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EXHIBIT 4.1
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RIGHTS AGREEMENT
between
▇▇▇▇▇▇ DRILLING COMPANY
and
NORWEST BANK MINNESOTA, N.A.,
as Rights Agent
Dated as of July 14, 1998
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RIGHTS AGREEMENT
This Rights Agreement, dated as of July 14, 1998, is between ▇▇▇▇▇▇
Drilling Company, a Delaware corporation (the "Company"), and Norwest Bank
Minnesota, N.A., as Rights Agent.
WHEREAS, the Board of Directors of the Company, having determined its
actions to be in the interests of the Company, has authorized the creation of
Rights, has authorized and directed the issuance to the holders of record of
Common Shares of the Company outstanding on July 15, 1998 of one Right with
respect to each Common Share of the Company outstanding on July 15, 1998, and
has further authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between July 15, 1998 and the
earlier of the Distribution Date, the Redemption Date and the Final Expiration
Date; and
WHEREAS, the Board of Directors of the Company has authorized and
directed that the terms and conditions under which the Rights are to be
distributed, including without limitation those affecting the exercise thereof,
the securities or other property to be acquired thereby and the purchase price
to be paid therefor, shall be set forth in a written agreement between the
Company and a rights agent made for the benefit of the holders of the Rights to
the extent so provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or that, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Voting Shares of the Company
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 entity holding
Voting Shares for or pursuant to any such plan, or (iv) the
Grandfathered Stockholder: provided, however, that if, (X) the
Grandfathered Stockholder acquires additional Voting Shares after the
date hereof and the Grandfathered Stockholder's Beneficial Ownership
of Voting Shares exceeds 20% of the Voting Shares then outstanding
or (Y) the Grandfathered Stockholder files a Schedule 13D with the
Securities and Exchange Commission disclosing that the Grandfathered
Stockholder now holds the Voting Shares with any purpose of, or with
the effect of, changing or influencing the control of the Company, or
in connection with or as a participant in any transaction having
such purpose or effect, including any transaction under Rule 13d-3(b)
under the Exchange Act and the Grandfathered Stockholder's Beneficial
Ownership of Voting Shares equals 15% or more, then the Grandfathered
Stockholder shall become an Acquiring Person. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Voting Shares by the Company that, by reducing
the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 15% or more of the
Voting Shares of the Company then outstanding; provided, however,
that, if a Person shall become the Beneficial Owner of 15% or more of
the Voting Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company and at a time when
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such Person is the Beneficial Owner of 15% or more of the Voting
Shares of the Company then outstanding, become the Beneficial Owner of
any additional Voting Shares of the Company, then such Person shall be
deemed to be an "Acquiring Person". Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person", as defined
pursuant to the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests as promptly as practicable
a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.
"Agreement" shall mean this Rights Agreement as hereafter
amended from time to time.
"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 as in effect on the date of this
Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "own beneficially" any securities that (without
duplication):
(i) such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, within the
meaning of either Section 13 or 16 of the Exchange Act;
(ii) such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting or disposing of any securities of the Company; provided,
however, that, for purposes of each clause of this definition, a
Person shall not be deemed the Beneficial Owner of, or to own
beneficially, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; provided, further, that, for purposes of
each clause of this definition, a Person shall not be deemed the
Beneficial Owner of, or to own beneficially, any security as a result
of any agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding (1) arises solely from
a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
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accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report);
and provided, further, that notwithstanding anything to the foregoing
to the contrary, a Person engaged in the business of underwriting
securities shall not be deemed the "Beneficial Owner" of, or to "own
beneficially", any securities acquired in good faith in a firm
commitment underwriting until the expiration of 40 days after the date
of such acquisition.
Notwithstanding anything in this definition to the contrary,
the phrase "then outstanding", when used with reference to a Person's
Beneficial Ownership of securities of the Company (or to the number of
such securities "beneficially owned"), shall mean the number of such
securities then issued and outstanding together with the number of
such securities not then actually issued and outstanding that such
Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Oklahoma
(or the state wherein the Corporate Trust Office is located) are
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Eastern time, on the next
succeeding Business Day.
"Closing Price", with respect to any security, shall mean the
last sale price, regular way, on a specific Trading Day or, in case no
such sale takes place on such Trading 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 such security is not then 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 such
security is listed or admitted to trading or, if such security is not
then 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, Inc.
Automated Quotations System or such other system then in use, or, if
on any such Trading Day such security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Company. If such
security is not publicly held or so listed or traded, "Closing Price"
shall mean the fair value per unit of such security as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall
mean shares of capital stock of the Company that have no preference
over any other class of stock with respect to dividends or assets,
that are not redeemable at the option of the Company and with respect
to which no sinking, purchase or similar fund is provided and shall
initially mean the shares of Common Stock, par value $ 0.16 2/3 per
share, of the Company. "Common Shares"
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when used with reference to any Person other than the Company shall,
if used with reference to a corporation, mean the capital stock (or
equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person
or Persons that ultimately control such first-mentioned Person and, if
used with reference to any Person other than a corporation, mean the
equity interest in such Person (or, if the net worth determined in
accordance with generally accepted accounting principles of another
Person (other than an individual) that controls such first-mentioned
Person is greater than such first-mentioned Person, then such other
Person) with the greatest voting power or managerial power with
respect to the business and affairs of such Person.
