is an acquisition of shares of Common Stock
pursuant to a tender offer or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a majority of the
members of the Board of Directors of the Company who are not officers of the
Company and who are not Acquiring Persons or Persons who would become
Acquiring Persons as a result of the offer in question or representatives,
nominees, Affiliates or Associates of an Acquiring Person, after receiving
advice from one or more investment banking firms of national standing, to be
(a) at a price which is fair to stockholders and not inadequate (taking into
account all factors which such members of the Board of Directors of the
Company deem relevant, including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value), and (b) otherwise in the best
interests of the Company and its stockholders (a "Qualified Offer"), then,
promptly following the occurrence of such event, proper provision shall be
made so that each holder of a Right (except as provided below and in Section
7(e) hereof) shall, for a period of 90 days after the later of (x) the date of
occurrence of any such event or (y) the effective date of a registration
statement under the Act on an appropriate form pursuant to Section 9(c) hereof
(the date determined pursuant to (x) and (y) above shall be referred to as the
"Purchase Date"), have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, in lieu
of a number of one one-thousandths of a share of Preferred Stock, such number
of shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of 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 and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d) hereof) per share of Common Stock on the date of
such first occurrence (such number of shares, the "Adjustment Shares"). On or
immediately prior to the Purchase Date, the Company shall disseminate a press
release (and file such press release as an exhibit to a Current Report on Form
8-K (or the successor report thereto) setting forth in plain, understandable
terms the timing, mechanics and other material matters relating to the
occurrence of a Section 11(a)(ii) Event.
(iii) In the event that the number of treasury shares and
the number of shares of Common Stock which is authorized by the 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) of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares issuable upon the exercise of a
Right (the
19
"Current Value"), and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for the Adjustment Shares, upon
the 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, such as the Preferred Stock, which the Board of
Directors of the Company has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares of preferred stock
being referred to as "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 (less the amount of any reduction
in the Purchase Price), where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days
following the later of (x) the first occurrence of a Section 11(a)(ii) Event
and (y) the date on which the Company's right of redemption pursuant to
Section 23(a) hereof expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. For purposes of the preceding sentence,
the term "Spread" shall mean the excess of (i) the Current Value over (ii) the
Purchase Price. If the Board of Directors of the Company determines in good
faith that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights, the
30-day period set forth above may be extended to the extent necessary, but not
more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such 30-day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that action
should be taken pursuant to the first and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights and (2) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder approval for such
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of each Adjustment Share shall be the Current Market Price per share
of the Common Stock on the Section 11(a)(ii) Trigger Date and the per share or
per unit value of any Common Stock Equivalent shall be deemed to equal the
Current Market Price per share of the Common Stock on such date.
20
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Preferred Stock entitling them to subscribe for or purchase (for a period
expiring within 45 calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock or
Equivalent Preferred Stock) less than the Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock 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, 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); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon the exercise of one Right. In case such subscription price may be paid by
delivery of consideration, part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of 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 corporation), 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 evidences of indebtedness, or
of subscription rights or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Market Price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
21
Agent and shall be binding on the Rights Agent and the holders of the Rights)
of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a share
of Preferred Stock, and the denominator of which shall be such Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock. Such adjustments shall be made successively whenever such a record date
is fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of 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 30
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of 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 10
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of the Common Stock
is determined during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification shall not have occurred prior to the commencement of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, then,
and in each such case, the Current Market Price shall be properly adjusted to
take into account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers Automated Quotation System ("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
Common Stock selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board of Directors
of the Company shall be used. The term "Trading Day" shall mean a day on which
NASDAQ or the principal national securities exchange on which the shares of
Common Stock are not
22
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 NASDAQ or
any national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, Current Market Price per share shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(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, combinations 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, the Current
Market Price per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-thousandth
of a share of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three years from the date of the transaction
which mandates such adjustment and (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 property or securities other
than Preferred Stock, thereafter the number or amount of such other property
or securities 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
property or securities.
