FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November 2004 (November 8, 2004)
THE NEWS CORPORATION LIMITED
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(Name of Registrant)
2 Holt Street, Surry Hills, New South Wales, 2010, Australia
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F:
Form 20-F X Form 40-F
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Indicate by a check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1):
Yes No X
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Indicate by a check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7):
Yes No X
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934:
Yes No X
-------- ---------
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): Not Applicable
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Annexed hereto as Exhibit A is a copy of the announcement issued by News
Corporation, Inc. ("News Corporation") relating to its adoption of a
stockholder rights plan. News Corporation is a Delaware corporation that will
become the parent company of The News Corporation Limited ("TNCL") and its
subsidiaries upon consummation of the previously announced reincorporation
transaction (the "Reincorporation"). Under the Reincorporation, shares and
options of TNCL will be cancelled and, in exchange, existing TNCL shareholders
and optionholders will receive shares and options in News Corporation. Such
announcement was released in New York and to the Australian Stock Exchange on
November 8, 2004.
In addition, annexed hereto are, as Exhibit B, a copy of the Rights Agreement,
by and between News Corporation and Computershare Investor Services, LLC,
as Rights Agent, dated as of November 8, 2004 (the "Rights Agreement") and, as
Exhibit C, a summary description of the rights to be issued pursuant to the
Rights Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE NEWS CORPORATION LIMITED
Date: November 8, 2004 By: /s/ Arthur M. Siskind
----------------------------
Arthur M. Siskind
Director
EXHIBIT INDEX
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Exhibit
A. Announcement made by News Corporation, Inc. on November 8, 2004
regarding the adoption of a stockholder rights plan by News
Corporation, Inc.
B. Rights Agreement, by and between News Corporation, Inc. and
Computershare Investor Services, LLC, as Rights Agent, dated as of
November 8, 2004.
C. Summary description of rights to be issued pursuant to News
Corporation, Inc. stockholder rights plan.
EXHIBIT A
News Corporation
N E W S R E L E A S E
________________________________________________________________________________
For Immediate Release Contact: US Media: Andrew Butcher 212-852-7070
US Investors: Reed Nolte 212-852-7092
Sydney: Greg Baxter 61-2-9288-3242
News Corporation Announces Stockholder Rights Plan
----------------------
NEW YORK, NY, November 8, 2004 - News Corporation, Inc. announced today that
its Board of Directors has adopted a stockholder rights plan (the "Rights
Plan").
Under the Rights Plan, each stockholder of record on the record date (expected
to be November 18, 2004) will receive a distribution of one Right for each
share of voting and non-voting common stock of the Company (the "Rights").
Initially, the Rights will be represented by the Company's common stock
certificates, will not be traded separately from the common stock and will not
be exercisable.
The Rights will become exercisable only if a person or group obtains ownership
(defined to include stock which a person has the right to acquire, regardless
of whether such right is subject to the passage of time or the satisfaction of
conditions), or announces a tender offer that would result in ownership of 15%
or more of the Company's voting common stock, at which time each Right would
enable the holder of such Right to buy additional stock of the Company.
Following the acquisition of 15% or more of the Company's voting common stock,
the holders of Rights (other than the acquiring person or group) will be
entitled to purchase from the Company shares of the Company's voting or
non-voting common stock, as applicable, at half price, and in the event of a
subsequent merger or other acquisition of the Company, to buy shares of common
stock of the acquiring entity at half price. Each Right permits the holder to
spend US$80 for the purchases described above.
On November 3, 2004, immediately after the Australian Federal Court approved
the Company's reincorporation from Australia to Delaware, Liberty Media
Corporation disclosed that it had entered into an arrangement with a third
party allowing Liberty to acquire an additional 8% of News Corporation voting
stock. This action was taken without any discussion with, or prior notice to,
News Corporation. For this and other reasons the Company has put in place a
Rights Plan to protect the best interests of all shareholders. The Rights Plan
grandfathers existing holdings of voting stock, and existing contracts
permitting the acquisition of voting stock that have been publicly disclosed.
Liberty previously disclosed that it owns approximately 9.1% of the Company's
voting stock and based on its November 3, 2004 actions, now has the option to
acquire an additional 8%. The holdings of Liberty (including the option) are
expressly stated to not trigger the Rights, but any additional acquisitions
(subject to a 1% cushion granted to all exempted holders) would trigger the
Rights. The existing holdings of the Murdoch family and affiliated entities
(who will own approximately 29.5% of the Company's voting stock following the
reincorporation) are also expressly stated to not trigger the Rights, but any
additional acquisitions (subject to a 1% cushion granted to all exempted
holders) would trigger the Rights.
It is contemplated that within one month, the Board of Directors of the
Company, as reconstituted following consummation of the reincorporation from
Australia to Delaware, will consider the Rights Plan again with a view towards
determining whether the Rights Plan should (i) continue in the form initially
adopted, (ii) be amended in any respect or (iii) be terminated at such time.
The Board of Directors stated in a letter to stockholders, on October 7, 2004,
that it is the policy of the Board not to allow the Rights Plan to expire
later than one year after adoption unless ratified by stockholders.
Accordingly, the Rights Plan currently provides that the rights will expire in
one year. At or prior to such one year anniversary, the Board of Directors
will take such action as it deems appropriate in light of facts and
circumstances existing at such time, including, if appropriate, implementing
such policy (whether by seeking stockholder ratification or by allowing the
rights to expire).
Generally, the Company may redeem the Rights for $0.001 per Right, subject to
adjustment, or terminate the Rights Plan at any time before (or within 10
business days following) the acquisition by a person or group of 15% or more
of the Company's ordinary shares.
A copy of the Rights Plan will be filed shortly with the Securities and
Exchange Commission.
If any person becomes, directly or indirectly, the beneficial owner of 15% or
more of the Company's voting stock, the Murdoch Interests Agreement (which
imposes certain restrictions on the Murdoch family, such as limiting its
ability to acquire additional shares of voting stock to 3% every 6 months)
will terminate. These provisions are less restrictive than those imposed on
the Murdoch family by the Rights Plan. Based on information currently
available to the Company, it is not clear whether Liberty's conduct to date
has triggered a termination of the Murdoch Interests Agreement. Liberty has
not made any public filings or provided any information to the Company from
which this question can be determined at this time.
News Corporation, Inc (NYSE: NWS_w, NWS.A_w; ASX: NWS, NWSLV) had total assets
as of September 30, 2004 of approximately US$53 billion and total annual
revenues of approximately US$22 billion. News Corporation is a diversified
international media and entertainment company with operations in eight
industry segments: filmed entertainment; television; cable network
programming; direct broadcast satellite television; magazines and inserts;
newspapers; book publishing; and other. The activities of News Corporation are
conducted principally in the United States, Continental Europe, the United
Kingdom, Australia, Asia and the Pacific Basin.
For more information about News Corporation, please visit www.newscorp.com.