"Company" shall mean ▇▇▇▇▇▇ Drilling Company, a Delaware
corporation, and its successors.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman of the Board, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Rights
Agent.
"Continuing Director" shall mean a Person who was a member of
the Board of Directors of the Company elected by the public
stockholders of the Company prior to the date hereof, or a Person
recommended to succeed a Continuing Director by a majority of
Continuing Directors.
"Corporate Trust Office" means the principal office of the
Rights Agent at which it administers its corporate trust business,
which, in the case of Norwest Bank Minnesota, N.A. shall, until
hereafter changed, be its office at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Account Manager.
"Distribution Date" shall mean the earlier of (i) the tenth
Business Day after the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of commencement 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 entity
holding Voting Shares for or pursuant to the terms of any such plan)
of, or after the date of the first public announcement of the intent
of 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 entity holding Voting Shares for or pursuant to the
terms of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming an Acquiring
Person; provided, however, that an occurrence described in clause (ii)
of this definition above shall not cause the occurrence of the
Distribution Date if the Board of Directors of the Company shall,
prior to such tenth Business Day (or such later date as described in
clause (ii) above), determine that such tender or exchange offer is
spurious, unless, thereafter, the Board of Directors of the Company
shall make a contrary determination, in which event the Distribution
Date shall occur on the later to occur of such tenth Business Day (or
such later date as described in clause (ii) above) and the date of
such latter determination.
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"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on
June 30, 2008.
"Grandfathered Stockholder" shall mean, collectively,
Equitable Companies/Alliance Capital, its Affiliates and all
successors to such entities.
"Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, trust or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
"Preferred Shares" shall mean shares of Junior Participating
Preferred Stock, par value $1.00 per share, of the Company having the
rights and preferences set forth in the form of Statement of
Resolution Establishing Series of Shares of Junior Participating
Preferred Stock attached hereto as Exhibit A.
"Purchase Price" shall mean the initial price at which the
holder of a Right may, subject to the terms and conditions of this
Agreement, purchase one one-thousandth (1/1000) of a Preferred Share
(which initial price is set forth in Section 8(b) hereof), as such
price shall be adjusted pursuant to the terms of this Agreement.
"Redemption Date" shall mean the time at which the Rights are
redeemed pursuant to Section 24 hereof or the time at which all of the
Rights are mandatorily redeemed and exchanged pursuant to Section 25
hereof.
"Redemption Price" shall have the meaning specified in Section
24(b) herein.
"Right" shall mean one preferred share purchase right which
initially represents the right of the registered holder thereof to
purchase one one-thousandth (1/1000) of a Preferred Share upon the
terms and subject to the conditions herein set forth.
"Right Certificate" shall mean a certificate, in substantially
the form of Exhibit B attached to this Agreement, evidencing the
Rights registered in the name of the holder thereof.
"Rights Agent" shall mean Norwest Bank Minnesota, N.A., and
any successor thereto appointed in accordance with the terms hereof,
in its capacity as agent for the Company and the holders of the Rights
pursuant to this Agreement.
"Rights Register" and "Rights Registrar" shall have the
meanings specified in Section 6.
"Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include
without limitation a report filed pursuant to Section 13(d) or Section
16(a) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
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"Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the outstanding capital stock or other
equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
"Summary of Rights" shall mean a Summary of Rights to Purchase
Preferred Shares in substantially the form attached as Exhibit C to
this Agreement.
"Trading Day" shall mean a day on which the principal national
securities exchange or the NASDAQ National Market (or successor
thereto) on which any of the Voting Shares of the Company are listed
or admitted to trading is open for the transaction of business or, if
none of the Voting Shares of the Company is listed or admitted to
trading on any national stock exchange or the NASDAQ National Market
(or successor thereto), a Business Day.
"Transaction" shall mean any merger, consolidation or sale of
assets or earning power described in Section 14(a) hereof or any
acquisition of shares of Voting Shares of the Company which would
result in a Person becoming a Transaction Person.
"Transaction Person" with respect to a Transaction shall mean
(x) any Person who (i) is or will become an Acquiring Person if the
Transaction were to be consummated and (ii) directly or indirectly
proposed or nominated a director of the Company which director is in
office at the time of consideration of the Transaction, or (y) an
Affiliate or Associate of such a Person.
