TRIBUNE COMPANY
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
Rights Agent
Rights Agreement
Dated as of December 12, 1997
____________________________________________________________
TABLE OF CONTENTS
Page
Section 1. Definitions............................... 1
Section 2. Appointment of Rights Agent............... 8
Section 3. Issue of Right Certificates............... 9
Section 4. Form of Right Certificates................ 12
Section 5. Countersignature and Registration......... 13
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates............... 14
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights............... 16
Section 8. Cancellation and Destruction of
Right Certificates...................... 18
Section 9. Reservation and Availability of Preferred
Shares.................................. 19
Section 10. Preferred Shares Record Date.............. 20
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights.............. 21
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares..................... 36
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.............. 36
Section 14. Fractional Rights and Fractional Shares... 38
Section 15. Rights of Action.......................... 41
Section 16. Agreement of Right Holders................ 42
Section 17. Right Certificate Holder Not Deemed a
Stockholder............................. 00
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Xxxxxxx 00. Concerning the Rights Agent............... 44
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.................... 45
Section 20. Duties of Rights Agent.................... 46
Section 21. Change of Rights Agent.................... 50
Section 22. Issuance of New Right Certificates........ 52
Section 23. Redemption................................ 52
Section 24. Exchange.................................. 54
Section 25. Notice of Certain Events.................. 57
Section 26. Notices................................... 59
Section 27. Supplements and Amendments................ 60
Section 28. Successors................................ 60
Section 29. Benefits of this Rights Agreement......... 61
Section 30. Severability.............................. 61
Section 31. Governing Law............................. 61
Section 32. Counterparts.............................. 61
Section 33. Descriptive Headings...................... 62
Signatures............................................ 63
Exhibit A - Form of Amended and Restated Certificate of
Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred
Shares
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Agreement, dated as of December 12, 1997, between
Tribune Company, a Delaware corporation (the "Company"), and
First Chicago Trust Company of New York (the "Rights Agent").
The Board of Directors of the Company has autho-
rized and declared a dividend of one preferred share purchase
right (a "Right") for each Common Share of the Company out-
standing on January 5, 1998 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a
Preferred Share, upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that
shall become outstanding between the Record Date and the ear-
liest of the Distribution Date, the Redemption Date and the
Final Expiration Date.
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
Section 1. Definitions. For purposes of this
Rights Agreement, the following terms have the meanings indi-
cated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 10% or more of the
Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary of the Company, any em-
ployee benefit plan of the Company or any Subsidiary of the
Company, any entity holding Common Shares for or pursuant to
the terms of any such plan, the Xxxxxx X. XxXxxxxxx Tribune
Foundation (the "XxXxxxxxx Foundation"), the Cantigny Founda-
tion, or any charitable trust, corporation, foundation, or-
ganization or similar entity or entities succeeding to one or
both of the XxXxxxxxx Foundation or the Cantigny Foundation
or any substantial part thereof (together with the XxXxxxxxx
Foundation and the Cantigny Foundation, the "Foundations").
Notwithstanding the foregoing, no Person shall become an "Ac-
xxxxxxx Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of Common
Shares of the Company outstanding, increases the proportion-
ate number of Common Shares of the Company beneficially owned
by such Person to 10% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 10% or more of the Com-
mon Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share pur-
chases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person". Notwithstanding
the foregoing, if the Board of Directors of the Company de-
termines in good faith that a Person who would otherwise be
an "Acquiring Person", as defined pursuant to the foregoing
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provisions of this paragraph (a), has become such inadvert-
ently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would
no longer be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Rights Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities Ex-
change Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any Secu-
rities:
(i) which such Person or any of such Person's Af-
filiates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's Af-
filiates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
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group members with respect to a bona fide public offer-
ing of Securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Benefi-
cial Owner of, or to beneficially own, Securities ten-
dered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Af-
filiates or Associates until such tendered Securities
are accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or under-
standing; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
any Security if the agreement, arrangement or under-
standing to vote such Security (1) arises solely from a
revocable proxy or consent given to such Person in re-
sponse to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D un-
der the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or in-
directly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
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agreement, arrangement or understanding (other than cus-
tomary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of Securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any
Securities of the Company.
Notwithstanding anything in this definition of Ben-
eficial Ownership to the contrary, the phrase "then outstand-
ing," when used with reference to a Person's Beneficial Own-
ership of Securities of the Company, shall mean the number of
such Securities then issued and outstanding together with the
number of such Securities not then actually issued and out-
standing which such Person would be deemed to own benefi-
cially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a 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.
(e) "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.
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(f) "Common Shares" when used with reference to
the Company shall mean the shares of common stock, without
par value, of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Sub-
sidiary of another Person, the Person or Persons which ulti-
mately control such first-mentioned Person.
(g) "Company" shall have the meaning set forth in
the preamble hereof.
(h) "current per share market price" shall have
the meaning set forth in Section 11(d) hereof.
(i) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(j) "equivalent preferred shares" shall have the
meaning set forth in Section 11(b) hereof.
(k) "Exchange Act" shall have the meaning set
forth in Section 1(b) hereof.
