EXHIBIT 4.4
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HALLIBURTON COMPANY
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
RESTATED*
RIGHTS AGREEMENT
Dated as of December 1, 1996
* This Rights Agreement has been restated without amendment to reflect a change
of corporate name.
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TABLE OF CONTENTS
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Exhibit................................................................................. ii
Section 1. Certain Definitions...................................................... 1
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Section 2. Appointment of Rights Agent.............................................. 7
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Section 3. Issue of Right Certificates.............................................. 7
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Section 4. Form of Right Certificates............................................... 9
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Section 5. Execution, Authentication and Delivery................................... 10
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Section 6. Registration, Registration of Transfer and Exchange...................... 11
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Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates................. 12
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Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights............ 12
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Section 9. Cancellation and Destruction of Right Certificates....................... 13
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Section 10. Reservation and Availability of Shares................................... 13
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Section 11. Record Date.............................................................. 14
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Section 12. Adjustment of Purchase Price, Number of Shares or Number of Rights....... 15
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Section 13. Certificate of Adjusted Purchase Price or Number of Shares............... 20
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Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..... 21
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Section 15. Fractional Rights and Fractional Shares.................................. 23
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Section 16. Rights of Action......................................................... 24
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Section 17. Agreement of Right Holders............................................... 24
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Section 18. Right Certificate Holder Not Deemed a Stockholder........................ 25
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Section 19. Concerning the Rights Agent.............................................. 25
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Section 20. Duties of Rights Agent................................................... 25
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Section 21. Merger or Consolidation or Change of Name of Rights Agent................ 27
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Section 22. Change of Rights Agent................................................... 28
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Section 23. Issuance of New Right Certificates....................................... 28
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Section 24. Redemption............................................................... 28
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Section 25. Mandatory Redemption and Exchange........................................ 29
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Section 26. Notice of Certain Events................................................. 30
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Section 27. Securities Laws Registrations............................................ 31
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Section 28. Notices.................................................................. 32
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Section 29. Supplements and Amendments............................................... 32
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Section 30. Successors............................................................... 33
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Section 31. Benefits of this Agreement............................................... 33
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Section 32. Severability............................................................. 33
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Section 33. Governing Law............................................................ 33
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Section 34. Counterparts............................................................. 33
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Section 35. Descriptive Headings..................................................... 33
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Section 36. Effective Date........................................................... 33
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Exhibit A -- Form of Right Certificate
Exhibit B -- Certificate of Designation, Rights and Preferences of Series A
Junior Participating Preferred Stock
-ii-
This Restated/1/ Rights Agreement, dated as of December 1, 1995, is between
Halliburton Company, a Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., a New Jersey limited liability company, as Rights
Agent.
RECITALS:
The Company (formerly Halliburton Hold Co., a Delaware corporation) is a
holding company organized to succeed by reorganization ("Reorganization") to
Halliburton Company (now Halliburton Energy Services, Inc, a Delaware
corporation and a wholly owned subsidiary of the Company and herein called the
"Predecessor Company").
The name of the Company was changed in connection with the Reorganization
from Halliburton Hold Co. to Halliburton Company.
The Reorganization included the merger (the "Merger") of the Predecessor
Company with one of its indirect, wholly owned subsidiaries under Section
251(g) of the Delaware General Corporation Law (the "DGCL").
The Predecessor Company was a party to a Second Amended and Restated Rights
Agreement dated December 15, 1995 with the Rights Agent (the "Predecessor Rights
Agreement") pursuant to which rights to purchase preferred stock were
outstanding on the basis of one right for each share of outstanding common stock
of the Predecessor Company.
Section 251(g) of the DGCL requires that the holding company resulting from
the Reorganization contemplated thereby shall have the same authorized and
outstanding capitalization as its predecessor.
The certificate of incorporation of the Company is such that, upon
completion of the Reorganization, the authorized, issued and outstanding capital
stock of the Company, including its preferred stock and common stock,
immediately following the Merger would be identical to that of the Predecessor
Company immediately prior to the Merger.