"Voting Shares" shall mean (i) the Common Shares of the
Company and (ii) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger or
consolidation of the Company, any sale of all or substantially all of
the Company's assets or any liquidation, dissolution or winding up of
the Company. Whenever any provision of this Agreement requires a
determination of whether a number of Voting Shares comprising a
specified percentage of such Voting Shares is, was or will be
beneficially owned or has been voted, tendered, acquired, sold or
otherwise disposed of or a determination of whether a Person has
offered or proposed to acquire a number of Voting Shares comprising
such specified percentage, the number of Voting Shares comprising such
specified percentage of Voting Shares shall in every such case be
deemed to be the number of Voting Shares comprising the specified
percentage of all the Company's then outstanding Voting Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any
corporation or other entity all the outstanding capital stock or other
equity interests of which having ordinary voting power in the election
of directors or similar officials (other than directors' qualifying
shares or similar interests) are owned, directly or indirectly, by
such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
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Section 3. Issuance of Right Certificates. (a) From and after July
15, 1998 until the Distribution Date, (i) outstanding Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for outstanding Common Shares of the Company and not by separate
Right Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Rights Agent
will send, by first-class, insured, postage-prepaid mail, to each record holder
of Common Shares of the Company as of the Close of Business on the Distribution
Date, at the address of such holder shown on the stock transfer records of the
Company, a Right Certificate evidencing one Right for each Common Share so
held. From and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On July 22, 1998, or as soon thereafter as
practicable, the Company will send a copy of a Summary of Rights, by
first-class, postage-prepaid mail, to each record holder of Common Shares of
the Company as of the Close of Business on July 15, 1998, at the address of
such holder shown on the stock transfer records of the Company. With respect
to Common Shares of the Company outstanding on July 15, 1998, the certificates
evidencing such Common Shares shall, together with copies of such Summary of
Rights, thereafter also evidence the outstanding Rights (as such Rights may be
amended or supplemented) distributed with respect thereto until the earlier of
the Distribution Date or the date of surrender thereof to the Company's
transfer agent for registration of transfer or exchange of Common Shares of the
Company. Until the Distribution Date (or, if earlier, the Redemption Date or
Final Expiration Date), the surrender for registration of transfer or exchange
of any certificate for Common Shares of the Company outstanding as of the Close
of Business on July 15, 1998 with or without a copy of the Summary of Rights
attached thereto, shall also constitute the surrender for registration of
transfer or exchange of the outstanding Rights associated with the Common
Shares represented thereby.
(c) The Company agrees that, at any time after July 15,
1998 and prior to the Distribution Date (or, if earlier, the Redemption Date or
Final Expiration Date) at which it issues any of its Common Shares upon
original issue or out of treasury, it will concurrently distribute to the
holder of such Common Shares one Right for each such Common Share, which Right
shall be subject to the terms and provisions of this Agreement and will
evidence the right to purchase the same number of one one-thousandths (1/1000)
of a Preferred Share at the same Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares of the Company issued
after July 15, 1998 but prior to the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date, whether upon registration of
transfer or exchange of Common Shares of the Company outstanding on July 15,
1998 or upon original issue or out of treasury thereafter, shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between ▇▇▇▇▇▇
Drilling Company and Norwest Bank Minnesota, N.A., dated as of July
14, 1998 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of ▇▇▇▇▇▇ Drilling Company. 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.
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▇▇▇▇▇▇ Drilling Company will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a written
request therefor. As described in the Rights Agreement, Rights issued
to or acquired by any Acquiring Person or any Affiliate or Associate
thereof (each as defined in the Rights Agreement) shall, under certain
circumstances, become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender of any such certificate for registration of transfer or
exchange of the Common Shares evidenced thereby shall also constitute surrender
for registration of transfer or exchange of outstanding Rights (as such Rights
may be amended or supplemented) associated with the Common Shares represented
thereby.
(e) If the Company purchases or acquires any of its Common Shares
after July 15, 1998, but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with the Common
Shares that are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and
the forms of election to purchase Preferred Shares (or other securities) and of
assignment to be printed on the reverse thereof) shall in form and substance be
substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, 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 as may be necessary to conform to usage. Subject to the
provisions of Section 23 hereof, the Right Certificates, whenever issued, shall
be dated as of the date of authentication thereof, but, regardless of any
adjustments of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable (whether pursuant to this
Agreement or any future amendments or supplements to this Agreement), or both,
occurring after July 15, 1998 and prior to the date of such authentication,
such Right Certificates may, on their face, without invalidating or otherwise
affecting any such adjustment, expressly entitle the holders thereof to
purchase such number of Preferred Shares at the Purchase Price per one
one-thousandth (1/1000) of a Preferred Share as to which a Right would be
exercisable if the Distribution Date were July 15, 1998; no adjustment of the
Purchase Price or the number of Preferred Shares (or other securities) as to
which a Right is exercisable, or both, effected subsequent to the date of
authentication of any Right Certificate shall be invalidated or otherwise
affected by the fact that such adjustment is not expressly reflected on the
face or in the provisions of such Right Certificate.
Pending the preparation of definitive Right Certificates, the Company
may execute, and upon Company Order the Rights Agent shall authenticate and
send, by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares of the Company as of the Close of Business on the Distribution
Date, temporary Right Certificates that are printed, lithographed, typewritten,
mimeographed or otherwise produced substantially of the tenor of the definitive
Right Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Right Certificates may determine, as evidenced by their
execution of such Right Certificates.
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If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Right Certificates, the Company shall
execute and the Rights Agent shall authenticate and deliver in exchange
therefor one or more definitive Right Certificates, evidencing a like number of
Rights. Until so exchanged, the temporary Right Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Right Certificates.
Section 5. Execution, Authentication and Delivery. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on
the Right Certificates may be manual or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Right Certificate a certificate of authentication substantially in the
form provided for herein executed by the Rights Agent by manual signature, and
such certificate upon any Right Certificate shall be conclusive evidence, and
the only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a Rights Register (a "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Right Certificates
and of transfers of Rights. The Rights Agent is hereby appointed the registrar
and transfer agent (the "Rights Registrar") for the purpose of registering
Right Certificates and transfers of Rights as herein provided and the Rights
Agent agrees to maintain such Rights Register in accordance with such
regulations so long as it continues to be designated as Rights Registrar
hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
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At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates that the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.