23
(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) hereof, 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 purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of one one-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 millionth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon
24
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 stated 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 nonassessable 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 (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board
of Directors of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly
for cash of any shares of Preferred Stock at less than the Current Market
Price, (iii) issuance wholly for cash of shares of Preferred Stock or
securities which by their terms are convertible into or exchangeable for
shares of Preferred Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets,
cash flow 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
25
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 shall 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 shall
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or
(iii) combine or consolidate the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common 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 Common Stock following any
such event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by
a fraction, the numerator which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event, and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. For purposes
of this Section 11(p), any shares of Common Stock issued after the
Distribution Date that were not issued together with a Right (pursuant to the
recitals hereto or by action of the Board of Directors of the Company pursuant
to Section 22 hereof) shall not be counted as outstanding. The adjustments
provided for in this Section 11(p) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(q) The exercise or expiration of Rights under Section
11(a)(ii) hereof shall only result in the loss of rights under Section
11(a)(ii) to the extent so exercised or expired and shall not otherwise affect
the rights represented by the Rights under this Rights Agreement, including
the rights represented by Section 13 hereof.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock, a copy of such certificate
and (c) if a Distribution Date has occurred, mail a brief
26
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.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets, Cash Flow or Earning Power.
(a) 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,
cash flow or earning power aggregating more than 50% of the assets, cash flow
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 thereafter
have the right to receive in lieu of Preferred Stock, 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 (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-thousandths of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share 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 of a Section 11(a)(ii)
Event), and (2) dividing that product (which, following the first occurrence
of a Section 13 Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the Current Market
Price (determined pursuant to Section 11(d)(i) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the
27
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 of the Company 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, cash flow 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 12 month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such
other Person, (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock 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 as determined pursuant to
Section 11(d)(i) hereof and (3) in case such Person is owned,
directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each
of the chains of ownership having an interest in such joint venture
as if such Person were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party at its own expense
shall:
28
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and shall use its
best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date;
(ii) take all such other action as may be necessary
to enable the Principal Party to issue the securities purchasable
upon exercise of the Rights, including but not limited to the
registration or qualification of such securities under all requisite
securities laws of jurisdictions of the various states and the
listing of such securities on such exchanges and trading markets as
may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. The rights under this Section
13 shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) hereof and shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock which is a Qualified Offer as such term is defined in Section
11(a)(ii) hereof (or a wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such transaction is not
less than the price per share of Common Stock paid to all holders of shares of
Common Stock whose shares were purchased pursuant to such tender offer or
exchange offer and (iii) the form (or election option, if more than one form
of consideration is available to stockholders generally, subject to applicable
proration provisions) of consideration being offered to the remaining holders
of shares of Common Stock pursuant to such transaction is the same as the form
(or election option, if more than one form of consideration was available to
stockholders generally, subject to applicable proration provisions) of
consideration paid pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(i) or
Section 11(p) hereof, or to distribute Rights
29
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price of the Rights for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights, selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used and shall be
conclusive.