________________________________________________________________________________
1211 AVENUE OF THE AMERICAS o NEW YORK, NEW YORK 10036 o newscorp.com
EXHIBIT B
NEWS CORPORATION, INC.
and
COMPUTERSHARE INVESTOR SERVICES, LLC,
as Rights Agent
Rights Agreement
Dated as of November 8, 2004
TABLE OF CONTENTS
Page
Section 1. Certain Definitions...............................................................2
Section 2. Appointment of Rights Agent.......................................................8
Section 3. Issuance of Rights Certificates...................................................8
Section 4. Form of Rights Certificates......................................................10
Section 5. Countersignature and Registration................................................11
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.......................................................12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....................13
Section 8. Cancellation and Destruction of Rights Certificates..............................16
Section 9. Reservation and Availability of Capital Stock....................................16
Section 10. Preferred Stock Record Date......................................................18
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.......................................................18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......................29
Section 13. Consolidation, Merger or Sale or Transfer of Assets
Cash Flow or Earning Power.......................................................29
Section 14. Fractional Rights and Fractional Shares..........................................32
Section 15. Rights of Action.................................................................34
Section 16. Agreement of Rights Holders......................................................34
Section 17. Rights Certificate Holder Not Deemed a Stockholder...............................35
i
Section 18. Concerning the Rights Agent......................................................35
Section 19. Merger or Consolidation or Change of Name of Rights Agent........................36
Section 20. Duties of Rights Agent...........................................................37
Section 21. Change of Rights Agent. .........................................................40
Section 22. Issuance of New Rights Certificates..............................................41
Section 23. Redemption and Termination.......................................................41
Section 24. Exchange.........................................................................42
Section 25. Notice of Certain Events.........................................................44
Section 26. Notices. ........................................................................45
Section 27. Supplements and Amendments.......................................................46
Section 28. Successors.......................................................................46
Section 29. Determinations and Actions by the Board of Directors, etc........................47
Section 30. Benefits of this Agreement.......................................................47
Section 31. Severability.....................................................................47
Section 32. Governing Law....................................................................48
Section 33. Counterparts.....................................................................48
Section 34. Descriptive Headings.............................................................48
ii
EXHIBITS
Exhibit A -- Form of Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock
Exhibit B -- Form of Rights Certificates
Exhibit C -- Form of Summary of Rights to Purchase Series A Junior
Participating Preferred Stock
iii
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 8, 2004 (the
"Agreement"), between News Corporation, Inc., a Delaware corporation (the
"Company"), and Computershare Investor Services, LLC, a limited liability
company duly organized and validly existing under the laws of the State of
Delaware (the "Rights Agent").
W I T N E S E T H
WHEREAS, on November 8, 2004 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company (the "Board")
authorized and declared a dividend distribution of one right (a "Class A
Right") for each share of Class A common stock, par value $0.01 per share, of
the Company (the "Class A Common Stock" or "Nonvoting Common Stock") and one
right (a "Class B Right" and, together with the Class A Rights, the "Rights")
for each share of Class B common stock, par value $0.01 per share, of the
Company (the "Class B Common Stock" or "Voting Common Stock" and, together
with the Class A Common Stock, the "Common Stock") outstanding (it being
understood that shares held by direct or indirect wholly owned Subsidiaries of
the Company or TNCL (as defined herein) shall not be considered as
outstanding) at the close of business on November 18, 2004 (the "Record
Date"), with the payment of such dividend being conditioned on the
consummation of the Reincorporation, and has authorized the issuance of one
Class A Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) for each share of Class A Common Stock and
one Class B Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) for each share of Class B Common Stock
issued between the Record Date (whether originally issued or delivered from
the Company's treasury) and the Distribution Date (as hereinafter defined),
each Right initially representing the right to purchase one one-thousandth of
a share of Series A Junior Participating Preferred Stock of the Company (the
"Preferred Stock") having the rights, powers and preferences set forth in the
form of Certificate of Designation, Preferences and Rights attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
1
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(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 fifteen percent (15%) or more of the Voting Capital
Stock then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company, or
of any Subsidiary of the Company, or any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan,
(iv) any Exempt Person, (v) any Person who becomes the Beneficial Owner of
fifteen percent (15%) or more of the Voting Capital Stock then outstanding as
a result of a reduction in the number of shares of Capital Stock outstanding
due to the repurchase of shares of Capital Stock by the Company unless and
until such Person, after becoming aware that such Person has become the
Beneficial Owner of fifteen percent (15%) or more of the then outstanding
Voting Capital Stock, acquires beneficial ownership of additional shares of
Capital Stock representing one percent (1%) or more of the Voting Capital
Stock then outstanding or (vi) any Exempt Person who ceases to be an Exempt
Person as a result of a reduction in the number of shares of Capital Stock
outstanding due to the repurchase of shares of Capital Stock by the Company
unless and until such Exempt Person, after becoming aware that it has ceased
to be an Exempt Person as a result of such reduction, acquires beneficial
ownership of such number of additional shares of Capital Stock which, when
taken together with the number of shares acquired pursuant to clause (B) of
the definition of Exempt Person, represents one percent (1%) or more of the
Voting Capital Stock outstanding at the time of acquisition of any such
additional shares pursuant to this clause (vi).
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Affiliate" and "Associate" shall have the
respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner"
of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable immediately or
only after the passage of time or upon the satisfaction of one or
more conditions (whether or not within the control of such Person))
pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange
rights, other rights, warrants or options, or otherwise, and
including any securities of The News Corporation Limited to be
exchanged for securities of the Company in the Reincorporation and
any securities of the Company represented by a "when-issued" trading
thereof; provided,
2
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event (as
hereinafter defined), or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date (as
hereinafter defined) or pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned,
directly or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (d))
or disposing of any voting securities of the Company; provided,
however, that nothing in this paragraph (d) shall cause a Person
engaged in business as an
3
underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition, and
then only if such securities continue to be owned by such Person at
such expiration of forty days.
(e) "Board" shall have the meaning set forth in the
preamble of this Agreement.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(g) "Capital Stock" shall mean, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and/or nonvoting) of the Company and any rights (other than
debt securities convertible into capital stock), warrants or options to
acquire such capital stock, whether now outstanding or issued after the date
of this Agreement.
(h) "Class A Common Stock" shall have the meaning
set forth in the preamble of this Agreement.
(i) "Class A Rights" shall have the meaning set
forth in the preamble of this Agreement.
(j) "Class B Common Stock" shall have the meaning
set forth in the preamble of this Agreement.
(k) "Class B Rights" shall have the meaning set
forth in the preamble of this Agreement.
(l) "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.
(m) "Common Stock" shall mean the common stock, par
value $0.01 per share, of the Company at the date hereof or any other stock
resulting from successive changes or reclassifications of the common stock,
and includes both
4
the Class A Common Stock and the Class B Common Stock, except that "Common
Stock" when used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or direct
the management, of such Person
(n) "Common Stock Equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(o) "Current Market Price" shall have the meaning
determined in accordance with Section 11(d)(i) hereof.
(p) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(q) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(r) "Equivalent Preferred Stock" shall have the
meaning set forth in Section 11(b) hereof.
(s) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(t) "Exchange Ratio" shall have the meaning set
forth in Section 24(a) hereof.