If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Rights Agent that such Right
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Right Certificate, a new Right
Certificate of like tenor, for a like number of Rights and bearing a
registration number not contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its Corporate Trust Office, together with
payment of the Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share (or other securities) as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on the Final Expiration
Date, (ii) the time on the Redemption Date such Rights are optionally redeemed
as provided in Section 24 hereof or (iii) the time at which such Rights are
mandatorily redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-thousandth
(1/1000) of a Preferred Share pursuant to the exercise of a Right shall
initially be thirty dollars ($30.00), shall be subject to adjustment from time
to time as provided in Sections 12 and 14 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the securities to be purchased
and an amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 10 in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred Shares (or other securities) certificates for such
number of one one-thousandths of a Preferred Share (or other securities) as are
to be purchased and registered in such name or names as may be designated by
the registered holder of such Right Certificate or, if appropriate, in the name
of a depositary agent or its nominee, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, and (B)
requisition from a depositary agent appointed by the Company, if any,
depositary receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased and registered in such name or names as
may be designated by such holder (in which case certificates for the Preferred
Shares represented by such receipts shall be deposited by the transfer agent
with such depositary agent or its custodian), and the Company hereby directs
such depositary agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 15 hereof, (iii) promptly after
receipt of such certificates or depositary receipts registered in such name or
names as may be designated by such holder, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
such holder.
(d) If the registered holder of the Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equal to the Rights remaining unexercised shall
be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 15 hereof.
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Section 9. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer or
exchange shall, if surrendered to the Company or to any of its other agents, be
delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall so
cancel, any other Right Certificate purchased or acquired by the Company. The
Rights Agent shall deliver all canceled Right Certificates to the Company.
Section 10. Reservation and Availability of Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with Section 8;
provided, however, that the Company will not be required to reserve and keep
available Common Shares or Preferred Shares sufficient to permit the exercise
in full of all outstanding Rights pursuant to the adjustments set forth in
Section 12(a)(ii) or Section 14 until such time as the Rights become
exercisable pursuant to such adjustments.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares or Common Shares of the
Company issued upon exercise of Rights shall (subject to payment of the
Purchase Price) be duly authorized, validly issued, fully paid and
nonassessable. The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares (or depositary receipts therefor) or Common Shares
of the Company upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax that may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares or Common Shares of the Company upon exercise of Rights evidenced by
Right Certificates in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for transfer or exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
or Common Shares of the Company upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender thereof) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any certificate
for Preferred Shares or Common Shares of the Company is issued upon the
exercise of, or upon mandatory redemption and exchange of, Rights shall for all
purposes be deemed to have become the holder of record of the Preferred Shares
or Common Shares represented thereby on, and such certificate shall be
dated, (i) in the case of the exercise of Rights, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made, or (ii) in the
case of the mandatory redemption and exchange of Rights, the date of such
mandatory redemption and exchange; provided, however, that, if the date of such
surrender and payment or mandatory redemption and exchange is a date upon which
the transfer books of the Company for its Preferred Shares or Common Shares, as
the case may be, are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be
20
14
dated, the next succeeding Business Day on which such transfer books of the
Company are open. Prior to the exercise of (or the mandatory redemption and
exchange of) the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Shares (or Common
Shares of the Company) for which the Rights shall be exercisable, including
without limitation the rights 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 12. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of shares of capital stock
of the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into
a smaller number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 12(a), 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 capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised thereafter shall be entitled to receive, upon
payment of the Purchase Price for the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to such
date, the aggregate number and kind of shares of capital stock that, if such
Right had been duly exercised immediately prior to such date (at a time when
the Preferred Shares transfer books of the Company were open), such holder
would have acquired upon such exercise and been entitled to receive upon
payment or effectuation of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs that would require an adjustment under both Section
12(a)(i) and Section 12(a)(ii), the adjustment provided for in this Section
12(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 12(a)(ii).
(ii) Subject to action of the Board of Directors of the
Company pursuant to Section 25 of this Agreement, if any Person shall become an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one- thousandths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable and dividing that product by (y) 50% of the
then current per share market price of the Company's Common Shares (determined
pursuant to Section 12(d)) on the date such Person became an Acquiring Person.
If any Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action that would eliminate or
diminish the benefits intended to be afforded by the Rights.
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Notwithstanding any other provision of this Agreement, from and after
the time any Person shall become an Acquiring Person, any Rights that are or
were acquired or beneficially owned by any such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null and void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be issued
pursuant to this Agreement that represents Rights beneficially owned by an
Acquiring Person whose Rights would be null and void pursuant to the preceding
sentence or by any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or to
any Associate or Affiliate thereof or to any nominee (acting in its capacity as
such) of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or to
any Associate or Affiliate thereof or to any nominee (acting in its capacity as
such) of such Acquiring Person, Associate or Affiliate shall be canceled.