(l) "Exchange Ratio" shall have the meaning set
forth in Section 24(a) hereof.
(m) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
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(n) "Foundations" shall have the meaning set forth
in Section 1(a) hereof.
(o) "XxXxxxxxx Foundation" shall have the meaning
set forth in Section 1(a) hereof.
(p) "NASDAQ" shall mean the National Association
of Securities Dealers, Inc. Automated Quotation System.
(q) "Person" shall mean any individual, firm, cor-
poration or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(r) "Preferred Shares" shall mean shares of Series
A Junior Participating Preferred Stock, without par value, of
the Company having the rights and preferences set forth in
the Form of Certificate of Designations attached to this
Rights Agreement as Exhibit A.
(s) "Purchase Price" shall have the meaning set
forth in Section 4 hereof.
(t) "Record Date" shall have the meaning set forth
in the second paragraph hereof.
(u) "Redemption Date" shall have the meaning set
forth in Section 7(a) hereof.
(v) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
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(w) "Right" shall have the meaning set forth in
the second paragraph hereof.
(x) "Right Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(y) "Rights Agent" shall have the meaning set
forth in the preamble hereof.
(z) "Security" shall have the meaning set forth in
Section 11(d) hererof.
(aa) "Shares Acquisition Date" shall mean the
first date of public announcement by the Company or an Ac-
xxxxxxx Person that an Acquiring Person has become such.
(bb) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
(cc) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
(dd) "Trading Day" shall have the meaning set forth
in Section 11(d) hereof.
Section 2. Appointment of Rights Agent. The Com-
pany hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance
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with Section 3 hereof, shall, prior to the Distribution Date,
also be the holders of the Common Shares of the Company) in
accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such co-Rights Agents as it may
deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Un-
til the earlier of (i) the tenth day after the Shares Acqui-
sition Date or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors
of the Company prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement of, or
the announcement of an intention to commence, 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, any entity holding Common Shares of the Company
for or pursuant to the terms of any such plan, or the Founda-
tions), a tender or exchange offer the consummation of which
would result in any Person becoming the Beneficial Owner of
Common Shares of the Company aggregating 10% or more of the
then outstanding Common Shares of the Company (including any
such date which is after the date of this Rights Agreement
and prior to the issuance of the Rights; the earlier of such
dates being the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof)
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by the certificates for Common Shares of the Company regis-
tered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the right to receive
Right Certificates will be transferable only in connection
with the transfer of Common Shares of the Company. As soon
as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares
of the Company as of the Close of Business on the Distribu-
tion Date, at the address of such holder shown on the records
of the Company, a Right Certificate, in substantially the
form of Exhibit B hereto, evidencing one Right for each Com-
mon Share so held (a "Right Certificate"). As of the Distri-
bution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) As soon as reasonably practicable following
the Record Date, the Company will send a copy of a Summary of
Rights to Purchase Preferred Shares, in substantially the
form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of
Common Shares of the Company as of the Close of Business on
the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for
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Common Shares of the Company outstanding as of the Record
Date, until the Distribution Date, the Rights will be evi-
denced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights
attached thereto. Until the Distribution Date (or the ear-
lier of the Redemption Date or the Final Expiration Date),
the surrender for transfer of any certificate for Common
Shares of the Company outstanding on the Record Date, with or
without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated
with the Common Shares of the Company represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph
(c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expira-
tion Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agree-
ment between Tribune Company and First Chicago Trust
Company of New York, dated as of December 12, 1997 (the
"Rights Agreement"), the terms of which are hereby in-
corporated herein by reference and a copy of which is on
file at the principal executive offices of Tribune Com-
pany. Under certain circumstances, as set forth in the
Rights Agreement, such Rights (as defined in the Rights
Agreement) will be evidenced by separate certificates
and will no longer be evidenced by this certificate.