Accordingly, to conform the Company's capitalization to that of the
Predecessor Company as it related to the Predecessor Rights Agreement, the Board
of Directors of the Company has authorized and declared a dividend distribution
of one right (a "Right") for each share of Common Stock, par value $2.50, of the
Company ("Common Stock") outstanding at the Close of Business on the Effective
Date (as such terms are hereinafter defined) and has authorized the issuance of
one Right with respect to each share of Common Stock that shall hereafter be
issued out of authorized but unissued Common Stock or out of treasury between
the Effective Date and the earlier of the Distribution Date or the Expiration
Date (as such terms are hereinafter defined) or the date, if any, on which such
Rights are redeemed, each Right representing the right to purchase one
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/1/ This Rights Agreement has been restated without amendment to reflect
the change of corporate name of the Company from Halliburton Hold Co. to
Halliburton Company.
one-hundredth of a share of Series A Junior Participating Preferred Stock of the
Company, having the rights and preferences set forth in the form of Certificate
of Designation, Rights and Preferences of Series A Junior Participating
Preferred Stock attached hereto as Exhibit B, upon the terms and subject to the
conditions hereinafter set forth.
The Board of Directors of the Company has 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
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following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, 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 the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company or any entity
holding Voting Shares for or pursuant to any such plan. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Voting Shares by the Company which, 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 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, any Person who has
reported or is required to report such ownership (but who is the Beneficial
Owner of less than 20% of the outstanding Common Shares of the Company) on
Schedule 13G under the Exchange Act (or any comparable or successor
reporting form) or on Schedule 13D under the Exchange Act (or any
comparable or successor reporting form) which Schedule 13D does not state
any intention or reserve the right to control or influence the management
or policies of the Company or engage in any of the actions specified in
Item 4 of such Schedule (other than the disposition of the Common Shares)
and, within ten Business Days of being requested by the Company to advise
it regarding the same, certifies to the Company that such Person acquired
Common Shares in excess of 14.9% of the outstanding Common Shares of the
Company inadvertently or without knowledge of the terms of the Rights and
who, together with all such Person's Affiliates and Associates, thereafter
does not acquire additional
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Common Shares while being the Beneficial Owner of 15% or more of the
outstanding Common Shares of the Company shall not be deemed to be an
"Acquiring Person"; provided, however, that, if the Person requested so to
certify fails to do so within ten Business Days, then such Person shall
become an Acquiring Person immediately after such ten day period.
"Agreement" shall mean this Restated 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 which (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; and 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 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).
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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 which 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 Texas are authorized or
obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M., Dallas
time, on such date; provided, however, that, if such date is not a Business
Day it shall mean 5:00 P.M., Dallas 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 the 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 which have no preference over any
other class of stock with respect to dividends or assets, which 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 $2.50, of the Company. "Common Shares"
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 which
ultimately control such first-mentioned Person and, if used with reference
to any other
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Person, mean the equity interest in such Person (or, if the net worth
determined in accordance with generally accepted accounting principles of
another Person which 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.
"Common Stock" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"Company" shall mean Halliburton 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.
"Corporate Trust Office" means the principal office of the Rights
Agent at which it administers its corporate trust business, which, in the
case of ChaseMellon Shareholders Services, L.L.C., shall, until hereafter
changed, be its office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
"DGCL" shall have the meaning ascribed to such term in the Recitals to
this Agreement.
"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 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 intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or 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 the
Beneficial Owner of 15% or more of the then outstanding Voting Shares of
the Company; 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
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to occur of such tenth Business Day (or such later date as described in
clause (ii) above) and the date of such latter determination.
"Effective Date" shall mean December 11, 1996.
"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 December
15, 2005.
"Merger" shall have the meaning ascribed to such term in the Recitals
to this Agreement.
"Reorganization" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"Person" shall mean any individual, firm, corporation, partnership,
limited partnership, trust or other entity, and shall include any successor
(by merger or otherwise ) of such entity.
"Predecessor Company" shall have the meaning ascribed to such term in
the Recitals to this Agreement.
"Preferred Shares" shall mean shares of the Company's currently
authorized Series A Junior Participating Preferred Stock, without par
value.
"Principal Party" shall have the meaning ascribed to such term in
Section 14(b).
"Purchase Price" shall mean the price at which the holder of a Right
may, subject to the terms and conditions of this Agreement, purchase one
one-hundredth (1/100) of a Preferred Share (which, initially, is as 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 herein 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-
hundredth (1/100) of a Preferred Share upon the terms and subject to the
conditions herein set forth.
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"Right Certificate" shall mean a certificate, in substantially the
form of Exhibit A attached to this Rights Agreement, evidencing the Rights
registered in the name of the holder thereof.
"Rights Agent" shall mean ChaseMellon Shareholder Services, L.L.C., a
New Jersey limited liability company, 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.
"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.
"Trading Day" shall mean a day on which the principal national
securities exchange 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, a Business Day.