(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). Fractions of shares of
Preferred Stock in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the sole election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it; provided that such agreement shall provide
that the holders of such depositary receipts shall have the rights, privileges
and preferences to which they are entitled as beneficial owners of the shares
of Preferred Stock represented by such depositary receipts. 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 a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to
30
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. For purposes of
this Section 14(c), the current market value of one share of Common Stock
shall be the closing price per share of Common Stock (as determined pursuant
to Section 11(d)(i) hereof) on 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 are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate (or, prior to the Distribution Date, of the Common
Stock) in the manner provided in such Rights Certificate (or, prior to the
Distribution Date, of the Common Stock) and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall be entitled
to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the
31
associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
reasonable best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
number of one one-thousandths of a share of Preferred Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 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. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed to 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
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim (whether asserted by the Company, a
holder of Rights, or any other Person) of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with
32
its administration of this Agreement in reliance upon any Rights Certificate
or certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, 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 and, where necessary, to
be verified or acknowledged.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to all or substantially all the corporate trust, stock transfer or
other stockholder services 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; but only if such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) the Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion;
33
(b) whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board of Directors of the Company, the
President, the Chief Financial Officer, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon and in
accordance with such certificate;
(c) the Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct;
(d) the Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only;
(e) the Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11, Section 13 or Section 24 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock shall, when so issued,
be validly authorized and issued, fully paid and nonassessable;
(f) the Company agrees that it shall perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) the Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board of Directors of the Company, the President, the
Chief Financial
34
Officer, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer;
(h) the Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity;
(i) the Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents as approved by the Company,
and the Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or misconduct;
provided, however, reasonable care was exercised by the Rights Agent in the
selection and continued employment thereof;
(j) no provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it; and
(k) if, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
an authorized officer of the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and, if such resignation occurs after the Distribution Date,
to the registered holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and, if such removal occurs
after the Distribution Date, 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 satisfactorily performing its duties hereunder,
the Company shall appoint a successor to
35
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by the
Company), then the Rights Agent or any registered holder of any Rights
Certificate may apply, at the expense of the Company, to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a legal business entity organized and doing business under the
laws of the United States or of the State of New York or of any other state of
the United States, in good standing, having an office in the State of New
York, which is authorized under such laws to exercise corporate trust, stock
transfer or stockholder services powers and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000, or (b) an affiliate of a legal business entity described in
clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as
if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and, if
such appointment occurs after the Distribution Date, 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 of Directors of
the Company to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, granted or awarded as of the
Distribution Date, 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 of Directors of the Company, 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.
36
Section 23. Redemption and Termination
(a) (i) The Board of Directors of the Company may, at its
option, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend, combination,
recapitalization or similar transaction occurring after the date of this
Agreement (such redemption price being hereinafter referred to as the
"Redemption Price"), at any time prior to the earlier of (x) the occurrence of
a Section 11(a)(ii) Event and (y) the Final Expiration Date. 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 of Directors
of the Company. In addition, the Board of Directors of the Company may, at its
option, at any time following the occurrence of a Section 11(a)(ii) Event and
the expiration of any period during which the holder of Rights may exercise
the rights under Section 11(a)(ii) but prior to any Section 13 Event redeem
all but not less than all of the then outstanding Rights at the Redemption
Price (x) in connection with any merger, consolidation or sale or other
transfer (in one transaction or in a series of related transactions) of
assets, cash flow or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole), in which
all holders of shares of Common Stock are treated alike and not involving
(other than as a holder of Common Stock being treated like all other such
holders) an Acquiring Person or any Affiliate or Associate of an Acquiring
Person or (y)(1) if and for so long as the Acquiring Person is not thereafter
the Beneficial Owner of 15% of the shares of Common Stock and (2) at the time
of redemption, no other Persons are Acquiring Persons.
(ii) Notwithstanding anything in this Section 23(a)
to the contrary, in the case the Company is not permitted to pay the
Redemption Price under the terms of any agreement or instrument
evidencing indebtedness for borrowed money of the Company or any
Subsidiary, currently in existence or entered into after the date of
this Agreement, the payment of the Redemption Price shall be deferred
until such time as such payment becomes permitted under the terms of
any such agreement or instrument; provided, however, that such
deferral shall not, in any way, affect the right and ability of the
Board of Directors of the Company to redeem the Rights.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights shall terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held as described in Section 23(a) hereof.
Promptly after the action of the Board of Directors of the Company ordering
the redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent 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
shall state the method by which the payment of the Redemption Price shall be
made. The Company may mail payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of
37
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent of the shares of Common Stock, and upon such action, all
outstanding Rights and Rights Certificates shall be null and void without any
further action by or on behalf of the Company.
