EXHIBIT 4.4
THIRD AMENDMENT TO THE RIGHTS AGREEMENT
THIS THIRD AMENDMENT TO THE RIGHTS AGREEMENT, made and entered into as of
this 1st day of February, 2000 (this "Third Amendment"), by and between WINSTAR
COMMUNICATIONS, INC. (the "Company") and CONTINENTAL STOCK TRANSFER AND TRUST
COMPANY, as Rights Agent (the "Rights Agent"), is being executed under the
following circumstances:
WHEREAS, the Company and the Rights Agent entered into a Rights Agreement,
dated as of July 2, 1997, an Amendment to the Rights Agreement, dated as of June
3, 1999, and the Second Amendment to the Rights Agreement, dated as of July 15,
1999 (as so amended, the "Rights Agreement");
WHEREAS, effective July 2, 1997 (the "Rights Dividend Declaration Date")
the Board of Directors of the Company authorized and declared a distribution of
one Right (each, a "Right") for each share of Common Stock, par value $.01 per
share, of the Company (the "Company Common Stock") outstanding at the Close of
Business (as defined in the Rights Agreement) on July 14, 1997 (the "Record
Date"), and authorized the issuance of one right (as such number may be adjusted
pursuant to the Rights Agreement) for each share of Company Common Stock issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and, except as otherwise provided in Section 22 of the
Rights Agreement, the Distribution Date, each Right initially representing the
right to purchase upon the terms and subject to the conditions set forth in the
Rights Agreement one Unit (as defined in the Rights Agreement) of Series B
Preferred Stock (as defined in the Rights Agreement); and
WHEREAS, the Board of Directors of the Company, by resolutions duly adopted
on January 12, 2000, authorized this Third Amendment to the Rights Agreement and
in accordance with Section 26 of the Rights Agreement.
NOW THEREFORE, the Company and the Rights Agent hereby amend the Rights
Agreement as follows, pursuant to Section 26 of the Rights Agreement:
Section 1. Amendments to the Rights Agreement. (a) The definition of
Acquiring Person contained in Section 1(a) of the Rights Agreement shall be
amended to read in its entirety as follows:
"Acquiring Person" shall mean any Person who or which, alone or together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 10% or more of the Voting Stock then outstanding, but shall not
include (x) the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such capacity or
(y) any such Person who has become and is such a Beneficial Owner solely
because (A) of a change in the aggregate number of shares of the Voting
Stock since the last date on which such Person acquired Beneficial
Ownership of any shares of the Voting Stock or (B) it acquired such
Beneficial Ownership in the good faith belief that such acquisition would
not (1) cause such Beneficial Ownership to exceed 10% of the Voting Stock
then outstanding and such Person relied in good faith in computing the
percentage of its Beneficial Ownership on publicly filed reports or
documents of the Company which are inaccurate or out-of-date or (2)
otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a)(ii) to occur. Notwithstanding clause (B) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause
(B) does not reduce its percentage of Beneficial Ownership of the Voting
Stock then outstanding to less than 10% by the Close of Business on the
fifth Business Day after notice from the Company (the date of notice being
the first day) that such person's Beneficial Ownership of the Voting Stock
then outstanding so equals or exceeds 10%, such Person shall at the end of
such five Business Day period, become an Acquiring Person (and such clause
(B) shall no longer apply to such Person). For purposes of this definition,
the determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company."
(b) A new section (u)(u) shall be added to the end of Section 1 of the
Rights Agreement as follows:
"(u)(u) "Voting Stock" shall mean any class of capital stock of the Company
which votes generally in the election of directors and on matters
prescribed for a vote of shareholders (in the case of stock other than
Common Stock together with the Common Stock), with each share of such stock
which has a number of votes other than the one vote per share being deemed
to be that number of shares of Voting Stock equal to the number of votes
which such share is entitled to cast."
(c) The proviso set forth at the end of Section 1(e) of the Rights
Agreement shall be deleted in its entirety and replaced with the following:
"provided, however, that under this paragraph (e) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, (A) securities tendered pursuant to a tender or
exchange offer made in accordance with Exchange Act Regulations by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities that may
be issued upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, (C) securities that may be issued upon exercise of Rights
from and after the occurrence of a Triggering Event, which Rights were
acquired by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(c) or Section 22 or
pursuant to Section 11(i) in connection with an adjustment made with
respect to any such Rights or (D) any shares of a class of Voting Stock
issued or deemed issued by the Company in payment of dividends on, or as a
result of the failure of the Company to pay cash dividends on, outstanding
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shares of the Company's Series G Senior Cumulative Participating
Convertible Preferred Stock (the "Series G Preferred Stock") pursuant to
the terms of the instrument providing for the creation of the Series G
Preferred Stock."
(d) The first sentence of Section 3(a) of the Rights Agreement shall be
deleted and replaced by the following:
"Until the earlier of (i) the Close of Business on the tenth day after the
Stock Acquisition Date and (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the Company's
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon consummation
thereof, such Person would be the Beneficial Owner of 10% of the Voting
Stock then outstanding (the earlier of (i) and (ii) above being the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
shares of Company Common Stock registered in the names of the holders of
shares of Company Common Stock as of and subsequent to the Record Date
(which certificates for shares of Company Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates, and (y)
the Rights will be transferable only in connection with the transfer of the
underlying shares of Company Common Stock (including a transfer to the
Company)."
(e) The first sentence of Section 28(a) of the Rights Agreement shall be
deleted and replaced by the following:
"Except as otherwise provided in Section 1(e), for the purposes of this
Agreement, any calculation of the number of shares of Company Common Stock
or the Voting Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
shares of Company Common Stock or Voting Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on the
date hereof."
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(f) The second sentence of Section 34(a) of the Rights Agreement shall be
deleted and replaced by the following:
"Subject to such adjustment, each Right may be exchanged for that number of
Units of Preferred Stock obtained by dividing the Adjustment Spread (as
defined below) by the then current market price (determined pursuant to
Section 11(d)) per Unit of Preferred Stock on the earlier of (i) the date
on which any Person becomes an Acquiring Person and (ii) the date on which
a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is first published or sent or given
within the meaning of Rule 14d-4(a) of the Exchange Act Regulations or any
successor rule, if upon consummation thereof such Person would be the
Beneficial Owner of 10% or more of the shares of Voting Stock then
outstanding (such exchange ratio being the "Section 34(a) Exchange
Ratio")."
Section 2. Full Force and Effect. The remainder of the Rights Agreement
shall remain unchanged, and the Rights Agreement as amended above, shall remain
in full force and effect.
Section 3. Governing Law. This Third Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
Section 4. Counterparts. This Third Amendment may be executed in two or
more counterparts and each of such counterparts shall for all purposes be deemed
to be an original and all such counterparts shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Third Amendment by telecopier shall be as effective as delivery of a manually
executed counterpart of this Third Amendment.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly execute on their behalf as of the date first above written.
WINSTAR COMMUNICATIONS, INC.
/s/ Xxxxxxx X. Xxxxxxxx
By: ______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
/s/ Xxxxxx Xxxxxx
By: ______________________________
Name: Xxxxxx Xxxxxx
Title: Chairman
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