"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, subject to its provisions of the
definition in this Section 1(a) of "Beneficial Owner", 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
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power in the election of directors or similar officials (other than
directors' qualifying shares or similar interest) are owned, directly or
indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
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the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares of the Company) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.
Section 3. Issue of Right Certificates. From and after the date of
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this Agreement 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) With respect to Common Shares of the Company outstanding on the date
of this Agreement, the certificates evidencing such Common Shares shall
thereafter also evidence the outstanding Rights (as such Rights have been or
shall be amended and supplemented) previously 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 or transfer of such Common Shares.
Moreover, Common Shares of the Company issued pursuant to the Merger will
continue to be evidenced, as permitted by the provisions of Section 251(g) of
the DGCL, by the certificates that formerly evidenced the common stock of the
Predecessor 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 the date of this Agreement or issued pursuant to the
Merger 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 the date of this Agreement
and prior to the Distribution 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-hundredths of a Preferred Share
at the same Purchase Price as the Rights then outstanding.
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(d) Certificates for Common Shares of the Company issued after the date of
this Rights Agreement (other than pursuant to the Merger) 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 such Common Shares
outstanding on the date of this Agreement (or issued pursuant to the Merger) 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 Restated Rights Agreement between
Halliburton Company and a Rights Agent dated as of December 1, 1996 (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 Halliburton 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. Halliburton 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
(as defined in the Rights Agreement) shall, under certain circumstances,
become null and void.
With respect to certificates evidencing Common Shares of the Company
outstanding on the date of this Agreement, issued pursuant to the Merger or
issued with the foregoing legend, until the Distribution Date, outstanding
Rights associated with the Common Shares of the Company 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 have been or shall be
amended and supplemented) associated with the Common Shares represented thereby.
(e) If the Company purchases or acquires any of its Common Shares after
the date hereof 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
which are no longer outstanding.
Section 4. Form of Right Certificates. The form of Right Certificates
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(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 A 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
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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 the
Effective Date 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-hundredth (1/100) of a
Preferred Share as to which a Right would be exercisable if the Distribution
Date were the date of this Agreement; 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 which 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.
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
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Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon 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 officers 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
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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
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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.
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 which 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.
-11-
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.
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-hundredth (1/100) 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
-12-
Date, (ii) the time of redemption on the Redemption Date 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-hundredth (1/100) of a Preferred
Share pursuant to the exercise of a Right shall initially be one hundred fifty
dollars ($150.00), 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-hundredths
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-hundredths 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), 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, (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.
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 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
-13-
Certificates to the Company, or shall, pursuant to a Company Order, destroy such
canceled Right Certificates and in such case shall deliver a certificate of
destruction thereof 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.
The Company further covenants and agrees that it will, from and after the
Distribution Date, cause to be reserved and kept available out of its authorized
and unissued Common Shares or any Common Shares held in its treasury, the number
of Common Shares of the Company that will be sufficient to permit the exercise
in full of all outstanding Rights if adjusted pursuant to Section 12(a)(ii).
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 which 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
reasonable 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 dated, the next
succeeding Business Day on which such transfer books of the Company are open.
-14-
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-hundredths 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 which, 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 which 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 other holder of a Right shall, from and after the Close
of Business on the tenth Business Day after the Shares Acquisition Date, have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this 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-hundredths 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
-15-
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 which would eliminate or diminish the benefits intended to be
afforded by the Rights.
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 of the Company 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 charter to authorize additional Common Shares for issuance upon
exercise of the Rights. If, notwithstanding the foregoing, the shareholders
shall not approve an amendment to the Company's charter 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 thereafter have
the right to receive, upon exercise thereof in accordance with the terms of this
Agreement, such number of one one-hundredths of Preferred Shares as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per share
market price of one one-hundredth 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
-16-
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 which 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 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 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 which 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 which 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
-17-
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 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 hundred.
(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 which 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-thousandth of a Common
Share or other share or one-millionth of a Preferred Share, as the case may be,
and references herein to the "number of one one-hundredths of a Preferred Share"
(or similar phrases) shall be construed to include fractions of one one-
hundredth 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 which
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-hundredths 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
-18-
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price per one one-
hundredth of a Preferred Share, that number of one one-hundredths of a Preferred
Share obtained by (i) multiplying (x) the number of one-hundredths of a share
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(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-hundredths 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-hundredths
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 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-hundredths 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-hundredths 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-hundredths 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-hundredth of the amount of consideration per
Preferred Share determined by the Board of Directors of the Company to be
capital, or below one one-hundredth of the par value, if any,
-19-
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 which is, in the opinion of
its counsel, necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-hundredths 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.