Tribune Company will mail to the holder of this certifi-
cate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain
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circumstances, as set forth in the Rights Agreement,
Rights issued to any Person (as defined in the Rights
Agreement) who becomes an Acquiring Person (as defined
in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares of the Company represented by such
certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with
the Common Shares of the Company represented thereby. In the
event that the Company purchases or acquires any Common
Shares of the Company after the Record Date but prior to the
Distribution Date, any Rights associated with such Common
Shares of the Company shall be deemed cancelled and retired
so that the Company shall not be entitled to exercise any
Rights associated with the Common Shares of the Company which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as 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 Rights Agreement, or as may be
required to comply with any applicable law or with any rule
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or regulation made pursuant thereto or with any rule or regu-
lation of any stock exchange or automated quotation system on
which the Rights may from time to time be listed, or to con-
form to usage. Subject to the provisions of Section 22
hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein
(the "Purchase Price"), but the number of such one one-
hundredths of a Preferred Share and the Purchase Price shall
be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer,
its President, any of its Vice Presidents or its Treasurer,
either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by the
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Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the ex-
ecution of such Right Certificate, shall be a proper officer
of the Company to sign such Right Certificate, although at
the date of the execution of this Rights Agreement any such
person was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books
for registration and transfer of the Right Certificates is-
sued hereunder. Such books shall show the names and ad-
dresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certifi-
xxxxx.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec-
tion 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Busi-
ness on the earlier of the Redemption Date or the Final Expi-
ration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have
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become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be trans-
ferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a
Preferred Share as the Right Certificate or Right Certifi-
xxxxx surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certifi-
xxxxx to be transferred, split up, combined or exchanged at
the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the person en-
titled thereto a Right Certificate or Right Certificates, as
the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's re-
quest, reimbursement to the Company and the Rights Agent of
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all reasonable expenses incidental thereto, and upon sur-
render to the Rights Agent and cancellation of the Right Cer-
tificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Cer-
tificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) The registered holder of any
Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein), in whole or in part,
at any time after the Distribution Date, upon surrender of
the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent, together
with payment of the Purchase Price for each one one-hundredth
of a Preferred Share as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on
January 5, 2008 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), or (iii) the time at which
such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth
of a Preferred Share purchasable pursuant to the exercise of
a Right shall initially be $250, and shall be subject to ad-
justment from time to time as provided in Section 11 or 13
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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 Right Certificate represent-
ing exercisable Rights, with the form of election to purchase
duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes any such transfer agent to comply with all such
requests, or (B) requisition from the depositary agent de-
positary receipts representing such number of one one-
hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent of
the Preferred Shares with such depositary agent) and the Com-
pany hereby directs such depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of frac-
tional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order
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of the registered holder of such Right Certificate, regis-
tered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certifi-
cate or to such holders' duly authorized assigns, subject to
the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or ex-
change shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and re-
tirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Com-
pany otherwise than upon the exercise thereof. The Rights
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Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preferred Shares. The
Company covenants and agrees that it will cause to be re-
served and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its trea-
sury, the number of Preferred Shares that will be sufficient
to permit the exercise in full of all outstanding Rights in
accordance with Section 7 hereof. The Company covenants and
agrees that it will take all such action as may be necessary
to ensure that all Preferred Shares delivered upon exercise
of Rights shall, at the time of delivery of the certificates
for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully
paid and nonassessable shares.
The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any
Preferred Shares 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
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Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the Pre-
ferred Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is
due.
Section 10. Preferred Shares Record Date. Each
person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have be-
come the record holder of such shares on, and such certifi-
cate shall be dated, the next succeeding Business Day on
which the Preferred Shares transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby,
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the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares for which the
Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distribu-
tions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Com-
pany, except as provided herein.
Section 11. Adjustment of Purchase Price, Number
of Shares or Number of Rights. The Purchase Price, the num-
ber of Preferred 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 Rights Agreement (A) declare a
dividend on the Preferred Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such sub-
division, combination or reclassification, and the number and
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kind of shares of capital stock issuable on such date, shall
be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares 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; pro-
vided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the ag-
gregate par value of the shares of capital stock of the Com-
pany issuable upon exercise of one Right.
(ii) Subject to Section 24 hereof, in the event any
Person becomes an Acquiring Person, each holder of a Right
shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance
with the terms of this Rights Agreement and in lieu of Pre-
ferred Shares, such number of Common Shares of the Company as
shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of
a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per
-22-
share market price of the Common Shares of the Company (de-
termined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be out-
standing, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by
the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Ac-
xxxxxxx Person) shall be void, and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this Rights Agreement. No Right Certificate
shall be issued pursuant to Section 3 hereof that represents
Rights beneficially owned by an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any As-
sociate or Affiliate thereof; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Ac-
xxxxxxx Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or
to any nominee of such Acquiring Person, Associate or Affili-
ate; and any Right Certificate delivered to the Rights Agent
for transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be cancelled.
-23-
(iii) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or autho-
rized but unissued to permit the exercise in full of the
Rights in accordance with subparagraph (ii) above, the Com-
pany shall take all such action as may be necessary to autho-
rize additional Common Shares for issuance upon exercise of
the Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number
or fraction is equal to the current per share market price of
one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all hold-
ers of Preferred Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or Securities convertible
into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or
-24-
having a conversion price per share, if a Security convert-
ible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Pre-
ferred Shares on such record date, the Purchase Price to be
in effect after such record date shall be determined by mul-
tiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the number of Preferred Shares outstanding on such record
date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the ag-
gregate initial conversion price of the convertible Securi-
ties so to be offered) would purchase at such current market
price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent pre-
ferred shares 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 issuable upon exercise of one
Right. In case such subscription price may be paid in a con-
sideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined
in good faith by the Board of Directors of the Company, whose
-25-
determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed;
and, in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of the Pre-
ferred Shares (including any such distribution made in con-
nection with a consolidation or merger in which the Company
is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or sub-
scription 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 then
current per share market price of the Preferred Shares 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 Agent) of the portion of the assets or evidences
-26-
of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the
denominator of which shall be such then current per share
market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exer-
cise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon ex-
ercise of one Right. Such adjustments shall be made succes-
sively whenever such a record date is fixed; and, in the
event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation here-
under, the "current per share market price" of any security
(a "Security") on any date shall be deemed to be the average
of the daily closing prices per share of such Security for
the 30 consecutive Trading Days immediately prior to such
date; provided, however, that in the event that the current
per share market price of the Security is determined during a
period following the announcement by the issuer of such Secu-
rity of (A) a dividend or distribution on such Security pay-
able in shares of such Security or Securities convertible
into such shares, or (B) any subdivision, combination or re-
classification of such Security and prior to the expiration
-27-
of 30 Trading Days after the ex-dividend date for such divi-
dend or distribution, or the record date for such subdivi-
sion, combination or reclassification, then, and in each such
case, the current per share market price shall be ap-
propriately adjusted to reflect the current market price per
share equivalent of such Security. 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 trad-
ing on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction report-
ing system with respect to securities listed on the principal
national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use, or,
if on any such date the Security is 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 Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which
-28-
the principal national securities exchange on which the Secu-
rity is listed or admitted to trading is open for the trans-
action of business, or, if the Security is not listed or ad-
mitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
shall be determined in accordance with the method set forth
in Section 11(d)(i). If the Preferred Shares are not pub-
licly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the cur-
rent per share market price of the Common Shares as deter-
mined pursuant to Section 11(d)(i), (appropriately adjusted
to reflect any stock split, stock dividend or similar trans-
action occurring after the date hereof), multiplied by one
hundred. If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, "current per
share market price" 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 state-
ment filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, how-
ever, that any adjustments which by reason of this Section
-29-
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 near-
est cent or to the nearest one one-millionth of a Preferred
Share or one ten-thousandth of any other share or Security 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 requires such adjust-
ment or (ii) the date of the expiration of the right to exer-
cise any Rights.