(iii) If on or after the Distribution Date there shall not be
sufficient Common Shares issued but not outstanding, or authorized but
unissued, to permit the exercise in full of all outstanding Rights in
accordance with the foregoing subparagraph (ii), the Company agrees to take all
such action as is within its power, including without limitation appropriate
action by its Board of Directors, as may be necessary to amend the Company's
certificate of incorporation to authorize additional Common Shares for issuance
upon exercise of the Rights. If, notwithstanding the foregoing, the
stockholders shall not approve an amendment to the Company's certificate of
incorporation authorizing such additional Common Shares, the adjustment
prescribed in Section 12(a)(ii) shall not be made but, in lieu thereof, each
holder of a Right shall have the right to receive, upon exercise thereof in
accordance with the terms of this Agreement, such number of one one-thousandths
of Preferred Shares as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of one one-thousandth of a
Preferred Share (determined pursuant to Section 12(d)) on the date such Person
became an Acquiring Person.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares
or equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than
the current per share market price of the Preferred Shares (determined pursuant
to Section 12(d) 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 Preferred Shares outstanding on such record date
plus the number of Preferred Shares that the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (together with the aggregate of any additional consideration required
upon conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current market price and
the denominator of which shall be the number of Preferred Shares
22
16
outstanding on such record date plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscription or purchase
(or into or for which the convertible or exchangeable securities so to be
offered are initially convertible or exchangeable); provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case all or part of such subscription
or purchase price may be paid in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the account of the
Company or any of its Subsidiaries shall not be deemed outstanding for the
purpose of any computation described in this Section 12(b). The adjustment
described in this Section 12(b) shall be made successively whenever such a
record date is fixed; and, if none of such rights, options or warrants is so
issued, the Purchase Price shall be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 12(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
Preferred Shares (determined pursuant to Section 12(d)) on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon the exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and, if such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price that would then be in effect if such record date had not
been fixed.
(d)(i) For the purpose of any computation hereunder, the "current per
share market price" of the Common Shares on any date shall be deemed to be the
average of the daily Closing Prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date; provided, however,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, the current per share market price of the Common Shares
shall be appropriately adjusted to reflect the current market price per Common
Share equivalent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in paragraph (i) of this
Section 12(d). If the current per share market price of the
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Preferred Shares cannot be determined in the manner provided above, the
"current per share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common Shares
(determined in the manner provided above) multiplied by one thousand.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided; however, that any adjustments that by reason of this
Section 12(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
12 shall be made to the nearest cent or to the nearest ten-millionth of a
Preferred Share or one ten-thousandth of any other share or security, as the
case may be, and references herein to the "number of one one-thousandths of a
Preferred Share" (or similar phrases) shall be construed to include fractions
of one one-thousandth of a Preferred Share. Notwithstanding the first sentence
of this Section 12(e), any adjustment required by this Section 12 shall be made
no later than the earlier of (i) three years from the date of the transaction
that requires such adjustment or (ii) the thirtieth day preceding the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
shares contained in this Section 12, and the provisions of this Agreement,
including without limitation Sections 8, 10, 11 and 14, with respect to the
Preferred Shares 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, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price pursuant
to Section 12(b) or 12(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price per one one-thousandth of a Preferred Share, that
number of one one-thousandths of a Preferred Share obtained by (i) multiplying
(x) the number of 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 outstanding in lieu of any
adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. 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
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by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. Until such
record date, however, any adjustment in the number of one one-thousandths of a
Preferred Share for which a Right shall be exercisable made as required by this
Agreement shall remain in effect. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 12(i), the
Company shall, as promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 15 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 Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and authenticated in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share that were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one- thousandth of the amount of
consideration per Preferred Share determined by the Board of Directors of the
Company to be capital, or below one one-thousandth of the par value, if any,
per Preferred Share issuable upon exercise of the Rights, the Company agrees to
take such corporate action as is within its power, including without limitation
appropriate action by its Board of Directors, and that is, in the opinion of
its counsel, necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-thousandths of Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Preferred Shares or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares or 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 ▇▇▇▇ or
other appropriate instrument evidencing such holder's right to receive such
additional securities upon the occurrence of the event requiring such
adjustment.
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(m) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Preferred Shares, issuance
wholly for cash of any of the Preferred Shares at less than the current per
share market price, issuance wholly for cash of Preferred Shares or securities
that by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of
rights, options or warrants referred to in subsection (b) of this Section 12,
hereafter effected by the Company to holders of its Preferred Shares shall not
be taxable to such stockholders.
(n) If at any time prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i) the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (ii) the number of Rights outstanding immediately after
such event shall be adjusted, either through cancellation of outstanding Rights
or through distribution of additional Rights (but without duplication of the
Company's obligations under Section 3(c)), so that the certificate evidencing
each Common Share outstanding immediately after such event shall also evidence
the associated Right to purchase the same number of one one-thousandths of a
Preferred Share as to which a Right would have entitled the holder thereof to
purchase immediately prior to such event. The adjustment provided for in this
Section 12(n) shall be made successively whenever such a dividend is declared
or paid or such a subdivision or combination is effected. If an event occurs
that would require an adjustment under Section 12(a)(ii) and this Section
12(n), the adjustments provided for in this Section 12(n) shall be in addition
and prior to any adjustment required pursuant to Section 12(a)(ii).