(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 market
price, issuance wholly for cash of Preferred Shares or securities which 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
shareholders.
(n) If at any time prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Shares of the Company payable in such
Common Shares or (ii) effect a subdivision or combination of such Common Shares
(by reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one one-hundredths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of Common Shares
of the Company outstanding immediately before such event and the denominator of
which is the number of such Common Shares outstanding immediately after such
event, and (B) each such Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights which each such
Common Share outstanding immediately prior to such event had issued with respect
to it. 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 which 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).
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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 which constitute more
than 50% of the assets or which 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 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-hundredths 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 such other
Person (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) the 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 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 which, 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
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
-21-
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
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 is not at such time and has 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 of another Person the Common Shares of
which is and has 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 which 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 to this 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 which 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, sale 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
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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 which 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 which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary 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
represented by such depository shares. If, on the Distribution Date or
thereafter, as a result of any adjustment effected hereunder in the number of
one one-hundredths of a Preferred Share as to which a Right has become
exercisable, a Person would otherwise be entitled to receive a fractional
Preferred Share that is not an integral multiple of one one-hundredth 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-hundredth 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 of the Company upon
exercise of the Rights or to distribute certificates which 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 Certificate 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 of
the Company shall be the Closing Price of such a Common Share for the Trading
Day immediately prior to the date of such exercise or the date of such mandatory
redemption and exchange.
-23-
(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) 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.
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 are
transferable only on the registry books of the Rights Agent 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
-24-
(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 to be the holder of Preferred Shares, Common Shares of the Company or
any other securities of the Company which 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.
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
-25-
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
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,
-26-
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 shareholder, 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 that 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 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.
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.
-27-
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 a
corporation or other legal entity organized, doing business and in good standing
under the laws of the United States or of any state of the United States, which
is authorized to exercise corporate securities transfer powers in the State of
Texas and has at the time of its appointment as Rights Agent a combined capital
and surplus of at least $25 million. 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.
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.
-28-
(b) The Board of Directors of the Company may, at its option, at any time
prior to the Close of Business on the Shares Acquisition Date redeem all but not
less than all the then outstanding Rights at a redemption price of one cent
($0.01) 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").
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 of the Company. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption 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 of the Company prior to the Distribution Date.
Section 25. Mandatory Redemption and Exchange. (a) The Board of
---------------------------------
Directors of the Company may, at its option, at any time after the Close of
Business on the Shares Acquisition Date, 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 two Common Shares for which each
Right is then exercisable pursuant to the provisions of Section 12(a)(ii)
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 any such Subsidiary, or any entity holding Voting Shares
for or pursuant to the terms of any such plan)
-29-
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Voting Shares then outstanding.
(b) As of the Close of Business on such date as the Board of Directors of
the Company shall order 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 which 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 which
will be redeemed and exchanged. Any partial redemption and exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become null and void pursuant to the provisions of Section 12(a)(ii) hereof)
held by each holder of Rights.
(c) If there shall not be sufficient Common Shares of the Company issued
but not outstanding, or authorized but unissued, to permit a mandatory
redemption and exchange of Rights in accordance with the provisions of this
Section 25, 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 charter to authorize additional Common
Shares for issuance upon such mandatory redemption and exchange. If,
notwithstanding the foregoing, the shareholders shall not approve an amendment
to the Company's charter authorizing such additional Common Shares, 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 of the
Company, at the initial rate of one one-hundredth 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 or cash flow 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
-30-
or Wholly-Owned 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 of the Company 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 of such action by the Board of Directors of the Company and (i)
record date for such dividend or other distribution or (ii) 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 as 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 ▇▇▇ 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.
-31-
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 to made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Halliburton 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:
ChaseMellon Shareholder Services, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Administration
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 of the Company 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 and the Rights
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions
in regard to matters or questions arising hereunder, which the Company and the
Rights Agent 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, after the
Distribution Date, any such amendment or supplement shall not materially and
adversely affect the interests of the holders of Right Certificates. 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 in Section 1 from 15% to a percentage not
less than the greater of (i) any percentage greater than the largest percentage
of the outstanding Voting Shares
-32-
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 any Subsidiary of the Company, or any entity holding Voting Shares for or
pursuant to the terms of any such plan), and (ii) 10%.
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 Rights any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights.
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
-------------
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.