(u) "Exempt Person" shall mean each of the
following: (i) TNCL and any of its or the Company's Subsidiaries or controlled
Affiliates, (ii) each of K. Rupert Murdoch and any executor, administrator,
guardian, conservator or similar legal representative thereof, any member of
the immediate family of K. Rupert Murdoch, Cruden Investments Pty. Limited, an
Australia company, and any successor (by merger, consolidation, transfer of
assets or otherwise) to all or substantially all of its business and assets
and any settlement and trusts, and any entities which are controlled by
settlements and trusts, set up for the benefit of K. Rupert Murdoch or members
of his family (either exclusively or among others) and (iii) Liberty Media
Corporation, a Delaware corporation, and its Affiliates, but, with respect to
clauses (ii) and (iii) of this paragraph, each such Exempt Person shall be
considered an Exempt Person only to the extent that the shares of Voting
Capital Stock Beneficially Owned by each such Exempt Person do not exceed the
number of
5
shares (A) which both (1) are Beneficially Owned by such Exempt Person on the
Rights Dividend Declaration Date and (2) have been publicly disclosed as being
Beneficially Owned by such Exempt Person (in a filing with the U.S. Securities
and Exchange Commission or the Australian Securities and Investments
Commission or in a press release of such Exempt Person) on or prior to the
Rights Dividend Declaration Date, plus (B) any additional shares of Capital
Stock representing not more than one percent (1%) of the Voting Capital Stock
then outstanding.
(v) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(w) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(x) "Nonvoting Common Stock" shall have the meaning
set forth in the preamble of this Agreement.
(y) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(z) "Preferred Stock" shall mean shares of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the
Company, and, to the extent that there are not a sufficient number of shares
of Series A Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the
terms of the Series A Junior Participating Preferred Stock.
(aa) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(bb) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(cc) "Record Date" shall have the meaning set forth
in the preamble of this Agreement.
(dd) "Reincorporation" shall mean the transactions
resulting in TNCL becoming an indirect subsidiary of the Company and in which
the existing holders of TNCL capital stock have their shares cancelled and
exchanged for shares
6
of the Company, which Reincorporation is expected to be consummated on or about
November 12, 2004.
(ee) "Rights" shall have the meaning set forth in
the preamble of this Agreement.
(ff) "Rights Agent" shall have the meaning set
forth in the preamble of this Agreement.
(gg) "Rights Certificate" shall have the meaning
set forth in Section 3(a) hereof.
(hh) "Rights Dividend Declaration Date" shall have
the meaning set forth in the preamble of this Agreement.
(ii) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(jj) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(kk) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ll) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed or amended pursuant to Section
13(d) under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(mm) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities sufficient to
elect at least a majority of the directors of such corporation is beneficially
owned, directly or indirectly, by such Person, or otherwise controlled by such
Person.
(nn) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(oo) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
7
(pp) "TNCL" shall mean The News Corporation
Limited, an Australian corporation.
(qq) "Trading Day" shall have the meaning set forth
in Section 11(d)(i) hereof.
(rr) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
(ss) "Voting Capital Stock" shall mean the Capital
Stock of any class or kind ordinarily having the power to vote for the
election of directors or other members of the governing body of the Company,
including the Voting Common Stock.
(tt) "Voting Common Stock" shall have the meaning
set forth in the preamble of this Agreement.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as rights agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall prior
to the Distribution Date also be the holders of the Common Stock) 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. Issuance of Rights Certificates.
(a) Until the earlier of (i) the close of business
on the tenth Business Day after the Stock Acquisition Date (or, if the tenth
Business Day after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of business on
the tenth Business Day (or such later date as the Board shall determine) after
the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act,
if, upon consummation thereof, such Person would become an Acquiring Person
(the earlier of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Class A
8
Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Class A Common Stock registered in the
names of the holders of the Class A Common Stock (which certificates for Class
A Common Stock shall be deemed also to be certificates for Class A Rights) and
the Class B Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Class B Common Stock
registered in the names of the holders of the Class B Common Stock (which
certificates for Class B Common Stock shall be deemed also to be certificates
for Class B Rights), and, in each such case, not by separate certificates, and
(y) the Rights will be transferable only in connection with the transfer of
the underlying shares of Common Stock (including a transfer to the Company).
As soon as practicable after the Distribution Date, the Rights Agent will send
by first-class, insured, postage-prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates. The Company shall promptly
notify the Rights Agent in writing upon the occurrence of the Distribution
Date. Until such notice is received by the Rights Agent, the Rights Agent may
presume conclusively for all purposes that the Distribution Date has not
occurred.
(b) The Company will make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights")
to any holder of Rights who may so request from time to time prior to the
Expiration Date. With respect to certificates for the Common Stock outstanding
as of the Record Date, or issued subsequent to the Record Date, unless and
until the Distribution Date shall occur, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock.
9
(c) Rights shall be issued in respect of all shares
of Common Stock which are issued (whether originally issued or from the
Company's treasury or transferred to third parties by wholly owned
Subsidiaries of the Company) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Certificates representing such
shares of Common Stock shall also be deemed to be certificates for Rights, and
shall bear the following legend if such certificates are issued after the
Record Date but prior to the earlier of the Distribution Date or the
Expiration Date:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
News Corporation, Inc. (the "Company") and Computershare Investor
Services, LLC (the "Rights Agent"), dated as of November 8, 2004, as
it may be amended from time to time (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the office of the Rights Agent designated for
such purpose. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Rights Agent
will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge,
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse thereof)
shall each be
10
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage (but which
shall not, in any case, affect the rights or duties of the Rights Agent).
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and
on their face shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at
the price set forth therein (such exercise price per one one-thousandth of a
share, the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a), Section 11(i) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any
Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of the Rights
Agreement.