(f) If, as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred
Shares contained in Section 11(a) through (c) hereof, inclu-
sive, and the provisions of Sections 7, 9, 10 and 13 hereof
with respect to the Preferred Shares shall apply on like
terms to any such other shares.
-30-
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price here-
under shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Pre-
ferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i) hereof, upon each ad-
justment of the Purchase Price as a result of the calcula-
tions made in Sections 11(b) and (c) hereof, each Right out-
standing immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the ad-
justed Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (A) multiplying (x) the
number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price and (B) dividing the product so obtained by
the Purchase Price in effect immediately after such adjust-
ment 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 substitution for any adjustment in the number of
-31-
one one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such ad-
justment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereaf-
ter, but, if the Right Certificates have been issued, shall
be at least 10 days later than the date of the public an-
nouncement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Sec-
tion 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Cer-
tificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjust-
ment, or, at the option of the Company, shall cause to be
-32-
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of
the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may con-
tinue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-
hundredth of the then par value, if any, of the Preferred
Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may val-
idly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
-33-
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made ef-
fective as of a record date for a specified event, the Com-
pany may elect to defer until the occurrence of such event
the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock
or securities of the Company, if any, issuable upon such ex-
ercise over and above the Preferred Shares 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 xxxx or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those ad-
justments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine
to be advisable in order that any consolidation or subdivi-
sion of the Preferred Shares, issuance wholly for cash of any
Preferred Shares at less than the current market price, issu-
ance wholly for cash of Preferred Shares or securities which
-34-
by their terms are convertible into or exchangeable for Pre-
ferred Shares, dividends on Preferred Shares payable in Pre-
ferred Shares or issuance of rights, options or warrants re-
ferred to in Section 11(b) hereof, hereafter made by the Com-
pany to holders of the Preferred Shares shall not be taxable
to such stockholders.
(n) In the event that at any time after the date
of this Rights Agreement and prior to the Distribution Date,
the Company shall (i) declare or pay any dividend on the Com-
mon Shares payable in Common Shares, or (ii) effect a subdi-
vision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares) into a greater or lesser number of Common
Shares, then in any such case (A) the number of one one-
hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a Preferred
Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common
Shares outstanding immediately before such event and the de-
nominator of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share out-
standing immediately after such event shall have issued with
respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section
-35-
11(n) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or con-
solidation is effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as pro-
vided in Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment, and
a brief statement of the facts accounting for such adjust-
ment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares or the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25
hereof.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. In the event, directly
or indirectly, at any time after a Person has become an Ac-
xxxxxxx Person, (a) the Company shall consolidate with, or
merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Com-
pany and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c)
the Company shall sell or otherwise transfer (or one or more
-36-
of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other
than the Company, one or more of its wholly owned Subsid-
iaries or the Foundations, then, and in each such case,
proper provision shall be made so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a
price equal to the then current Purchase Price multiplied by
the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the
terms of this Rights Agreement and in lieu of Preferred
Shares, such number of Common Shares of such other Person
(including the Company as successor thereto or as the surviv-
ing corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is
then exercisable and dividing that product by (B) 50% of the
then current per share market price of the Common Shares of
such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this
-37-
Rights Agreement; (iii) the term "Company" shall thereafter
be deemed to refer to such issuer; and (iv) such issuer shall
take such steps (including, but not limited to, the reserva-
tion of a sufficient number of its Common Shares in ac-
cordance with Section 9 hereof) in connection with such con-
summation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reason-
ably may be, in relation to the Common Shares of the Company
thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such
issuer shall have executed and delivered to the Rights Agent
a supplemental agreement so providing. The Company shall not
enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or
any agreements or arrangements which, as a result of the con-
summation of such transaction, would eliminate or substan-
tially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or
other transfers.
