RIGHTS AGREEMENT
DATED AS OF APRIL 22, 1997
▇▇▇▇▇▇ RESOURCES CORPORATION
and
SECURITIES TRANSFER CORPORATION
as Rights Agent
Rights Agreement
Table of Contents
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Issuance of Rights Certificates 4
Section 4. Form of Rights Certificates 5
Section 5. Countersignature and Registration 5
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates 6
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 6
Section 8. Cancellation and Destruction of Rights
Certificates 8
Section 9. Reservation and Availability of Capital Stock 8
Section 10. Common Stock Record Date 9
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights 9
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 15
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 15
Section 14. Fractional Rights and Fractional Shares 17
Section 15. Rights of Action 18
Section 16. Agreement of Rights Holders 18
Section 17. Rights Certificate Holder Not Deemed a Shareholder 19
Section 18. Concerning the Rights Agent 19
Section 19. Merger or Consolidation or Change of Name
of Rights Agent 19
Section 20. Duties of Rights Agent 20
Section 21. Change of Rights Agent 22
Section 22. Issuance of New Rights Certificates 22
Section 23. Redemption and Termination 23
Section 24. Exchange 23
Section 25. Notice of Certain Events 24
Section 26. Notices 25
Section 27. Supplements and Amendments 25
Section 28. Successors 26
Section 29. Determinations and Actions by the Board
of Directors, etc. 26
Section 30. Benefits of this Agreement 26
Section 31. Severability 27
Section 32. Governing Law 27
Section 33. Counterparts 27
Section 34. Descriptive Headings 27
EXHIBIT A Form of Certificate A-1
EXHIBIT B Summary B-1
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of April 22, 1997 (the
"Agreement"), is between ▇▇▇▇▇▇ Resources Corporation, a Colorado
corporation (the "Company"), and Securities Transfer Corporation,
a Texas corporation (the "Rights Agent").
Recitals
On April 22, 1997 (the "Declaration Date"), the Board of
Directors of the Company authorized and declared a dividend
distribution of one right for each share of common stock, $.01
par value per share, of the Company (the "Common Stock")
outstanding at the close of business on April 25, 1997 (the
"Record Date"), and has authorized the issuance of one Right (as
such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) of this Agreement) for each share of
Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's
treasury) and the Distribution Date. This Agreement sets forth
the terms of the Rights.
Agreement
The parties agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" means any Person that, together with
all Affiliates and Associates of such Person, is the Beneficial
Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan or (ii) any Person who
would otherwise become an Acquiring Person solely as a result of
a reduction in the number of shares of Common Stock outstanding
due to the repurchase of shares of Common Stock by the Company,
unless and until such Person shall purchase or otherwise become
the Beneficial Owner of additional shares of Common Stock
constituting one-half of one percent or more of the then
outstanding shares of Common Stock other than pursuant to a
Qualifying Offer. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of the acquisition by
such Person of newly-issued shares of Common Stock directly from
the Company (it being understood that a purchase from an
underwriter or other intermediary in connection with a public
offering by the Company is not deemed for purposes hereof to be a
purchase directly from the Company); provided, however, that if a
Person shall become the Beneficial Owner of 20% or more of the
shares of Common Stock of the Company then outstanding by reason
of the receipt of newly-issued shares of Common Stock directly
from the Company and shall, after such direct issuance by the
Company, become the Beneficial Owner of any additional shares of
Common Stock of the Company other than pursuant to a Qualifying
Offer (and thereafter remains a Beneficial Owner of 20% or more
of the shares of Common Stock of the Company), then such Person
shall be deemed to be an "Acquiring Person;" and provided,
further, that any transferee from such Person who becomes the
Beneficial Owner of 20% or more of the shares of Common Stock of
the Company then outstanding shall nevertheless be deemed to be
an "Acquiring Person."
(b) "Act" means the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date of this
Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event,
or (C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to Section
11(a)(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 or any successor regulation of
the General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as
a result of an agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this
paragraph (d)) or disposing of any voting securities of the
Company; provided, however, that nothing in this paragraph (d)
shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through such person's participation
in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of Colorado are authorized or obligated by law or executive
order to close.
(f) "Close of business" on a date shall mean 5:00 P.M.,
Denver time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Denver time, on
the next succeeding Business Day.
(g) "Common Stock" shall mean the common stock, $.01 par
value per share, of the Company ("Common Stock"), except that
"Common Stock" when used with reference to any Person other than
the Company shall mean the capital stock of such Person with the
greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of
such Person.