11
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile signature and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company
who shall have signed any of the Rights Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed such
Rights Certificates had not ceased to be such officer of the Company; and any
Rights Certificates may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, receipt by the
Rights Agent of notice to that effect and all other relevant information
referred to in Section 3(a), the Rights Agent will keep, or cause to be kept,
at its office designated for such purpose, books for registration and transfer
of the Rights Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights Certificates, the number
of Rights evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates (other than Rights
Certificates representing Rights that may have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a share of Preferred Stock
(or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
12
surrendered then entitles such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate, shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall reasonably request
and shall have paid a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e), Section 14 and Section 24, countersign and deliver
to the Person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate, if mutilated, the Company will execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for countersignature
and delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, at any time
after the Distribution Date the registered holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part
upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the
total number of one one-thousandths of a share of Preferred Stock (or other
13
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, and an amount equal to any tax or
charge required to be paid under Section 9(e), at or prior to the earlier of
(i) 5:00 P.M., New York City time, on November 8, 2005, or such earlier or
later date as may be established by the Board prior to the expiration of the
Rights (such date, as it may be extended by the Board, the "Final Expiration
Date"), or (ii) the time at which the Rights are redeemed or exchanged as
provided in Section 23 and Section 24 hereof (the earlier of (i) and (ii)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth
of a share of Preferred Stock pursuant to the exercise of a Right initially
shall be $80, and shall be subject to adjustment from time to time as provided
in Section 11 and Section 13(a) hereof and shall be payable in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or other shares, securities, cash or other assets, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax or charge required to be paid under Section 9(e), the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of Preferred Stock (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-thousandths of a share of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company
shall have elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or, upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, and (iv) after receipt thereof, deliver such cash, if any, to
or upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank check
14
or bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or any other
Person as a result of its failure to make any determinations with respect to
an Acquiring Person or any of its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported
15
exercise as set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates of such Beneficial Owner as the Company or the Rights
Agent shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split-up, combination or exchange shall, if surrendered to
the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital
Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its treasury),
the number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable,
all shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
16
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration statement under the
Act, with respect to the securities purchasable upon exercise of the Rights on
an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the
date of the expiration of the Rights. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension has been rescinded. The Company shall notify the Rights Agent
whenever it makes a public announcement pursuant to this Section 9(c) and give
the Rights Agent a copy of such announcement. In addition, if the Company
shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law, or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all one
one-thousandths of a share of Preferred Stock (and, following the occurrence
of a Triggering Event, Common Stock and/or other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all federal and state transfer taxes
and charges
17
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of one one- thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
in respect of a name other than that of the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the holder of
such Rights Certificates at the time of surrender) or until it has been
established to the Company's and the Rights Agent's reasonable satisfaction
that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which
the Preferred Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. The Purchase Price, the number and kind of
18
shares covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification of
the Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of
the Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination
or reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person shall, at any
time after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a) hereof, then,
promptly following the later of the occurrence of such event and the
Record Date, proper provision shall be made so that (A) each holder
of a Class A Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of a number of one one-thousandths
of a share of Preferred Stock, such number of shares of Class A
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was
19
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase
Price" for each such Class A Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of Class A Common Stock on the date
of such first occurrence (such number of shares, the "Class A
Adjustment Shares") and (B) each holder of a Class B Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of a
number of one one-thousandths of a share of Preferred Stock, such
number of shares of Class B Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for each such Class
B Right and for all purposes of this Agreement) by 50% of the Current
Market Price (determined pursuant to Section 11(d) hereof) per share
of Class B Common Stock on the date of such first occurrence (such
number of shares, the "Class B Adjustment Shares" and, together with
the Class A Adjustment Shares, the "Adjustment Shares"). The Company
shall give the Rights Agent written notice of the identity of any
such Acquiring Person, Associate or Affiliate, or the nominee of any
of the foregoing, and the Rights Agent may rely on such notice in
carrying out is duties under this Agreement and shall be deemed not
to have any knowledge of the identity of any such Acquiring Person,
Associate or Affiliate, or the nominee of any of the foregoing,
unless and until it shall have received such notice.
(iii) In the event that the number of
treasury shares and shares of Common Stock which is authorized by
the Company's Amended and Restated Certificate of Incorporation, as
amended, but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights, is not sufficient to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares issuable upon the
20
exercise of a Class A Right or Class B Right (the "Current Value"),
and (B) with respect to each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for the Adjustment Shares, upon
the exercise of a Right and payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock, such as
the Preferred Stock, which the Board has deemed to have essentially
the same value or economic rights as shares of Common Stock (such
shares of preferred stock being referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by
the Board based upon the advice of a nationally recognized investment
banking firm selected by the Board; provided, however, that if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of
Class A Common Stock or Class B Common Stock, as the case may be, (to
the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. For purposes
of the preceding sentence, the term "Spread" shall mean the excess of
(i) the Current Value over (ii) the Purchase Price. If the Board
determines in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To the extent
that the Company determines that action should be taken pursuant to
the first and/or third sentences of this Section 11(a)(iii), the
Company (1) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all
21
outstanding Rights, and (2) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek such stockholder approval for such authorization of additional
shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. The Company shall
notify the Rights Agent whenever it makes a public announcement
pursuant to this Section 11(a)(iii) and give the Rights Agent a copy
of such announcement. For purposes of this Section 11(a)(iii), the
value of each Adjustment Share shall be the Current Market Price per
share of the Class A Common Stock or Class B Common Stock, as the
case may be, on the Section 11(a)(ii) Trigger Date and the per share
or per unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Class A Common Stock
or Class B Common Stock, as the case may be, on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock or
Equivalent Preferred Stock) less than the Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially
22
convertible). In case such subscription price may be paid by delivery of
consideration, part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for
a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation), cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or evidences of indebtedness, or
of subscription rights or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Market Price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock, and the denominator of
which shall be such Current Market Price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not
been fixed.
(d) (i) The Current Market Price per share of Class
A Common Stock or Class B Common Stock, as the case may be, on any date shall
be deemed to be (1) for the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the average of the
daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date (calculated according
to class), and (2) for purposes of computations made pursuant to Section
11(a)(iii) hereof, the average
23
of the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date (calculated according
to class); provided, however, that to the extent such 30 Trading Day period or
10 Trading Day period, as the case may be, includes Trading Days on or prior
to the date on which the Reincorporation is consummated, then the Current
Market Price shall be determined, (x) in the case of the Class A Common Stock,
by reference to the daily closing prices per share for The News Corporation
Limited's Preferred ADSs (NYSE: NWSA), divided by two, for the number of
consecutive Trading Days short of 30 or 10, as the case may be, immediately
prior to November 2, 2004 and (y), in the case of the Class B Common Stock, by
reference to the daily closing prices per share for The News Corporation
Limited's ADSs (NYSE: NWS), divided by two, for the number of consecutive
Trading Days short of 30 or 10, as the case may be, immediately prior to
November 2, 2004; provided, further, that in the event that the Current Market
Price per share of the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the
Rights), or (B) any subdivision, combination or reclassification of such
Common Stock, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification shall
not have occurred prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth above, then, and in
each such case, the Current Market Price shall be properly adjusted to take
into account ex-dividend trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Common Stock selected by the Board. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such
date as
24
determined in good faith by the Board shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Class A Common Stock or Class B Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares
of Common Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not publicly held
or not so listed or traded, Current Market Price per share shall mean the fair
value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of Preferred Stock
shall be determined in the same manner as set forth above for the
Common Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the Current Market
Price per share of Preferred Stock shall be conclusively deemed to be
an amount equal to 1,000 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Class B Common Stock occurring
after the date of this Agreement) multiplied by the Current Market
Price per share of the Class B Common Stock. If neither the Class B
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in the Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock or other share or one-millionth of a
share of Preferred Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by
25
this Section 11 shall be made no later than the earlier of (i) three (3) years
from the date of the transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock other than Preferred Stock, thereafter the number of such other shares
so receivable upon exercise of any Right and the Purchase Price thereof shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one- thousandths of a share of Preferred Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment
as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a share of Preferred Stock (calculated
to the nearest one-millionth) obtained by (i) multiplying (x) the number of
one one-thousandths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of Rights, in lieu
of any adjustment in the number of one one-thousandths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of one one- thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one-ten-thousandth) obtained by
dividing the Purchase Price in effect
26
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 (with prompt written notice thereof to the Rights
Agent) of its election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per one one-thousandth of a share and the number of one one-thousandth of a
share which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if any, of
the number of one one-thousandths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-thousandths of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer (with prompt
written notice thereof
27
to the Rights Agent) until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the number of one
one-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets,
cash flow or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(o) hereof), if
(x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding
or agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale,
the stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section
28
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a fraction
the numerator which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate and (c) if a Distribution Date has occurred, mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any
29
adjustment or statement therein contained and shall have no duty or liability
with respect to, and shall not be deemed to have knowledge of, any adjustment
unless and until it shall have received such a certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets Cash Flow or Earning Power.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof and other
than in connection with the Reincorporation), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) and other than in connection with the
Reincorporation) shall consolidate with, or merge with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any
other property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one transaction
or a series of related transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof and other than
in connection with the Reincorporation), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of Common Stock
of the Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-thousandths of a share of Preferred
Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such one one-thousandths of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence of a Section 11(a)(ii) Event), and (2)
30
dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of
a sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction
described in clause (x) or (y) of the first sentence of Section
13(a) hereof, the Person that is the issuer of any securities into
which shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction
described in clause (z) of the first sentence of Section 13(a)
hereof, the Person that is the party receiving the greatest portion
of the assets, cash flow or earning power transferred pursuant to
such transaction or transactions; provided, however, that in any
such case, (1) if the Common Stock of such Person is not at such
time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal
Party" shall refer to such other Person; and (2) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of two or more of which are and have been so
registered, "Principal Party" shall
31
refer to whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have
a sufficient number of authorized shares of its Common Stock which have not
been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs (a)
and (b) of this Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration
statement under the Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date;
(ii) take all such other action as may be
necessary to enable the Principal Party to issue the securities
purchasable upon exercise of the Rights, including but not limited to
the registration or qualification of such securities under all
requisite securities laws of jurisdictions of the various states and
the listing of such securities on such exchanges and trading markets
as may be necessary or appropriate; and
(iii) will deliver to holders of the
Rights historical financial statements for the Principal Party and
each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
32
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, the Company shall pay to
the registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights,
selected by the Board. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are integral multiples
of one one-thousandth of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one one-thousandth of a share of Preferred Stock.