(c) Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 and other
than in connection with the purchase or repurchase by any of them of Common
Stock prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend, combination, recapitalization or similar transaction occurring after
the date of this Agreement (such exchange ratio being hereinafter referred to
as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors of the Company shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company 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 shall state the method by which the exchange of the Common Stock
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which shall be exchanged. Any partial
38
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.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11
hereof) for all or a portion of the Common Stock exchangeable for Rights, at
the initial rate of one one-thousandth of a share of Preferred Stock (or
Equivalent Preferred Stock) for each share of Common Stock, as appropriately
adjusted to reflect stock splits, stock dividends, combinations,
recapitalizations and other similar transactions occurring after the date of
this Agreement.
(d) In the event that there shall not be sufficient shares
of 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 of Common Stock,
there shall be paid to the registered holders of the Rights Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subsection
(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)(i) 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 of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the
assets, cash flow or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution
39
or winding up of the Company, then, in each such case, the Company shall 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 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 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 the date of
participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate 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 by the Company with the Rights Agent) as follows:
NTL Incorporated
110 East 59th Street
26th Floor
New York, New York 10022
Attention: General Counsel
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Rights Agent with
the Company) as follows:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attention: Compliance Department
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to
40
the Distribution Date, to the holder of certificates representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, and subject to the
provisions of Section 27(b) hereof, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing shares of
Common Stock. From and after the Distribution Date, and subject to the
provisions of Section 27(b) hereof, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (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 an Acquiring Person); provided, however, that this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable or (B) any other time period
unless any such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights under
this Agreement. 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. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
(b) Notwithstanding anything herein to the contrary, no
supplement or amendment shall be made to this Agreement at a time when the
Rights are not redeemable, except as contemplated by clause (i) or (ii) of
Section 27(a) hereof.
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 of
Directors of the Company, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock or any other class of
capital 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 of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights
41
and powers specifically granted to such Board of Directors or to the Company,
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret and/or
clarify the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not to redeem the Rights or to amend
or supplement this Agreement and whether any proposed amendment adversely
affects the interests of the holders of Rights Certificates). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing),
which are done or made by the Board of Directors of the Company in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties and (y) not subject the Board
of Directors of the Company, or any of the directors of the Board of Directors
to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 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 of the Company determines in its good
faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth Business Day following the
date of such determination by the Board of Directors of the Company. Without
limiting the foregoing, if any provision requiring a specific group of
directors to act is held to by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall then
be made by the Board of Directors of the Company in accordance with applicable
law and the Amended and Restated Certificate of Incorporation and By-laws of
the Company.
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 applicable to
contracts made and to be performed entirely within 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 New York. The
parties hereto hereby waive the right to a jury trial in any action
42
arising out of this Agreement. Any dispute arising out of this Agreement shall
be litigated in the borough of Manhattan, New York City, New York, and the
parties hereby submit to the jurisdiction of such courts and acknowledge that
such courts are a convenient forum.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
43
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first above written.
NTL INCORPORATED
By: /s/ Richard J. Lubasch
----------------------------------------
Name: Richard J. Lubasch
Title: Executive Vice President,
General Counsel and Secretary
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ William F. Seegraber
----------------------------------------
Name: William F. Seegraber
Title: Vice President
44
Exhibit A
FORM OF AMENDED AND RESTATED
CERTIFICATION OF INCORPORATION OF NTL COMMUNICATIONS CORP.
(see attached)
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER January 10, 2013 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS 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.](2)
Rights Certificate
NTL INCORPORATED
This certifies that ______________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of January 10, 2003 (the "Rights
Agreement"), between NTL Incorporated, a Delaware corporation (the "Company"),
and Continental Stock Transfer & Trust Company, a New York corporation (the
"Rights Agent"), to purchase from the Company at any time prior to 5:00 p.m.
(New York City time) on January 10, 2013 (unless such date is extended prior
thereto by the Board of Directors of the Company) 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 A
Junior Participating Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), of the
- --------
(2) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Company, at a purchase price of $[ ](3) per one one-thousandth of a share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly executed.
The number of Rights evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of [ ] [ ], 2[ ], based on the Preferred Stock as constituted at such date.