Section 36. Effective Date. This Restated Rights Agreement shall become
--------------
effective at the opening of business on December 11, 1996.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
HALLIBURTON COMPANY
Attest:
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ -----------------------------------
Title: Assistant Secretary Vice President
-33-
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
As Rights Agent
Attest:
By /s/ R. ▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------- -----------------------------------
Title: Authorized Officer Authorized Officer
-34-
Exhibit A
---------
[Form of Right Certificate]
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER DECEMBER 15, 2005 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS (AS DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
HALLIBURTON COMPANY
This certifies that ___________________________________________, or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Restated Rights Agreement dated as of December
1, 1996 (the "Rights Agreement") between Halliburton Company, a Delaware
corporation ("the Company"), and ChaseMellon Shareholder Services, L.L.P., a New
Jersey limited liability company (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M. (Dallas time) on December 15, 2005 at
the Corporate Trust Office of the Rights Agent, one one-hundredth (1/100) of a
fully paid nonassessable share of Series A Junior Participating Preferred Stock,
without par value (the "Preferred Shares"), of the Company, at a purchase price
of one hundred and fifty dollars ($150.00) per one one-hundredth (1/100) of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of
Preferred Shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of December 11, 1996, based on the Preferred Shares as constituted at
such date.
As provided in the Rights Agreement, the Purchase Price and the number of
one one-hundredths of a Preferred Share which may be purchased upon the exercise
of Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the occurrence of certain events.
A-1
The Right Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and to which Rights Agreement reference
is hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the Corporate Trust
Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender hereof at the Corporate Trust Office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of one
cent ($0.01) per Right or (ii) may be mandatorily redeemed and exchanged by the
Company in whole or in part for Preferred Shares or shares of the Company's
common stock, par value $2.50 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, not shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company, 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 the Rights Agreement) or to receive dividends or subscription rights, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised or such Right or Rights shall have been mandatorily redeemed and
exchanged by the Company as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
A-2
WITNESS the facsimile signatures of the proper officers of the Company and
its corporate seal.
Dated as of ____________________, 19__.
ATTEST: HALLIBURTON COMPANY
____________________ By: __________________________________
________
Secretary
Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
ChaseMellon Shareholder Services, L.L.C. as Rights Agent
By: ______________________________
Authorized Signature
A-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED __________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney, to
transfer the within Right Certificate on the books of the within-named
corporation, with full power of substitution.
Dated: ____________________, 19___.
___________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States of America.
_______________________________________________________________________________
(To be executed if a statement is correct)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_____________________________________________
Signature
[Form of Reverse Side of Right Certificate -- continued]
A-4
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate)
To: HALLIBURTON COMPANY
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or for such other securities) be
issued in the name of:
Please insert social security
or other identifying number:___________________________________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:___________________________________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated:_______________, 19___ ________________________________________
Signature
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
A-5
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
_______________________________________________________________________________
(To be executed if statement is correct)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
________________________________________
_______________________________________________________________________________
NOTICE
------
The signature in the foregoing Forms of Assignment and Election must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
If the certification set forth above in the Form of Assignment or the Form
of Election to Purchase, as the case may be, is not completed, the Company and
the Rights Agent will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement) and such Assignment or Election will not be
honored.
A-6
Exhibit B
CERTIFICATE OF DESIGNATION,
RIGHTS AND PREFERENCES
OF
SERIES A JUNIOR PARTICIPATING PREFERRED
STOCK, WITHOUT PAR VALUE
of
HALLIBURTON HOLD CO.
Halliburton Hold Co., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
That at a meeting of the Board of Directors of Halliburton Hold Co. ("Hold
Co.") the following resolution, creating a series of two (2) million shares of
Preferred Stock, designated as Series A Junior Participating Preferred Stock was
duly adopted pursuant to the authority granted to and vested in the Board of
Directors of this corporation in accordance with the provisions of its
Certificate of Incorporation:
RESOLVED, that, pursuant to the authority granted to and vested in the
Board of Directors of Hold Co. in accordance with the provisions of the
Certificate of Incorporation of Hold Co., a series of 2,000,000 shares of
Series A Junior Participating Preferred Stock, without par value, of Hold
Co. (the "Preferred Shares") be, and hereby is, created, and that the
designation and amount thereof and the relative rights, preferences and
limitations thereof (in addition to the provisions set forth in the
Certificate of Incorporation of Hold Co. which are applicable to the
Preferred Stock of all series) are as follows:
I. Designation and Amount. The shares of such series shall be designated
-----------------------
as the "Series A Junior Participating Preferred Stock" (the "Junior Preferred
Stock") and the number of shares constituting such series shall be two (2)
million. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
--------
shares of Junior Preferred Stock to a number less than that of the shares then
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the corporation.