Section 14. Fractional Rights and Fractional
Shares. (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
-38-
Rights, there shall be paid to the registered holders of the
Right 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 the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, 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 re-
spect to securities listed on the principal national securi-
ties exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trad-
ing 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
-39-
professional market maker making a market in the Rights se-
lected 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 deter-
mined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than frac-
tions which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary re-
ceipts, pursuant to an appropriate agreement between the Com-
pany and a depositary selected by it; provided that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and prefer-
ences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the Com-
pany shall pay to the registered holders of Right Certifi-
xxxxx at the time such Rights are exercised as herein pro-
vided an amount in cash equal to the same fraction of the
-40-
current market value of one Preferred Share. For the pur-
poses of this Section 14(b), the current market value of a
Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to the second sentence of Sec-
tion 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right, by the acceptance of
the Right, expressly waives such holder's right to receive
any fractional Rights or any fractional shares upon exercise
of a Right (except as provided above).
Section 15. Rights of Action. All rights of ac-
tion in respect of this Rights Agreement, excepting the
rights of action given to the Rights Agent under Section 18
hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date,
the registered holders of the Common Shares); and any regis-
tered holder of any Right Certificate (or, prior to the Dis-
tribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certifi-
cate (or, prior to the Distribution Date, of the Common
Shares), may, on such holder's own behalf and for such
holder's own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to en-
force, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner
-41-
provided in such Right Certificate and in this Rights Agree-
ment. Without limiting the foregoing or any remedies avail-
able to the holders of Rights, it is specifically acknowl-
edged that the holders of Rights would not have an adequate
remedy at law for any breach of this Rights Agreement, and
will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this
Rights Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
the Common Shares;
(b) after the Distribution Date, the Right Cer-
tificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the
Rights Agent, duly endorsed or accompanied by a proper in-
strument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Shares
-42-
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any nota-
tions of ownership or writing on the Right Certificate or the
associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes what-
soever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares 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 Right Certificate be con-
strued to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stock-
holders (except as provided in Section 25 hereof), or to re-
ceive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
-43-
Section 18. Concerning the Rights Agent. The Com-
pany agrees to pay to the Rights Agent reasonable compensa-
tion 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 other disbursements incurred in
the administration and execution of this Rights Agreement and
the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense
incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the costs
and expenses of defending against any claim of liability in
the premises.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of
this Rights Agreement in reliance upon any Right Certificate
or certificate for the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, let-
ter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to
-44-
be signed, executed and, where necessary, verified or ac-
knowledged, by the proper person or persons, or otherwise
upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. 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 corpora-
tion succeeding to the stock transfer or corporate trust pow-
ers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Rights Agree-
ment without the execution or filing of any paper or any fur-
ther act on the part of any of the parties hereto; provided,
that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement,
any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and de-
liver such Right Certificates so countersigned; and, in case
at that time any of the Right Certificates shall not have
been countersigned, any successor Rights Agent may counter-
sign such Right Certificates either in the name of the prede-
cessor Rights Agent or in the name of the successor Rights
-45-
Agent; and, in all such cases, such Right Certificates shall
have the full force provided in the Right Certificates and in
this Rights Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certifi-
xxxxx shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and, in
case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name; and, in all such cases, such Right Certificates
shall have the full force provided in the Right Certificates
and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Rights Agreement upon the following terms and conditions, by
all of which the Company and the holders of Right Certifi-
xxxxx, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal coun-
sel (who may be legal counsel for the Company), and the opin-
ion 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 opin-
ion.
-46-
(b) The Rights Agent shall not be deemed to have
knowledge of any fact or matter pertaining to the performance
of its duties under this Rights Agreement, except such facts
or matters as are evidenced by records which are required to
be created and maintained by it hereunder, until it shall
have been advised thereof in writing by the Company or by a
holder of Rights. Whenever in the performance of its duties
under this Rights Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a cer-
tificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President,
the Treasurer or the Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full au-
thorization to the Rights Agent for any action taken or suf-
fered in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
-47-
in this Rights Agreement or in the Right Certificates (except
its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any re-
sponsibility in respect of the validity of this Rights Agree-
ment 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 Right Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition con-
tained in this Rights Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercis-
ability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or
amount thereof) provided for in Section 3, 11, 13, 23 or 24
hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with re-
spect to the exercise of Rights evidenced by Right Certifi-
xxxxx after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization
or reservation of any Preferred Shares to be issued pursuant
to this Rights Agreement or any Right Certificate or as to
-48-
whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, ex-
ecute, acknowledge and deliver or cause to be performed, ex-
ecuted, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be re-
quired by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Rights Agree-
ment.