The Company reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights Agreement) that a
number of Rights be exercised so that only whole shares of Preferred Stock
will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a Person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one
one-thousandths of a share of Preferred Stock as the Rights evidenced by the
- --------
(3) An amount equal to the product of (x) a multiple determined by the Board of
Directors of the Company and (y) (1) the Current Market Price of the Common
Stock post-consummation as determined pursuant to Section 11(d)(i) of the
Agreement (assuming the calculation is being made for purposes of Section
11(a)(iii) of the Agreement) or (y)(2) a value per share of Common Stock as
determined in the good faith judgment of the Board of Directors of the
Company.
2
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 $0.01 per Right at any time prior to the
earlier of (x) the occurrence of a Section 11(a)(ii) Event and (y) the Final
Expiration Date. In addition at any time after any Person becomes an Acquiring
Person, under certain circumstances, the Rights may be exchanged, in whole or
in part, for shares of Common Stock, or shares of preferred stock of the
Company having essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors of the Company
authorizing any such exchange, and without any further action or any notice,
the Rights (other than Rights which are not subject to such exchange) will
terminate and the Rights will only enable holders to receive the shares
issuable upon such exchange.
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. The Company, at its election, may require that a number of
Rights be exercised so that only whole shares of Preferred Stock would be
issued.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any 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 consent to or withhold consent from any
corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
3
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
ATTEST: NTL INCORPORATED
By: By:
-------------------------------- -------------------------------
Name: Name:
Title: Title:
Countersigned:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By: Dated: _____________, ____
--------------------------------
Authorized Officer
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:
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); and
(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 an Acquiring Person.
Dated: _______________, ___
--------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the Form of 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.
In the event the certification set forth above in the Form of Assignment is
not completed, the Company and the Rights Agent will deem the Beneficial Owner
of the Rights evidenced by this Rights Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment will not be honored.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate)
To: NTL INCORPORATED
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be issuable
upon the exercise of the Rights) and requests that certificates for such
shares be issued in the name of and delivered to:
Please insert social security or other identifying number:
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
______________________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the balance
of such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
______________________________________________________________________________
Dated: _______________, ____
_____________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: ________, ____ ________________________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the Form of 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. In the event the certification set forth above in the
Form of Election to Purchase is not completed, the Company and the Rights
Agent will deem the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and such Election to Purchase
will not be honored.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On January 10, 2003, NTL Incorporated (the "Company") declared
a dividend distribution of one Right for each outstanding share of common
stock, par value $0.01 per share, of the Company (the "Common Stock") to
stockholders of record at the Close of Business on January 10, 2003 (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company
a unit consisting of one one-thousandth of a share (a "Unit") of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the
Company (the "Series A Preferred Stock") at a Purchase Price of $[ ](1) per
Unit, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company and
Continental Stock Transfer & Trust Company, Inc., as Rights Agent. Capitalized
terms used but not defined in this Summary shall have the meanings ascribed
thereto in the Rights Agreement.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in
the Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) the close of business on
the day of a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding shares of Common Stock other than as a
result of (w) repurchases of stock by the Company, (x) certain acquisitions of
shares of Common Stock from the Company, (y) certain inadvertent actions by
institutional or certain other stockholders or (z) the beneficial ownership by
an NTL Grandfathered Distributee of 15% or more of the outstanding shares of
Common Stock as of January 10, 2003, or the date a Person has entered into an
agreement or arrangement with the Company or any Subsidiary of the Company
providing for an Acquisition Transaction (the "Stock Acquisition Date"), and
(ii) 10 business days (or such later date as the Board of Directors of the
Company shall determine) following the commencement of a tender offer or
exchange offer that would result in a person or group becoming an Acquiring
Person.