II. Dividends and Distributions.
----------------------------
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Junior Preferred Stock with respect to dividends, the holders of
shares of Junior Preferred Stock, in preference to the holders of common
stock, $2.50 par value, of the corporation (the "Common Stock") and of any
other stock ranking junior (as to dividends) to Junior Preferred Stock,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, cumulative
quarterly dividends payable in cash or in kind, as hereinafter provided, on
the last day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Junior Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 (payable in cash) or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount (payable in
cash) of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of
a share of Junior Preferred Stock. If the corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise), into a greater or lesser
number of shares of Common Stock, then in each such case the amount to
which holders of shares of Junior Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that was outstanding immediately prior to such event.
(B) The corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, if no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Junior Preferred Stock shall nevertheless accrue and be
cumulative on the outstanding shares of Junior Preferred Stock as provided
in paragraph (C) of this Section.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Junior Preferred Stock,
unless the date of issue of such
2
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Junior
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share by share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Junior Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.
III. Voting Rights. The holders of shares of Junior Preferred Stock
--------------
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Junior Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the
corporation. If the corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Junior Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided in the Certificate of Incorporation
or by law, the holders of shares of Junior Preferred Stock and the holders
of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of shareholders of the corporation.
IV. Certain Restrictions.
---------------------
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock as provided in Section II are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Preferred Stock
outstanding shall have been paid in full, the corporation shall not:
3
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (as to dividends) to the
Junior Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (as to dividends) with
the Junior Preferred Stock, except dividends paid ratably on
the Junior Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled; or
(iii) purchase or otherwise acquire for consideration any shares of
Junior Preferred Stock, or any shares of stock ranking on a
parity (as to dividends) with the Junior Preferred Stock,
except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
(B) The corporation shall not permit any subsidiary of the
corporation to purchase or otherwise acquire for consideration any shares
of stock of the corporation unless the corporation could, under paragraph
(A) of this Section IV, purchase or otherwise acquire such shares at such
time and in such manner.
V. Reacquired Shares. Any shares of Junior Preferred Stock purchased or
------------------
otherwise acquired by the corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall
upon their cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
VI. Liquidation, Dissolution or Winding Up. Upon any liquidation,
---------------------------------------
dissolution or winding up of the corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (as to amounts payable upon
liquidation, dissolution or winding up) to the Junior Preferred Stock unless,
prior thereto, the holders of Junior Preferred Stock shall have received an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$100.00 per share, or (b) an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, plus, in either case, an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (2) to the holders of stock
ranking on a parity (as to amounts payable or upon liquidation, dissolution or
winding up) with the Junior Preferred Stock, except distributions made ratably
on the
4
Junior Preferred Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Junior Preferred Stock were entitled immediately prior to such event
under the provision in clause (1) (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
VII. Consolidation, Merger, etc. If the corporation shall enter
---------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination thereof, then in any
such case the shares of Junior Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash or any other property, or any combination thereof, into
which or for which each share of Common Stock is changed or exchanged. If the
corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Junior Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
VIII. No Redemption. The shares of Junior Preferred Stock shall not
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be redeemable. So long as any shares of Junior Preferred Stock remain
outstanding, the corporation shall not purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock unless the
corporation shall substantially concurrently also purchase or acquire for
consideration a proportionate number of shares of Junior Preferred Stock.
IX. Rank. Except as otherwise provided in its Certificate of
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Incorporation, the corporation may authorize or create any series of Preferred
Stock ranking prior to or on a parity with the Junior Preferred Stock as to
dividends or as to distribution of assets upon liquidation, dissolution or
winding up.
X. Amendment. The Certificate of Incorporation of the corporation
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shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Junior Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a majority
of the outstanding shares of Junior Preferred Stock, voting together as a single
class.
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The foregoing resolution was adopted by the Board of Directors of the
corporation, pursuant to the authority vested in it by the Certificate of
Incorporation of the corporation, at a meeting of the Board of Directors duly
held on the ___ day of ________, 1996.
IN WITNESS WHEREOF, this Certificate has been executed on behalf of the
Corporation by its ______________ this ___ day of ________, 1996.
HALLIBURTON HOLD CO.
By:_________________
_________________
_________________
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