(g) The Rights Agent is hereby authorized and di-
rected to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice
President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in con-
nection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in
acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, direc-
tor, 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
-49-
it were not Rights Agent under this Rights Agreement. Noth-
ing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided that reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be dis-
charged from its duties under this Rights Agreement upon 30-
days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30-days' no-
xxxx in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent
of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates
by first-class mail. If the Rights Agent shall resign or be
-50-
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a pe-
riod of 30 days after giving notice of such removal or after
it has been notified in writing of such resignation or inca-
pacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (which holder shall, with
such notice, submit such holder's Right Certificate for in-
spection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent juris-
diction for the appointment of a new Rights Agent. Any suc-
cessor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State
of New York (or of any other state of the United States so
long as such corporation is authorized to do business as a
banking institution in the State of New York), in good stand-
ing, having an office in the State of New York, which is au-
thorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination
by federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and sur-
plus of at least $50 million. After appointment, the succes-
sor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been origi-
xxxxx named as Rights Agent without further act or deed; but
-51-
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 Shares or
Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right 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 ap-
pointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agree-
ment or of the Rights to the contrary, the Company may, at
its option, issue new Right 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 se-
curities or property purchasable under the Right Certificates
made in accordance with the provisions of this Rights Agree-
ment.
Section 23. Redemption. (a) The Board of Direc-
tors of the Company may, at its option, at any time prior to
-52-
such time as any Person becomes an Acquiring Person, redeem
all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transac-
tion occurring after the date hereof (the "Redemption
Price"). The redemption of the Rights by the Board of Direc-
tors of the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors
of the Company, in its sole discretion, may establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights pursuant to paragraph (a) of this Section 23, and
without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors of the Company ordering
the redemption of the Rights, the Company shall mail a notice
of redemption to all the holders of the then outstanding
Rights at their last addresses as they appear upon the regis-
try books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner
-53-
herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Af-
filiates 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 or in Section 24
hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) xxxxxxThe 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 11(a)(ii) hereof) for Common Shares
at an exchange ratio of one Common Share per Right (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, any entity
holding Common Shares for or pursuant to the terms of any
such plan, or either of the Foundations), together with all
Affiliates and Associates of such Person, becomes the Benefi-
cial Owner of 50% or more of the Common Shares then outstand-
ing.
-54-
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (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
Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
-55-
(c) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or autho-
rized but unissued to permit any exchange of Rights as con-
templated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the
Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number
or fraction is equal to the current per share market price of
one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company shall pay to the regis-
tered holders of the Right Certificates with regard to which
such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current mar-
ket value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common
-56-
Share shall be the closing price of a Common Share (as deter-
mined 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 (i) to pay any dividend
payable in stock of any class to the holders of the Preferred
Shares or to make any other distribution to the holders of
the Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of the Preferred
Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class
or any other securities, rights or options, (iii) to effect
any reclassification of the Preferred Shares (other than a
reclassification involving only the subdivision of outstand-
ing Preferred Shares), (iv) to effect any consolidation or
merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Com-
mon Shares),
-57-
then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liq-
uidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common
Shares and/or Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Pre-
ferred Shares for purposes of such action, and, in the case
of any such other action, at least 10 days prior to the date
of the taking of such proposed action or the date of partici-
pation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section
11(a)(ii) hereof shall occur, then the Company shall, as soon
as practicable thereafter, give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
-58-
Section 26. Notices. Notices or demands autho-
rized by this Rights Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or
on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as fol-
lows:
Tribune Company
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Rights Agreement to be given or
made by the Company or by the holder of any Right Certificate
to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (un-
til another address is filed in writing with the Company) as
follows:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Tenders & Exchanges Administration
Notices or demands authorized by this Rights Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Right Certificate shall be sufficiently given
-59-
or made if sent by first-class mail, postage prepaid, ad-
dressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 27. Supplements and Amendments. The Com-
pany may from time to time supplement or amend this Rights
Agreement without the approval of any holders of Right Cer-
tificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defec-
tive or inconsistent with any other provisions herein, or to
make any other provisions with respect to the Rights which
the Company may deem necessary or desirable, any such supple-
ment or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that from
and after such time as any Person becomes an Acquiring Per-
son, this Rights Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of
Rights. Without limiting the foregoing, the Company may at
any time prior to such time as any Person becomes an Acquir-
ing Person amend this Rights Agreement to extend the Final
Expiration Date or to change the Purchase Price hereunder.
Section 28. Successors. All the covenants and pro-
visions of this Rights Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the ben-
efit of their respective successors and assigns hereunder.
-60-
Section 29. Benefits of this Rights Agreement.
Nothing in this Rights Agreement shall be construed to give
to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certifi-
xxxxx (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights Agreement shall be for
the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Rights Agreement is held by a
court of competent jurisdiction or other authority to be in-
valid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agree-
ment shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
Section 31. Governing Law. This Rights Agreement
and each Right Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to con-
tracts to be made and performed entirely within such State.
Section 32. Counterparts. This Rights Agreement
may be executed in any number of counterparts and each of
-61-
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 33. Descriptive Headings. Descriptive
headings of the several Sections of this Rights Agreement are
inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
-62-
IN WITNESS WHEREOF, the parties hereto have caused
this Rights Agreement to be duly executed and attested, all
as of the day and year first above written.