Section 13. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 12 or 14 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
Common Shares of the Company and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of a
Right Certificate in accordance with Section 28 hereof.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) If, directly or indirectly, at any time after a Person has
become an Acquiring Person (i) the Company shall consolidate with, or merge
with and into, any other Person, (ii) any Person shall merge with and into the
Company and the Company shall be the continuing or surviving corporation of
such merger and, in connection with any such merger, all or part of the Common
Shares of the Company shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (iii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or a series of two or
more transactions, assets of the Company or its Subsidiaries that constitute
more than 50% of the assets or that produce more than 50% of the earning power
or cash flow of the Company and its Subsidiaries (taken as a whole) to any
Person other than the Company or one or more of its Wholly-Owned Subsidiaries,
then, and
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in each such case, the Company agrees that, as a condition to engaging in any
such transaction, it will make or cause to be made proper provision so that (i)
each holder of a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of Common
Shares of the Principal Party (as such term is hereinafter defined) as shall be
equal to the result obtained by (X) multiplying the then current Purchase Price
by the number of one one-thousandths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment previously made
pursuant to Section 12(a)(ii)) and dividing that product by (Y) 50% of the
current per share market price of the Common Shares of the Principal Party
(determined pursuant to Section 12(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company", as used herein, shall
thereafter be deemed to refer to such Principal Party; and (iv) such Principal
Party shall take such steps (including without limitation the reservation of a
sufficient number of shares of its Common Shares in accordance with Section 10)
in connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares of the Principal Party thereafter
deliverable upon the exercise of the Rights. The Company shall not enter into
any transaction of the kind referred to in this Section 14 if at the time of
such transaction there are outstanding any rights, warrants, instruments or
securities or any agreement or arrangements that, as a result of the
consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. The Company
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent an agreement supplemental to this Agreement
complying with the provisions of this Section 14. The provisions of this
Section 14 shall similarly apply to successive mergers or consolidations or
sales or other transfers. For the purposes of this Section 14, 50% of the
assets of the Company and its Subsidiaries shall be determined by reference to
the book value of such assets as set forth in the most recent consolidated
balance sheet of the Company and its Subsidiaries (which need not be audited)
and 50% of the earning power or cash flow of the Company and its Subsidiaries
shall be determined by reference to the mathematical average of the operating
income or cash flow, respectively, resulting from the continuing operations of
the Company and its Subsidiaries for the two most recent full fiscal years as
set forth in the consolidated and consolidating financial statements of the
Company and its Subsidiaries for such years; provided, however, that, if the
Company has, during such period, engaged in one or more transactions to which
purchase accounting is applicable, such determination shall be made by
reference to the pro forma operating income of the Company and its Subsidiaries
giving effect to such transactions as if they had occurred at the commencement
of such two-year period.
(b) The term "Principal Party" shall mean: (i) in the case of any
transaction described in clause (i) or (ii) of the first sentence of Section
14(a), the Person that is the issuer of any securities into which Common Shares
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
(iii) of the first sentence of Section 14(a), the Person that is the party
receiving the greatest portion of the assets transferred pursuant to such
transaction or transactions; provided, however, that in any such case (1) if
the Common Shares of such Person are not at such time and have not been
continuously over the preceding twelve months registered under Section 12 of
the Exchange Act and such Person is a direct or indirect subsidiary
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of another Person the Common Shares of which are and have been so registered,
the term "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 Shares of two or more of which are and have been so registered, the
term "Principal Party" shall refer to whichever of such Persons is the issuer
of the Common Shares 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 Common Shares that have not been issued or reserved for
issuance to permit the exercise in full of the rights in accordance with this
Section 14 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 subsections (a) and (b) of this Section 14
and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets referenced in the first
sentence of Section 14(a), the Principal Party shall: (i) prepare and file a
registration statement under the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
and shall use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date; and (ii) shall deliver to
holders of the Rights historical financial statements for the Principal Party
and each of its Affiliates that comply in all respects with the requirements
for registration of a class of securities under the Exchange Act. The
provisions of this Section 14 shall similarly apply to successive mergers,
consolidations, sales or other transfers of assets. If an event subject to
this Section 14 shall occur at any time after the occurrence of an event
subject to Section 12(a)(ii), the Rights that have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 14(a).
Section 15. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue or distribute Right Certificates that evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid
to such Person an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purpose of this Section 15(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.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates that evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares. If, on the Distribution Date or thereafter, as a result
of any adjustment effected hereunder in the number of one one-thousandths of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional
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Preferred Share that is not an integral multiple of one one-thousandth of a
Preferred Share, the Company shall, in lieu thereof, pay to such Person at the
time such Right is exercised as herein provided an amount in cash equal to the
same fraction (which is not an integral multiple of one one-thousandth of a
Preferred Share) of the current market value of one Preferred Share. For
purposes of this Section 15(b), the current market value of a Preferred Share
shall be the Closing Price of a Preferred Share for the Trading Day immediately
prior to the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute certificates that evidence fractional Common Shares.
If after any such adjustment or mandatory redemption and exchange, a Person
would otherwise be entitled to receive a fractional Common Share of the Company
upon exercise of any Right or upon mandatory redemption and exchange as
contemplated by Section 25, the Company shall, in lieu thereof, pay to such
Person at the time such Right is exercised as herein provided or upon such
mandatory redemption and exchange an amount in cash equal to the same fraction
of the current market value of one Common Share. For purposes of this Section
15(c), the current market value of a Common Share shall be the Closing Price of
a Common Share for the Trading Day immediately prior to the date of such
exercise or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. Rights of Action. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any
registered holder of any Rights may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding,
judicial or otherwise, against the Company to enforce, or otherwise to act in
respect of, such holder's right to exercise such Rights in the manner provided
in the Right Certificate evidencing such Rights 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 will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person subject to
this Agreement.