For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the closing price of a share of Preferred Stock
33
(as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one (1) share of Common
Stock. For purposes of this Section 14(c), the current market value of one
share of Common Stock shall be the closing price per share of Common Stock (as
determined pursuant to Section 11(d)(i) hereof) on the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives its right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 and Section 20, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
its own behalf and for its own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, its right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
34
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent
if surrendered at the office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree
or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
number of one one- thousandths of a share of Preferred Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
35
affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and to
reimburse the Rights Agent for all reasonable expenses, counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, judgment, fine, penalty, claim, demand,
settlement, damage, cost, liability or expense, including, without limitation
the reasonable fees and expenses of counsel, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for any action taken, suffered or omitted by the Rights Agent pursuant to this
Agreement or in connection with the acceptance, administration, exercise and
performance of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises. The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the
Company. Any liability of the Rights Agent under this Agreement will be
limited to the amount of fees paid by the Company to the Rights Agent. The
indemnity provided for herein shall survive the termination of this Agreement,
the exercise or expiration of the Rights, and the resignation or removal of
the Rights Agent.
(b) The Rights Agent shall be fully protected and
authorized and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.
36
(a) Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any Person resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any Person succeeding
to the corporate trust, stock transfer or other stockholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto; but only if
such Person would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes to perform only the duties and obligations imposed by this
Agreement, upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under
this
37
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of Current Market Price) be proved or established by the
Company prior to taking, suffering or omitting any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for in respect of
any action taken, suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and other Person only for its own gross negligence, bad faith or
willful misconduct. In no case, however, will the Rights Agent be liable for
special, indirect, punitive, incidental or consequential losses or damages of
any kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the possibility of such damages.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify the same
(except as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or
in respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment required under the provisions
of Section 11, Section 13 or Section 24 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt of the
certificate described in Section 12, upon which the Rights Agent may rely);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock
or Preferred Stock to be
38
issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such instructions shall be
full authorization and protection to the Rights Agent and the Rights Agent
shall not be liable for or in respect of any action taken, suffered or omitted
by it in good faith in accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions. The Rights Agent
shall be fully authorized and protected in relying upon the most recent
instructions received from any such officers.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent and any such stockholder, director, officer or employee of the
Rights Agent from acting in any other capacity for the Company or for any
other Person.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection and continued
employment thereof.
39
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers if there shall be reasonable
grounds for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the
case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company, and
to each transfer agent of the Common Stock and Preferred Stock, by registered
or certified mail, and, if such resignation occurs after the Distribution
Date, to the registered holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and, if
such removal occurs after the Distribution Date, to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of thirty (30) days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a Person organized
and doing business under the laws of the United States or any State thereof,
in good standing, which is authorized under such laws to exercise corporate
trust, stock transfer or stockholder services powers and which at the time of
its appointment as Rights Agent has, or with its parent has, a combined
capital and surplus of at least $25,000,000 or (b) an affiliate of a Person
described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with
40
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent under this Agreement without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock and the Preferred Stock,
and, if such appointment occurs after the Distribution Date, mail a notice
thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i)
no such Rights Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior
to the earlier of (i) the close of business on the tenth Business Day
following the Stock
41
Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior
to the Record Date, the close of business on the tenth Business Day following
the Record Date), or (ii) the Final Expiration Date, (x) redeem all but not
less than all of the then outstanding Rights at a redemption price of $0.001
per Right (rounded up to the nearest whole $0.01 in the case of any holder
whose holdings are not in a multiple of ten), as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price") or (y) amend this Agreement
to change the Final Expiration Date to another date, including without
limitation an earlier date. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's right
of redemption hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the Current Market
Price, as defined in Section 11(d)(i) hereof, of the Common Stock at the time
of redemption) or any other form of consideration deemed appropriate by the
Board.
(b) Immediately upon the action of the Board
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board ordering the redemption
of the Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
Section 24. Exchange.
(a) The Board may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable (i) Class A Rights (which shall not include Class
A Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for Class A Common Stock at an exchange ratio of one share of Class A
Common Stock per Class A Right and (ii) Class B Rights (which shall not
include Class B Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for Class B Common Stock at
42
an exchange ratio of one share of Class B Common Stock per Class B Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Voting Capital Stock then outstanding.
(b) Immediately upon the action of the Board
ordering the exchange of any Class A Rights or Class B Rights pursuant to
subsection (a) of this Section 24 and without any further action and without
any notice, the right to exercise such (i) Class A Rights shall terminate and
the only right thereafter of a holder of such Class A Rights shall be to
receive that number of shares of Class A Common Stock equal to the number of
such Class A Rights held by such holder multiplied by the Exchange Ratio and
(ii) Class B Rights shall terminate and the only right thereafter of a holder
of Class B Rights shall be to receive that number of shares of Class B Common
Stock equal to the number of such Class B 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 Class A Common Stock for Class A Rights and Class B Common
Stock for Class B Rights will be effected and, in the event of any partial
exchange, the number of Class A Rights and Class B Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Class A Rights or Class B Rights (other than Class A Rights or Class B
Rights which have become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Class A Rights or Class B Rights.
(c) In any exchange pursuant to this Section 24,
the Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11
hereof) for Class A Common Stock exchangeable for Class A Rights or Class B
Common Stock exchangeable for Class B Rights, at the initial rate of one
one-thousandth of a share
43
of Preferred Stock (or Equivalent Preferred Stock) for each share of Class A
Common Stock or Class B Common Stock, as the case may be, as appropriately
adjusted to reflect stock splits, stock dividends and other similar
transactions after the date hereof.
(d) In the event that there shall not be sufficient
shares of Class A Common Stock or Class B Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Class A
Rights or Class B Rights, as the case may be, as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Class A Common Stock or Class B
Common Stock for issuance upon exchange of the Class A Rights or Class B
Rights, as the case may be.