Attest: TRIBUNE COMPANY
By /s/ Xxxxxx X. Xxxxxxxxx By /s/ Crane X. Xxxxxx
Title: Vice President- Title: Vice President &
Development General Counsel
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By /s/ Xxxxxx X. X'Xxxxx By /s/ Xxxxx X. Xxxxxxx
Title: Vice President Title: Assistant Vice
President
-63-
Exhibit A
FORM
of
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
TRIBUNE COMPANY
(Pursuant to Section 151 of the
Delaware General Corporation Law)
TRIBUNE COMPANY, a corporation organized and exist-
ing under the General Corporation Law of the State of Dela-
ware (hereinafter called the "Corporation"), hereby certifies
that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of
the General Corporation Law at a meeting duly called and held
on January __, 1998:
RESOLVED, that pursuant to the authority granted to
and vested in the Board of Directors of this Corporation
(hereinafter called the "Board of Directors" or the "Board")
in accordance with the provisions of the Certificate of In-
corporation, the Board of Directors hereby amends, effective
as of January __, 1998, the Certificate of Designations es-
tablishing the Series A Junior Participating Preferred Stock,
filed on December 22, 1987 (the "Certificate") by amending
and restating the designation and number of shares, and the
relative rights, preferences, and limitations of such Series
A Junior Participating Preferred Stock, no shares of which
have been issued, as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of
such series shall be designated as "Series A Junior Partici-
pating Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred
A-1
Stock shall be 1,500,000. Such number of shares may be in-
creased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares
of Series A Preferred Stock to a number less than the number
of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights
or warrants or upon the conversion of any outstanding securi-
ties issued by the Corporation convertible into Series A Pre-
ferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any similar
stock) ranking prior and superior to the Series A Pre-
ferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock, in preference to the
holders of Common Stock, without par value (the "Common
Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable
in cash on the first day of March, June, September and
December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commenc-
ing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of
(a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the ag-
gregate per share amount (payable in kind) of all non-
cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivi-
sion of the outstanding shares of Common Stock (by re-
classification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred
Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled im-
mediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such
A-2
amount by a fraction, the numerator of which is the num-
ber of shares of Common Stock outstanding immediately
after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided
in paragraph (A) of this Section immediately after it
declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or dis-
tribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $1 per share on the Series A Pre-
ferred Stock shall nevertheless be payable on such sub-
sequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumula-
tive on outstanding shares of Series A Preferred Stock
from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of is-
xxx is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to re-
ceive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but un-
paid dividends shall not bear interest. Dividends paid
on the shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares
of Series A Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment here-
inafter set forth, each share of Series A Preferred
A-3
Stock shall entitle the holder thereof to 100 votes on
all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivi-
sion or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a frac-
tion, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of
Preferred Stock or any similar stock, or by law, the
holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights
shall vote together as one class on all matters submit-
xxx to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock
shall have no special voting rights and their consent
shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other divi-
dends or distributions payable on the Series A Preferred
Stock as provided in Section 2 are in arrears, thereaf-
ter and until all accrued and unpaid dividends and dis-
tributions, whether or not declared, on shares of Series
A Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking jun-
ior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Pre-
ferred Stock;
A-4
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Pre-
ferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock
on which dividends are payable or in arrears in
proportion to the total amounts to which the hold-
ers of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation, dis-
solution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred
Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in ac-
cordance with a purchase offer made in writing or
by publication (as determined by the Board of Di-
rectors) to all holders of such shares upon such
terms as the Board of Directors, after consider-
ation of the respective annual dividend rates and
other relative rights and preferences of the re-
spective series and classes, shall determine in
good faith will result in fair and equitable treat-
ment among the respective series or classes.
(B) The Corporation shall not permit any subsid-
iary of the Corporation to purchase or otherwise acquire
for consideration any shares of stock of the Corporation
unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Se-
xxxx A Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the condi-
tions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of
A-5
Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corpo-
ration, no distribution shall be made (1) to the holders of
shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an ag-
gregate amount per share, subject to the provision for ad-
justment hereinafter set forth, equal to 100 times the ag-
gregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in propor-
tion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combina-
tion or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Pre-
ferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the de-
nominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case
the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Com-
mon Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case each share of Series A Preferred Stock shall at the same
time be similarly exchanged or changed into an amount per
share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of
A-6
Common Stock is changed or exchanged. In the event the Cor-
poration shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstand-
ing shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock
shall rank, with respect to the payment of dividends and the
distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incor-
poration of the Corporation shall not be amended in any man-
ner which would materially alter or change the powers, pref-
erences or special rights of the Series A Preferred Stock so
as to affect them adversely without the affirmative vote of
the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock, voting together as a single
class.
A-7
IN WITNESS WHEREOF, this Certificate of Designa-
tions is executed on behalf of the Corporation by its Chair-
man of the Board and attested by its Secretary this day of
January, 1998.
Xxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
Attest:
Crane X. Xxxxxx
Vice President, General Counsel
and Secretary
A-8
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER JANUARY 5, 2008 OR EARLIER
IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
Right Certificate
TRIBUNE COMPANY
This certifies that , or regis-
tered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of December 12, 1997 (the
"Rights Agreement"), between Tribune Company, a Delaware cor-
poration (the "Company"), and First Chicago Trust Company of
New York (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is de-
fined in the Rights Agreement) and prior to 5:00 P.M., New
York City time, on January 5, 2008 at the principal office of
the Rights Agent, or at the office of its successor as Rights
Agent, one one-hundredth of a fully paid non-assessable share
of Series A Junior Participating Preferred Stock (the "Pre-
ferred Shares"), of the Company, at a purchase price of $250
per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Cer-
tificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and
the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and
the Purchase Price set forth above, are the number and Pur-
chase Price as of January 5, 1998, based on the Preferred
Shares as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number of one
one-hundredths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right Cer-
tificate are subject to modification and adjustment upon the
happening of certain events.
B-1
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorpo-
rated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full descrip-
tion of the rights, limitations of rights, obligations, du-
ties and immunities hereunder of the Rights Agent, the Com-
pany and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive
offices of the Company and the above-mentioned offices of the
Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate
or Right Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate num-
ber of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have en-
titled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exer-
cised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate (i) may be
redeemed by the Company at a redemption price of $.01 per
Right or (ii) may be exchanged in whole or in part for Pre-
ferred Shares or shares of the Company's Common Stock, with-
out par value.
No fractional Preferred Shares will be issued upon
the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one onehun-
dredth of a Preferred Share, which may, at the election of
the Company, be evidenced by depositary receipts), but, in
lieu thereof, a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate shall be en-
titled to vote or receive dividends or be deemed for any pur-
pose the holder of the Preferred Shares or of any other secu-
rities 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 direc-
tors or upon any matter submitted to stockholders at any
B-2
meeting thereof, or to give or withhold consent to any corpo-
rate action, or to receive notice of meetings or other ac-
tions 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 Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obliga-
tory for any purpose until it shall have been countersigned
by the Rights Agent.
WITNESS the facsimile signature of the proper offic-
ers of the Company and its corporate seal. Dated as of
_______________.
ATTEST: TRIBUNE COMPANY
By
Secretary Chairman, President and
Chief Executive Officer
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By
Authorized Signature
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
-------------------------------------------------------------
B-4
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: TRIBUNE COMPANY
The undersigned hereby irrevocably elects to exer-
cise Rights represented by this
Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certif-
icates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evi-
denced by this Right Certificate, a new Right Certificate for
the balance remaining 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
B-5
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
B-6
Form of Reverse Side of Right Certificate -- continued
-------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
-------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right 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 or the Form of Election to Purchase,
as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and such Assignment or Election to Purchase
will not be honored.
B-7
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On December 2, 1997, the Board of Directors of Tri-
bune Company (the "Company") declared a dividend of one pre-
ferred share purchase right (a "Right") for each outstanding
share of common stock, without par value (the "Common
Shares"), of the Company. The dividend is payable to stock-
holders of record at the close of business on January 5, 1998
(the "Record Date"). Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock (the
"Preferred Shares") of the Company at a price of $250 per one
one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and First Chicago Trust Com-
pany of New York, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following
a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person"), other than the
Xxxxxx X. XxXxxxxxx Tribune Foundation or the Cantigny Foun-
dation or any successor charitable entities (the "Founda-
tions"), has acquired beneficial ownership of 10% or more of
the outstanding Common Shares or (ii) 10 business days (or
such later date as may be determined by the Board) following
the commencement of, or announcement of an intention to make,
a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group
of 10% or more of the outstanding Common Shares (the earlier
of such dates being the "Distribution Date"), the Rights will
be evidenced, with respect to any of the Common Share cer-
tificates outstanding as of the Record Date, by such Common
Share certificate with a copy of this Summary of Rights at-
tached thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incor-
porating the Rights Agreement by reference. Until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights being at-
tached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribu-
tion Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the Distri-
bution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on January 5, 2008 (the
"Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Pre-
ferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares at a price, or securities con-
vertible into Preferred Shares with a conversion price, less
than the then-current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding reg-
ular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Preferred Shares) or of sub-
scription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of
one one-hundredths of a Preferred Share issuable upon exer-
cise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock divi-
dend on the Common Shares payable in Common Shares or subdi-
visions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
C-2
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation pay-
ment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, con-
solidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' div-
idend, liquidation and voting rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company
which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall
be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will there-
after be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preferred
Share, per Right.
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
C-3
of a Preferred Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and, in lieu
thereof, an adjustment in cash will be made based on the mar-
ket price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to the acquisition by a person or
group of affiliated or associated persons (other than the
Foundations) of beneficial ownership of 10% or more of the
outstanding Common Shares, the Board of Directors of the Com-
pany may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). The re-
demption of the Rights may be made effective at such time on
such basis with such conditions as the Board of Directors of
the Company in its sole discretion may establish. Im-
mediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the hold-
ers of the Rights, except that from and after such time as
any person or group of affiliated or associated persons be-
comes an Acquiring Person, no such amendment may adversely
affect the interests of the holders of the Rights.
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 re-
ceive dividends.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a
Report on Form 8-K dated December 12, 1997. A copy of the
Rights Agreement is available free of charge from the Com-
pany. This summary description of the Rights does not pur-
port to be complete and is qualified in its entirety by ref-
erence to the Rights Agreement, which is hereby incorporated
herein by reference.
C-4