An Acquisition Transaction is defined in the Rights
Agreement as (x) a merger, consolidation or similar transaction involving the
Company or any of its Subsidiaries as a result of which stockholders of the
Company will no longer own a majority of the outstanding shares of Common
Stock of the Company or a publicly traded
- --------
(1) An amount equal to the product of (x) a multiple determined by the Board of
Directors of the Company and (y) (1) the Current Market Price of the Common
Stock post-consummation as determined pursuant to Section 11(d)(i) of the
Agreement (assuming the calculation is being made for purposes of Section
11(a)(iii) of the Agreement) or (y)(2) a value per share of Common Stock as
determined in the good faith judgment of the Board of Directors of the
Company.
entity which controls the Company or, if appropriate, the entity into which
the Company may be merged, consolidated or otherwise combined (based solely on
the shares of Common Stock received or retained by such stockholders, in their
capacity as stockholders of the Company, pursuant to such transaction), (y) a
purchase or other acquisition of all or a substantial portion of the assets of
the Company and its Subsidiaries or (z) a purchase or other acquisition of
securities representing 15% or more of the shares of Common Stock then
outstanding.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
Pursuant to the Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date
and will expire at 5:00 p.m. (New York City time) on January 10, 2013, unless
such date is extended or the Rights are earlier redeemed or exchanged by the
Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
Close of Business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights. Only shares of Common
Stock issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person,
except pursuant to an offer for all outstanding shares of Common Stock which
the independent directors determine to be fair and not inadequate and to
otherwise be in the best interests of the Company and its stockholders, after
receiving advice from one or more investment banking firms of national
standing (a "Qualified Offer"), each holder of a Right will thereafter have
the right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a
value equal to two times the exercise price of the Right. Notwithstanding any
of the foregoing, following the occurrence of the event 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 (or any
Affiliate or Associate thereof) will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company as set forth below.
For illustrative purposes only, at an exercise price of
$60.00 per Right, each Right not owned by an Acquiring Person (or any
Affiliate or Associate thereof) following an event set forth in the preceding
paragraph would entitle its holder to
2
purchase $120.00 worth of Common Stock (or other consideration, as noted
above) for $60.00. Assuming that the Common Stock had a per share value of
$20.00 at such time, the holder of each valid Right would be entitled to
purchase 12 shares of Common Stock for $120.00. The foregoing example is for
illustrative purposes only and is not a representation, guaranty or prediction
of the future trading value of Common Stock or the circumstances under which
the Rights may be validly exercised, if ever.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving corporation
(other than with a Person that acquired the shares pursuant to a Qualified
Offer), (ii) the Company engages in a merger or other business combination
transaction in which the Company is the surviving corporation and the Common
Stock of the Company is changed or exchanged (other than with a Person that
acquired the shares pursuant to a Qualified Offer), or (iii) 50% or more of
the Company's assets, cash flow or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events."
At any time after a Person becomes an Acquiring Person and
prior to the acquisition by such Person of fifty percent (50%) or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Person which have become
void), in whole or in part, for Common Stock at an exchange ratio of one share
of Common Stock, or one one-thousandth of a share of Preferred Stock (or of a
share of a class or series of preferred stock having equivalent rights,
preferences and privileges as the shares of Preferred Stock), per Right
subject to adjustment.
The Purchase Price payable, and the number of Units 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 (i) in
the event of a stock dividend on, or a stock split, subdivision, combination
or reclassification of, the Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading date prior to the date of exercise.
3
At any time until a Person becomes an Acquiring Person
(other than in connection with a Qualified Offer), the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by the Board of
Directors of the Company). 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
$0.01 per Right redemption price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the distribution
of the Rights should not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income
in the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company, or
in the event of the redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company in order to cure any ambiguity, to
make changes which do not adversely affect the interests of holders of Rights,
or to shorten or lengthen any time period under the Rights Agreement, except
that the Rights Agreement may not be supplemented or amended to lengthen (1) a
time period relating to when the Rights may be redeemed at such time as when
the Rights are not then redeemable or (2) any other time period unless any
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights under the Rights
Agreement. The foregoing notwithstanding, no amendment may be made to the
Rights Agreement at a time when the Rights are not redeemable, except to cure
any ambiguity or correct or supplement any provision contained in the Rights
Agreement which may be defective or inconsistent with any other provision
therein.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A dated January 10, 2003. 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.
4