(e) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional shares
of Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of
this subsection (e), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution to
the holders of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the
assets, cash flow or earning power of
44
the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to the Rights Agent and to each holder
of a Rights Certificate, to the extent feasible and in accordance with Section
26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least twenty
(20) days prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Preferred Stock, whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall as
soon as practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 26 hereof, and to the
Rights Agent in accordance with Section 26 hereof, a notice of the occurrence
of such event, which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references
in the preceding paragraph to Preferred Stock shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing by the Rights Agent with the Company) as follows:
45
News Corporation, Inc.
1211 Avenue of the Americas
New York, NY 10036
Attention: General Counsel
Fax: (212) 852-7896
Phone: (212) 852-7000
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Rights Agent with the Company) as follows:
Computershare Investor Services, LLC
#2 North LaSalle Street
Chicago, IL 60602
Attn: Blanche Hurt, General Counsel
Fax: (312) 601-4340
Phone: (312) 588-4247
with copies to:
Georgeson Shareholder Communications
17 State Street
26th Floor
New York, NY 10004
Attn: Paul Conn
Fax: (212) 806-6898
Phone: (212) 805-7154
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of
certificates representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval
46
of any holders of certificates representing shares of Common Stock. From and
after the Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock. Notwithstanding anything herein to
the contrary, this Agreement may not be amended (other than pursuant to
clauses (i) or (ii) of the preceding sentence) at a time when the Rights are
not redeemable.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock or any other class of capital stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of
47
the Rights and all other parties, and (y) not subject the Board, or any of the
directors on the Board to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the close of
business on the tenth Business Day following the date of such determination by
the Board. Without limiting the foregoing, if any provision requiring a
specific group of directors of the Company to act is held to by any court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board in
accordance with applicable law and the Company's Amended and Restated
Certificate of Incorporation, as amended, and By-laws.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
48
Section 34. Descriptive Headings. Descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
49
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
Attest: NEWS CORPORATION, INC.
By /s/ David F. Devoe By /s/ Arthur M. Siskind
---------------------------------------- -----------------------------------------
Name: David F. Devoe Name: Arthur M. Siskind
Title: Senior Executive Title: Senior Executive
Vice President Vice President
Attest: COMPUTERSHARE INVESTOR
SERVICES, LLC,
as Rights Agent
By /s/ Blanche Hurt By /s/Cynthia Nisley
------------------------------------------ -----------------------------------------
Name: Blanche Hurt Name: Cynthia Nisley
Title: General Counsel and Secretary Title: Director - Relationship
Management
50
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
NEWS CORPORATION, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned, [____], [TITLE], and [_____], [TITLE],
of News Corporation, Inc., a Delaware corporation (hereinafter called the
"Corporation"), pursuant to the provisions of Sections 103 and 151 of the
General Corporation Law of the State of Delaware, do hereby make this
Certificate of Designation and do hereby state and certify that pursuant to
the authority expressly vested in the Board of Directors of the Corporation by
the Amended and Restated Certificate of Incorporation, the Board of Directors
duly adopted the following resolutions:
RESOLVED, that, pursuant to Section 1(a) of the Amended and
Restated Certificate of Incorporation (which authorizes 100,000,000 shares of
preferred stock, $0.01 par value per share ("Preferred Stock") of which none
have already been designated), the Board of Directors hereby fixes the powers,
designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions, of a
series of Preferred Stock;
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Amended and Restated Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
A-1
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 9,000,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the 1st day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $0.10 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount
of all cash dividends, and 1,000 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Class B Common Stock of the Corporation 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 Junior Participating Preferred Stock. In the event the
Corporation shall at any time after November 8, 2004 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in Paragraph
(A) above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no
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dividend or distribution 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 $0.10 per share on the Series A
Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series A Junior Participating Preferred Stock, 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 issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive 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 unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Junior Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to one (1) vote on all matters submitted to a vote
of the stockholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which holders
of shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number
by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and
A-3
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 or by law, the
holders of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six
(6) quarterly dividends thereon, the occurrence of such contingency shall mark
the beginning of a period (herein called a "default period") which shall
extend until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on
all shares of Series A Junior Participating Preferred Stock then outstanding
shall have been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in arrears in an
amount equal to six (6) quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two (2) directors.
(ii) During any default period, such
voting right of the holders of Series A Junior Participating
Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of directors shall
be exercised unless the holders of ten percent (10%) in number of
shares of Preferred Stock outstanding shall be present in person or
by proxy. The absence of a quorum of the holders of Common Stock
shall not affect the exercise by the holders of Preferred Stock of
such voting right. At any meeting at which the holders of Preferred
Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to
elect directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two (2) directors or, if such
right is exercised at an annual meeting, to elect two (2) directors.
If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred
Stock shall have the right to make such increase in the number of
directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock
A-4
shall have exercised their right to elect directors in any default
period and during the continuance of such period, the number of
directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu with
the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred
Stock shall, during an existing default period, have previously
exercised their right to elect directors, the Board of Directors may
order, or any stockholder or stockholders owning in the aggregate
not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred Stock,
which meeting shall thereupon be called by the President, a
Vice-President or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Preferred
Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall
be given to each holder of record of Preferred Stock by mailing a
copy of such notice to him at his last address as the same appears
on the books of the Corporation. Such meeting shall be called for a
time not earlier than 20 days and not later than 60 days after such
order or request or in default of the calling of such meeting within
60 days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the
provisions of this Paragraph (C)(iii), no such special meeting shall
be called during the period within 60 days immediately preceding the
date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of
Common Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole number
of directors until the holders of Preferred Stock shall have
exercised their right to elect two (2) directors voting as a class,
after the exercise of which right (x) the directors so elected by the
holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in Paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class
A-5
of stock which elected the director whose office shall have become
vacant. References in this Paragraph (C) to directors elected by the
holders of a particular class of stock shall include directors
elected by such directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a
default period, (x) the right of the holders of Preferred Stock as a
class to elect directors shall cease, (y) the term of any directors
elected by the holders of Preferred Stock as a class shall terminate,
and (z) the number of directors shall be such number as may be
provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of
Paragraph (C)(ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the
certificate of incorporation or by-laws). Any vacancies in the Board
of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining
directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Junior Participating Preferred Stock outstanding shall have been paid
in full, the Corporation shall not
(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make
any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock, except
dividends paid
A-6
ratably on the Series A Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise
acquire
for consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating 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 to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking
A-7
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Junior Participating Preferred Stock unless, prior thereto,
the holders of shares of Series A Junior Participating Preferred Stock shall
have received an amount equal to $1000 per share of Series A Participating
Preferred Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by (ii)
1,000 (as appropriately adjusted as set forth in subparagraph (C) below to
reflect such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of
Series A Junior Participating Preferred Stock and Common Stock, respectively,
holders of Series A Junior Participating Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series A Junior Participating
Preferred Stock, then such remaining assets shall be distributed ratably to
the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
A-8
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case the shares of Series A Junior Participating Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series
A Junior Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior
to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
Section 10. Amendment. At any time when any shares of Series
A Junior Participating Preferred Stock are outstanding, the Amended and
Restated Certificate of Incorporation of the Corporation shall not be amended
in any manner which would materially alter or change the powers, preferences
or special rights of the Series A Junior Participating Preferred Stock so as
to affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Junior Participating
Preferred Stock.