(b) Except as otherwise provided in the final paragraph of Section
7 hereof, no right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to such holders may
be exercised from time to time, and as often as may be deemed expedient, by
such holders.
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Section 17. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares
of the Company;
(b) after the Distribution Date, the Right Certificates
will be transferable only on the Rights Register if surrendered at
the Corporate Trust Office of the Rights Agent duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company or any
other securities of the Company that may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 26) or to receive dividends or subscription rights until
the Right or Rights evidenced by such Right Certificate shall have been
exercised (or mandatorily redeemed and exchanged) in accordance with the
provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. In no
case will the Rights Agent be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the possibility
of such loss or damage.
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The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Shares, Common Shares of the Company
or other securities of the Company, Company Order, 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 executed and, where necessary, verified or acknowledged,
by the proper person or persons, or otherwise upon the advice of its counsel as
set forth in Section 20 hereof.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of 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 authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company or
any other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its authentication thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not have any responsibility with
respect to the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or with respect to the
validity or execution of any Right Certificate (except its authentication
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 12(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 12, 14, 24 and 25, or the
ascertainment of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the
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authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be duly authorized,
validly 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 any
one of 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 to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company.
(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 of the Company resulting from any such act,
default, neglect or misconduct provided reasonable care was exercised in the
selection and continued employment thereof.
Section 21. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust 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, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22. If
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement any of the Right Certificates shall have been authenticated but
not delivered, any such successor Rights Agent may adopt the authentication of
the predecessor Rights Agent and deliver such Right Certificates so
authenticated, and, if at that time any of the Right Certificates shall not
have been authenticated, any successor Rights Agent may authenticate such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
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If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent for the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent for the
Common Shares of the Company and the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be 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 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 registered holder of a Right Certificate (or, prior to the
Distribution Date, of Common Shares), then any registered holder of a Right
Certificate (or, prior to the Distribution Date, of Common Shares) 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 either (A) a corporation organized and doing business under the
laws of the United States or of any state of the United States, that is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (B) an Affiliate of such a corporation. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent for the
Common Shares of the Company and the Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 22, 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 23. Issuance of New Right 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 its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares or other securities purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
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Section 24. Redemption. (a) The Rights may be redeemed by action of
the Board of Directors of the Company pursuant to paragraph (b) of this Section
24, or may be redeemed and exchanged by action of the Board of Directors of the
Company pursuant to Section 25 herein, but shall not be redeemed in any other
manner.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the Shares Acquisition Date redeem all but not less than all
the then outstanding Rights at a redemption price of one cent ($.01) per Right
then outstanding, appropriately adjusted to reflect any adjustment in the
number of Rights outstanding pursuant to Section 12(i) herein (such redemption
price being hereinafter referred to as the "Redemption Price"); provided,
however, that in the event that a majority of the Board of Directors of the
Company is not comprised of Continuing Directors, then (1) the Rights may not
be redeemed for a period of two years following the date upon which the
majority of the Board of Directors ceased to be Continuing Directors if such
redemption is reasonably likely to have the purpose or effect of facilitating a
Transaction with a Transaction Person and (2) the Rights may not be redeemed
following such two-year period if (x) such redemption is reasonably likely to
have the purpose or effect of facilitating a Transaction with a Transaction
Person and (y) during such two-year period, the Company enters into any
agreement, arrangement or understanding with any Transaction Person which is
reasonably likely to have the purpose or effect of facilitating a Transaction
with any Transaction Person. Any such redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of the Company
of a resolution authorizing and directing the redemption of the Rights pursuant
to paragraph (b) of this Section 24 (or, alternatively, if the Board of
Directors qualified such action as to time, basis or conditions, then at such
time, on such basis and with such conditions as the Board of Directors may have
established pursuant to such paragraph (b)); thereafter, the only right of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any redemption resolution pursuant to paragraph
(b) of this Section 24; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after the adoption of any redemption resolution pursuant to
paragraph (b) of this Section 24, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agents for the Common Shares. Any notice that is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or Associates
may acquire (other than, in the case of such Affiliates and Associates, in
their capacity as holders of Common Shares of the Company), redeem or purchase
for value any Rights at any time in any manner other than as specifically set
forth in this Section 24 or in Section 25 herein, and other than in connection
with the purchase of Common Shares prior to the Distribution Date.
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Section 25. Mandatory Redemption and Exchange. (a) The Board of
Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, issue Common Shares of the Company in mandatory
redemption of, and in exchange for, all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 12(a)(ii) hereof) at an exchange
ratio of one Common Share for each Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof. Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such redemption and exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any such Subsidiary, or any entity holding Voting
Shares 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 Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the mandatory redemption and exchange of any Rights pursuant
to subsection (a) of this Section 25 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive such number of
Common Shares as is provided in paragraph (a) of this Section 25. The Company
shall promptly give public notice of any such redemption and exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such redemption and exchange. The Company
promptly shall mail a notice of any such redemption and exchange to all the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of mandatory redemption and exchange shall state the method by
which the redemption and exchange of the Common Shares for Rights will be
effected and, in the event of any partial redemption and exchange, the number
of Rights that will be redeemed and exchanged. Any partial redemption and
exchange shall be effected pro rata based on the number of Rights (other than
Rights that have become null and void pursuant to the provisions of Section
12(a)(ii) hereof) held by each holder of Rights.
