AMENDMENT NO. 1
TO
RIGHTS AGREEMENT
AMENDMENT NO. 1, dated as of January 16, 2003 (the
"Amendment"), to the Rights Agreement, dated as of March 6, 2002 (the
"Agreement"), between Citizens Communications Company, a Delaware corporation
(the "Company"), and Mellon Investors Services LLC, a New Jersey limited
liability company, as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on January 16, 2003, the Board of Directors of the
Company, in accordance with Section 27 of the Agreement, determined it to be
advisable and in the best interests of the Company and its stockholders to
supplement and amend the Agreement.
NOW THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Amendment to the Agreement. The definition of
"Acquiring Person" in Section 1(a) of the Agreement is hereby amended to read
in its entirety as follows:
"Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of fifteen percent
(15%) or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee
benefit plan of the Company, or 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, or (iv) any Person who becomes the
Beneficial Owner of fifteen percent (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 unless and until such Person, after
becoming aware that such Person has become the
Beneficial Owner of fifteen percent (15%) or more of the
then outstanding shares of Common Stock, acquires
beneficial ownership of additional shares of Common
Stock representing one percent (1%) or more of the
shares of Common Stock then outstanding, or (v) any
Person who has reported or is required to report such
ownership on Schedule 13D under the Securities Exchange
Act of 1934, as amended and in effect on the date hereof
(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), who
inadvertently becomes the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding (but
less than twenty percent (20%)), if 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 Stock in excess of
fourteen and nine-tenths percent (14.9%) inadvertently
or without knowledge of the terms of the Rights and who,
together with all Affiliates and Associates, thereafter
does not acquire additional shares of Common Stock while
the Beneficial Owner of fifteen percent (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 or breaches or
violates such certification, then such Person shall
become an Acquiring Person immediately after such
10-Business-Day period or such breach or violation, or
(vi) any Person who is eligible to report and has
reported such ownership on Schedule 13G under the
Exchange Act (or any comparable or successor report),
other than a Person who is eligible to report and has
reported such ownership on Schedule 13G pursuant to Rule
13d-1(c) under the Exchange Act, and who, together with
all Affiliates and Associates of such Person,
Beneficially Owns less than 20% of the then outstanding
shares of Common Stock; provided, however, that if such
Person subsequently reports such ownership on Schedule
13D and fails to reduce its ownership to below 15%
within 20 Business Days thereafter, then such Person
shall become an Acquiring Person immediately after the
expiration of such 20-Business-Day period, or (vii) any
Person referred to in clause (vi) above who
inadvertently becomes the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding (but
less than twenty two and one-half percent (22.5%)), if
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
Stock in excess of nineteen and nine-tenths percent
(19.9%) inadvertently or without knowledge of the terms
of the Rights and who, together with all Affiliates and
Associates, thereafter does not acquire additional
shares of Common Stock while the Beneficial Owner of
twenty percent (20%) 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 or breaches or violates such
certification, then such Person shall become an
Acquiring Person immediately after such 10-Business-Day
period or such breach or violation, provided, further,
that if such Person subsequently reports such ownership
on Schedule 13D and fails to reduce its ownership to
below 15% within 20 Business Days thereafter, then such
Person shall become an Acquiring Person immediately
after the expiration of such 20-Business-Day period.
Section 2. Amendment to Summary of Rights. The second
paragraph of the form of Summary of Rights to Purchase Preferred Stock set
forth in Exhibit C attached to the Agreement is hereby amended to read in its
entirety as follows:
"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
earliest to occur of (i) the tenth business day
following the date (the "Stock Acquisition Date") of the
first public announcement by the Company that any person
or group has become the beneficial owner of 15% or more
of the Common Stock then outstanding (other than (1) the
Company or any subsidiary of the Company, (2) any
employee benefit plan of the Company or any subsidiary,
(3) any persons who are eligible to report their
ownership on Schedule 13D (which such Schedule 13D does
not state any intention to or reserves the right to
control or influence the management or the 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) who inadvertently become the
beneficial owner of more than 15% of the Common Stock
(provided they beneficially own less than 20% of the
Common Stock) who certifies if requested by the Company
within 10 business days that it acquired more than 14.9%
of the Common Stock inadvertently or without knowledge
of the terms of the Rights and will not acquire
additional shares of Common Stock while the beneficial
owner of 15% or more of the Common Stock and (4) any
persons who are eligible to report and report their
ownership on Schedule 13G, other than persons who are
eligible to report and report such ownership on Schedule
13G pursuant to Rule 13d-1(c), and who beneficially own
less than 20% of the Common Stock then outstanding or
any such person who inadvertently become the beneficial
owner of more than 20% of the Common Stock (provided
they beneficially own less than 22.5% of the Common
Stock) who certifies if requested by the Company within
10 business days that it acquired more than 19.9% of the
Common Stock inadvertently or without knowledge of the
terms of the Rights and will not acquire additional
shares of Common Stock while the beneficial owner of 20%
or more of the Common Stock, provided, that if such
person subsequently files a Schedule 13D to report its
ownership, such person shall reduce its ownership to
below 15% within a period of 20 Business Days
thereafter), (ii) the tenth business day following the
commencement of a tender or exchange offer if, upon its
consummation, the offeror would become the beneficial
owner of 15% or more of the Common Stock then
outstanding, or (iii) a merger or other business
combination transaction involving the Company. 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."
Section 3. Agreement as Amended. The term "Agreement" as
used in the Agreement shall be deemed to refer to the Agreement as amended
hereby. This Amendment shall be effective as of the date hereof and, except as
set forth herein, the Agreement shall remain in full force and effect and be
otherwise unaffected hereby. In executing and delivering this Amendment, the
Rights Agent shall be entitled to all the privileges and immunities afforded
to the Rights Agent under the terms and provisions of the Agreement.
Section 4. Counterparts. This Amendment 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 5. Governing Law. This Amendment 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 to be made and to be performed entirely
within such State.
Section 6. Severability. If any term or provision of this
Amendment is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, the remainder of the terms and provisions
of this Amendment, and of the Agreement, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties have caused this Amendment
to be duly executed, all as of the day and year first above written.
Attest: Citizens Communications Company
By /s/ Virginia L. Coogle By /s/ L. Russell Mitten
Name: Virginia L. Coogle Name: L. Russell Mitten
Title: Asst. Secretary Title: Secretary
Mellon Investor Services LLC, as
Rights Agent
By /s/ Edgar Ambert
Name: Edgar Ambert
Title: Client Service Manager