A-9
Section 12. Certain Definitions. As used herein with
respect to the Series A Junior Participating Preferred Stock, the following
terms shall have the following meanings:
(A) The term "Class A Common Stock" means the class
of common stock designated as the Class A common stock, par value $0.01 per
share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of the common stock.
(B) The term "Class B Common Stock" means the class
of common stock designated as the Class B common stock, par value $0.01 per
share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of the common stock.
(C) The term "Common Stock" means the common stock,
par value $0.01 per share, of the Corporation at the date hereof or any other
stock resulting from successive changes or reclassifications of the common
stock, and includes both the Class A Common Stock and the Class B Common
Stock.
A-10
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this 8th
day of November, 2004.
----------------------------------
[NAME]
--------------------------------------------
Attest:
--------------------------------------------
[NAME]
A-11
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER NOVEMBER 8, 2005, UNLESS EXTENDED PRIOR THERETO BY THE
BOARD OF DIRECTORS OF THE COMPANY, OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM
IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Class [A][B] Rights Certificate
NEWS CORPORATION, INC.
--------
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
B-1
This certifies that ______________________, or registered assigns, is
the registered owner of the number of Class [A][B]1 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 November 8, 2004 (the "Rights
Agreement"), between News Corporation, Inc. a Delaware corporation (the
"Company"), and Computershare Investor Services, LLC, a Delaware limited
liability company (the "Rights Agent"), to purchase from the Company at any
time prior to 5:00 P.M. (New York City time) on November 8, 2005 (unless such
date is extended prior thereto by the Board of Directors) at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-thousandth of a fully paid, non-assessable share of
Series A Junior Participating Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $80 per one one-thousandth of a share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly executed.
The number of Rights evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of November 18, 2004, based on the Preferred Stock as constituted at such
date. The Company reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights Agreement) that a
number of Rights be exercised so that only whole shares of Preferred Stock
will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
--------
1 Wherever the designation [A][B] is used, the form A should be
inserted for Class A Right and the form B should be inserted for
Class B Rights
B-2
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-thousandths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Class [A][B] Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $0.001 per Right at any time prior to the
earlier of the close of business on (i) the tenth Business Day following the
Stock Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement), and (ii) the Final Expiration Date. In addition, under
certain circumstances following the Stock Acquisition Date, the Rights may be
exchanged, in whole or in part, for shares of the Class [A][B] Common Stock,
or shares of preferred stock of the Company having essentially the same value
or economic rights as such shares. Immediately upon the action of the Board of
Directors of the Company authorizing any such exchange, and without any
further action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only enable
holders to receive the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement. The Company, at its election, may require that a number of
Rights be exercised so that only whole shares of Preferred Stock would be
issued.
B-3
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give consent to or withhold consent from any
corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
B-4
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of ______ __, ____
ATTEST: NEWS CORPORATION, INC.
By
-------------------------------------------- ---------------------------------------------
Secretary Title:
Countersigned:
COMPUTERSHARE INVESTOR SERVICES, LLC,
as Rights Agent
By
------------------------------------------
Authorized Signature
B-5
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights
Certificate.)
FOR VALUE RECEIVED
----------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________
Attorney, to transfer the within Rights Certificate on the books of the within
named Company, with full power of substitution.
Dated: __________________,__
__________________________________
Signature
Signature Guaranteed:
B-6
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, __
--------------------------------------------
Signature
Signature Guaranteed:
B-7
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
B-8
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: NEWS CORPORATION, INC.:
The undersigned hereby irrevocably elects to exercise
__________ Class [A][B] Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the balance
of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated: _______________,__
___________________________________
Signature
B-9
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: ______________,__
------------------------------------
Signature
Signature Guaranteed:
B-10
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever.
B-11
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On November 8, 2004, the Board of Directors of News
Corporation, Inc. (the "Company") authorized and declared a dividend
distribution of one right (a "Class A Right") for each outstanding share of
Class A common stock, par value $0.01 per share, of the Company (the "Class A
Common Stock" or "Nonvoting Common Stock") and one right (a "Class B Right"
and, together with the Class A Rights, the "Rights") for each outstanding
share of Class B common stock, par value $0.01 per share, of the Company (the
"Class B Common Stock" or "Voting Common Stock" and, together with the Class A
Common Stock, the "Common Stock") to stockholders of record at the close of
business on November 18, 2004 (the "Record Date"), with the payment of such
dividend being conditioned on the consummation of the transactions resulting
in the News Corporation Limited becoming an indirect subsidiary of the Company
(the "Reincorporation"). Each Right entitles the registered holder to purchase
from the Company a unit consisting of one one- thousandth of a share (a
"Unit") of Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "Series A Preferred Stock") at a Purchase Price of $80 per Unit,
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement"), dated as of November 8, 2004,
between the Company and Computershare Investor Services, LLC, a Delaware
limited liability company, as Rights Agent.
Initially, the Class A Rights will be attached to all shares
of Class A Common Stock then outstanding and the Class B Rights will be
attached to all shares of Class B Common Stock then outstanding, and no
separate Rights Certificates will be distributed. Subject to certain
exceptions specified in the Rights Agreement, the Rights will separate from
the Common Stock and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding shares of Class B
Common Stock and/or other class then entitled to vote for the election of
directors (the "Stock Acquisition Date"), other than as a result of
repurchases of stock by the Company or purchases by certain Exempt Persons or
(ii) 10 business days (or such later date as the Board shall determine)
following the commencement of a tender offer or exchange offer that would
result in a person or group becoming an Acquiring Person. An "Exempt Person"
means any of the following: (i) TNCL and any of its or the Company's
Subsidiaries or controlled Affiliates, (ii) each of K. Rupert Murdoch and any
executor, administrator, guardian, conservator or similar legal representative
thereof, any member of the immediate family of K. Rupert Murdoch, Cruden
C-1
Investments Pty. Limited, an Australia company, and any successor (by merger,
consolidation, transfer of assets or otherwise) to all or substantially all of
its business and assets and any settlement and trusts, and any entities which
are controlled by settlements and trusts, set up for the benefit of K. Rupert
Murdoch or members of his family (either exclusively or among others) and
(iii) Liberty Media Corporation, a Delaware corporation, and its Affiliates,
but, with respect to clauses (ii) and (iii) of this paragraph, each such
Exempt Person shall be considered an Exempt Person only to the extent that the
shares of Voting Capital Stock Beneficially Owned by each such Exempt Person
do not exceed the number of shares (A) which both (1) are Beneficially Owned
by such Exempt Person on the Rights Dividend Declaration Date and (2) have
been publicly disclosed as being Beneficially Owned by such Exempt Person (in
a filing with the U.S. Securities and Exchange Commission or the Australian
Securities and Investments Commission or in a press release of such Exempt
Person) on or prior to the Rights Dividend Declaration Date, plus (B) any
additional shares of Capital Stock representing not more than one percent (1%)
of the Voting Capital Stock then outstanding.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
Pursuant to the Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date
and will expire at 5:00 P.M. (New York City time) on November 8, 2005 (the
"Final Expiration Date"), unless the Rights Agreement is earlier terminated or
such date is extended or the Rights are earlier redeemed or exchanged by the
Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that a Person becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
(i) Class A Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the
exercise price of the Class A Right or (ii) Class B Common Stock (or, in
certain circumstances, cash, property or other
C-2
securities of the Company) having a value equal to two times the exercise
price of the Class B Right. Notwithstanding any of the foregoing, following
the occurrence of the event described in this paragraph, all Rights that are,
or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the event set forth
above until such time as the Rights are no longer redeemable by the Company as
set forth below.