(c) In any mandatory redemption and exchange pursuant to this
Section 25, the Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section 12(b) hereof)
for Common Shares, at the initial rate of one one-thousandth of a Preferred
Share (or equivalent preferred share) for each Common Share, as appropriately
adjusted.
Section 26. Notice of Certain Events. If the Company shall, on or
after the Distribution Date, propose (a) to pay any dividend or other
distribution payable in stock of any class of the Company or any Subsidiary of
the Company to the holders of its Preferred Shares, (b) to distribute to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (c) to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash dividend),
(d) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly-Owned Subsidiary or Wholly-Owned
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Subsidiaries), (f) to effect the liquidation, dissolution or winding up of the
Company or (g) if the Rights have theretofore become exercisable with respect
to Common Shares pursuant to Section 12(a)(ii) herein, to declare or pay any
dividend or other distribution on the Common Shares payable in Common Shares or
in stock of any other class of the Company or any Subsidiary of the Company or
to effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 28 hereof, notice of such proposed
action, which shall specify the date of authorization by the Board of Directors
of the Company of, and record date for, such stock dividend or such
distribution of rights or warrants or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up,
subdivision or combination is to take place and the date of participation
therein by the holders of the Common Shares of the Company or the Preferred
Shares, or both, if any such date is to be fixed. Such notice shall be so
given in the case of any action covered by clause (a), (b) or (g) above at
least 20 days prior to the record date for determining holders of the Preferred
Shares or of the Common Shares of the Company, as the case may be, for purposes
of such action, and in the case of any such other action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares or Common Shares
of the Company, as the case may be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 28 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 12(a)(ii) hereof.
Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, no later than the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Preferred Shares
issuable upon exercise of the Rights, and the Company will, thereafter, use its
best efforts to maintain such registration statement (or another) continuously
in effect so long as any Rights remain outstanding and exercisable with respect
to Preferred Shares. Should the Rights become exercisable with respect to
securities of the Company or one of its Subsidiaries other than Preferred
Shares, the Company agrees that it will, to the extent legally required,
promptly thereafter prepare and file, or cause to be prepared and filed, and
will use its best efforts to cause to be declared effective, a registration
statement under such Act registering the offering, sale and delivery of such
other securities and the Company will, thereafter, use its best efforts to
maintain such registration statement (or another) continuously in effect so
long as any outstanding Rights are exercisable with respect to such securities.
The Company further agrees to use its best efforts, from and after the
Distribution Date, to qualify or register for sale the Preferred Shares or
other securities of the Company or one of its Subsidiaries issuable upon
exercise of the Rights under the securities or "blue sky" laws (to the extent
legally required thereunder) of all jurisdictions in which registered holders
of Right Certificates reside determined by reference to the Rights Register.
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Section 28. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
▇▇▇▇▇▇ Drilling Company
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Norwest Bank Minnesota, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Account Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate 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 Rights
Register or, prior to the Distribution Date, on the stock transfer records for
the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of Right Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein that may be defective
or inconsistent with any other provisions herein, to make any other provisions
in regard to matters or questions arising hereunder, or to add, delete, modify
or otherwise amend any provision, that the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date
and, provided that at the time of such amendment or supplement the Distribution
Date has not occurred, the period during which the Rights may be redeemed;
provided, however, that, from and after such time as any Person becomes an
Acquiring Person, any such amendment or supplement shall not materially and
adversely affect the interests of the holders of the Rights. Without limiting
the foregoing, the Board of Directors of the Company may by resolution adopted
at any time prior to such time as any Person becomes an Acquiring Person amend
this Agreement to lower the threshold set forth in the definitions of Acquiring
Person and Distribution Date herein from 15% to a percentage not less than the
greater of (i) any percentage greater than the largest percentage of the
outstanding Voting Shares then known to the Company to be beneficially owned by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any entity
holding Voting Shares for or pursuant to the terms of any such plan, or the
Grandfathered Stockholder), and (ii) 10%. Upon the delivery of a certificate
from any officer of the Company specified in Section 20(b) hereof stating that
a proposed supplement or amendment complies with the terms of this Section, the
Rights Agent shall execute such supplement or amendment. Notwithstanding any
other provision hereof, the Rights Agent's consent must be obtained regarding
any amendment or supplement pursuant to this Section 29 which alters the Rights
Agent's rights or duties.
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Section 30. 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 31. 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 Right Certificates (and, prior to the
Distribution Date, the Common Shares) 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 Right Certificates (and, prior to the Distribution Date, the Common
Shares).
Section 32. 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.
Section 33. Governing Law. This Agreement and each Right Certificate
(and, prior to the Distribution Date, the Rights represented by certificates
for Common Shares) 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 to
be made and performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 35. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
▇▇▇▇▇▇ DRILLING COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sr. Vice President-Finance
and Chief Financial Officer
NORWEST BANK MINNESOTA, N.A.,
As Rights Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
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TABLE OF CONTENTS
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3. Issuance of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . 11
Section 9. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10. Reservation and Availability of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 11. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 12. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . . . 13
Section 13. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . . . 18
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . . . 18
Section 15. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 16. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 17. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 18. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 21. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 24
Section 22. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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Section 23. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 24. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 25. Mandatory Redemption and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 26. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 27. Securities Laws Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 28. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 29. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 30. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 31. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 33. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 34. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 35. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Exhibits
Exhibit A - Certificate of Designation of Junior Participating Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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