For example, at an exercise price of $80 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following the event described in the preceding paragraph would entitle its
holder to purchase $160 worth of Common Stock (or other consideration, as
noted above) for $80. Assuming that the Common Stock had a per share value of
$20 at such time, the holder of each valid Right would be entitled to purchase
8 shares of Common Stock for $80.
In the event that, at any time following the Stock
Acquisition Date, other than in connection with the Reincorporation,(i) the
Company engages in a merger or other business combination transaction in which
the Company is not the surviving corporation, (ii) the Company engages in a
merger or other business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is changed or
exchanged, or (iii) 50% or more of the Company's assets, cash flow or earning
power is sold or transferred, each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events set forth in
this paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Voting Capital Stock, the Board may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, for Common Stock or Preferred Stock at an exchange ratio of one share
of Common Stock, or one one- thousandth of a share of Preferred Stock (or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
C-3
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading date prior to the date of exercise.
At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.001 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors) or amend the
Rights Agreement to change the Final Expiration Date to another date,
including without limitation an earlier date. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$0.001 redemption price.
Until a Right is exercised, the holder thereof, as such,
will have no separate rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends in respect of
the Rights. While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company or in the event of the redemption of the
Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement. The foregoing notwithstanding, no
amendment may be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been or will be filed
with the Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A of the Company and as an Exhibit to a Report of Foreign
Issuer on Form 6-K. A copy of the Rights Agreement is available free of charge
from the Rights Agent. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
C-4
EXHIBIT C
Summary Description of Rights.
On November 8, 2004, the Board of Directors of News
Corporation, Inc. (the"Company"), a Delaware corporation, authorized and
declared a dividend distribution of one right (a "Class A Right") for each
outstanding share of Class A common stock, par value $0.01 per share, of the
Company (the "Class A Common Stock" or "Nonvoting Common Stock") and one right
(a "Class B Right" and, together with the Class A Rights, the "Rights") for
each outstanding share of Class B common stock, par value $0.01 per share, of
the Company (the "Class B Common Stock" or "Voting Common Stock" and, together
with the Class A Common Stock, the "Common Stock") to stockholders of record
at the close of business on November 18, 2004 (the "Record Date"), with the
payment of such dividend being conditioned on the consummation of the
transactions resulting in The News Corporation Limited ("News Corporation")
becoming an indirect subsidiary of the Company in News Corporation's
previously announced "reincorporation" transaction in which the Company will
issue shares of its capital stock to stockholders of News Corporation in
exchange for their shares of News Corporation capital stock that are being
cancelled in connection therewith. Each Right entitles the registered holder
to purchase from the Company a unit consisting of one one-thousandth of a
share (a "Unit") of Series A Junior Participating Preferred Stock, par value
$0.01 per share (the "Series A Preferred Stock") at a Purchase Price of $80
per Unit, subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement"), dated as of November
8, 2004, between the Company and Computershare Investor Services, LLC, a
Delaware limited liability company, as Rights Agent.
Initially, the Class A Rights will be attached to all shares
of Class A Common Stock then outstanding and the Class B Rights will be
attached to all shares of Class B Common Stock then outstanding, and no
separate Rights Certificates will be distributed. Subject to certain
exceptions specified in the Rights Agreement, the Rights will separate from
the Common Stock and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding shares of Class B
Common Stock and/or other class then entitled to vote for the election of
directors he "Stock Acquisition Date"), other than as a result of repurchases
of stock by the Company or purchases by certain Exempt Persons or (ii) 10
business days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a person
or group becoming an Acquiring Person. An "Exempt Person" is any of the
following: (i) TNCL and any of its or the Company's Subsidiaries or controlled
Affiliates, (ii) each of K. Rupert Murdoch and any executor, administrator,
guardian, conservator or similar legal representative thereof, any member of
the immediate family of K. Rupert Murdoch, Cruden Investments Pty. Limited, an
Australia company, and any successor (by merger, consolidation, transfer of
assets or otherwise) to all or substantially all of its business and assets
and any settlement and trusts, and any entities which are controlled by
settlements and trusts, set up for the benefit of K. Rupert Murdoch or members
of his family (either exclusively or among others) and (iii) Liberty Media
Corporation, a Delaware corporation, and its Affiliates, but, with respect to
clauses (ii) and (iii) of this paragraph, each such Exempt Person shall be
considered an Exempt Person only to the extent that the shares of Voting
Capital Stock Beneficially Owned by each such Exempt Person do not exceed the
number of shares (A) which both (1) are Beneficially Owned by such Exempt
Person on the Rights Dividend Declaration Date and (2) have been publicly
disclosed as being Beneficially Owned by such Exempt Person (in a filing with
the U.S. Securities and Exchange Commission or the Australian Securities and
Investments Commission or in a press release of such Exempt Person) on or
prior to the Rights Dividend Declaration Date, plus (B) any additional shares
of Capital Stock representing not more than one percent (1%) of the Voting
Capital Stock then outstanding.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
Pursuant to the Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date
and will expire at 5:00 P.M. (New York City time) on November 8, 2005 (the
"Final Expiration Date"), unless the Rights Agreement is earlier terminated or
such date is extended or the Rights are earlier redeemed or exchanged by the
Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that a Person becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
(i) Class A Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the
exercise price of the Class A Right or (ii) Class B Common Stock (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Class B Right.
Notwithstanding any of the foregoing, following the occurrence of the event
described in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $80 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following the event described in the preceding paragraph would entitle its
holder to purchase $160 worth of Common Stock (or other consideration, as
noted above) for $80. Assuming that the Common Stock had a per share value of
$20 at such time, the holder of each valid Right would be entitled to purchase
8 shares of Common Stock for $80.
In the event that, at any time following the Stock
Acquisition Date, other than in connection with the Reincorporation,(i) the
Company engages in a merger or other business combination transaction in which
the Company is not the surviving corporation, (ii) the Company engages in a
merger or other business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is changed or
exchanged, or (iii) 50% or more of the Company's assets, cash flow or earning
power is sold or transferred, each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events set forth in
this paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Voting Capital Stock, the Board may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, for Common Stock or Preferred Stock at an exchange ratio of one share
of Common Stock, or one one-thousandth of a share of Preferred Stock (or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading date prior to the date of exercise.
At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.001 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors) or amend the
Rights Agreement to change the Final Expiration Date to another date,
including without limitation an earlier date. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$0.001 redemption price.
Until a Right is exercised, the holder thereof, as such,
will have no separate rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends in respect of
the Rights. While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company or in the event of the redemption of the
Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement. The foregoing notwithstanding, no
amendment may be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been or will be filed
with the Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A of the Company and as an Exhibit to a Report of Foreign
Issuer on Form 6-K. A copy of the Rights Agreement is available free of charge
from the Rights Agent. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.