(h) "Continuing Director" shall mean any member of the
Board of Directors of the Company who is not an Acquiring Person
or an Affiliate or Associate of an Acquiring Person or a nominee
or representative of any Acquiring Person or any such Affiliate
or Associate and who was a member of the Board of Directors of
the Company before the Stock Acquisition Date, and any successor
to a Continuing Director who is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate and who was recommended for election or elected to
succeed the Continuing Director by a majority of the Continuing
Directors then on the Board of Directors of the Company.
(i) "Distribution Date" shall mean the earlier of the
following: (i) the close of business on the tenth day after the
Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of
business on the Record Date), or (ii) the close of business on
the tenth Business Day after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to any
such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be
the Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding.
(j) "Person" means any individual, firm corporation,
partnership or other entity.
(k) "Purchase Price" means the exercise price at which a
holder of a Right may purchase one share of Common Stock upon
exercise of a Right.
(l) "Qualifying Offer" means a tender offer or exchange
offer for all outstanding shares of Common Stock at a price and
on terms determined by at least a majority of the members of the
Continuing Directors who are not officers or employees of the
Company and who are not representatives, nominees, Affiliates or
Associates of the Person making such offer, to be (a) at a price
that is fair to Shareholders (taking into account all factors
that such members of the Board deem relevant) and (b) otherwise
in the best interests of the Company and its Shareholders.
(m) "Section 11(a)(ii) Event" means any event described in
Section 11(a)(ii) of this Agreement.
(n) "Section 13 Event" means any event described in clauses
(x), (y) or (z) of Section 13(a) of this Agreement.
(o) "Stock Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, includes,
without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person
that an Acquiring Person has become such.
(p) "Subsidiary" means, with reference to any Person, any
corporation of which an amount of voting securities sufficient to
elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(q) "Triggering Event" means any Section 11(a)(ii) Event or
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints 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 Stock) in accordance with the terms of this Agreement, and
the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agents as it deems
necessary or desirable.
Section 3. Issuance of Rights Certificates. (a) Until the
Distribution Date, (i) the Rights will be evidenced (subject to
paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates,
and (ii) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including
a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, one or more right certificates in substantially the form
of Exhibit A hereto (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to
adjustment as provided herein. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to
Section 11(p) hereof at the time of distribution of the Right
Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. On and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary
of Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date (as
defined in Section 7 hereof), the transfer of any certificates
representing shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be deemed to be issued in respect of all
shares of Common Stock that are issued (whether originally issued
or from the Company's treasury) after the Record Date but prior
to the earlier of the Distribution Date or the Expiration Date
and, in certain circumstances as provided in Section 22 of this
Agreement, after the Distribution Date. Certificates
representing such shares of Common Stock shall also be deemed to
be certificates for the associated Rights upon the same basis as
previously issued certificates for shares of Common Stock
represent the Rights associated with such shares. With respect
to such certificates, until the earlier of (i) the Distribution
Date or (ii) the Expiration Date, the Rights associated with the
Common Stock represented by such certificates shall be evidenced
by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificates. If the Company acquires
any Common Stock after the Record Date but before the
Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall
not be entitled to exercise any rights associated with Common
Stock that is no longer outstanding.
Section 4. Form of Rights Certificates. (a) The Rights
Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in 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 this
Agreement, or as may be required to comply with any applicable
law, rule or regulation, including any rule or regulation of any
stock exchange or other trading facility on which the Rights may
from time to time be listed or traded, or to conform to usage.
Subject to Section 11 and Section 22 of this Agreement, the
Rights Certificates, whenever distributed, shall be dated as of
the Record Date and on their face shall entitle the holders
thereof to purchase such number of shares of Common Stock as
shall be set forth therein at the Purchase Price, but the amount
and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by
a Person described in Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain
(to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
7(e) of such Agreement.
Section 5. Countersignature and Registration. (a) The
Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Rights
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless so countersigned.
If any officer of the Company who has signed any of the Rights
Certificates ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer
of the Company. Any Rights Certificate may be signed on behalf
of the Company by any person who, at the actual date of the
execution of such Rights Certificate, is a proper officer of the
Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not
such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. (a) Subject to Sections 4(b), 7(e) and 14 hereof,
at any time after the close of business on the Distribution Date,
and at or prior to the close of business on the Expiration Date,
any Rights Certificate or Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like
number of shares of Common Stock (or other securities, cash or
other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Sections 4(b), 7 (e) and 14 hereof,
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange
of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) Subject to Section 7(e) hereof, the
registered holder of any Rights 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 Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total
number of shares of Common Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the earlier of (i)
the close of business on April 22, 2001 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof or (iii) the time at which the
Rights are exchanged as provided in Section 24 hereof (the
earlier of (i), (ii) and (iii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $40.00 and
shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per share of
Common Stock (or other shares, securities, cash or other assets,
as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of Common
Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of
shares of Common Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the
total number of shares of Common Stock issuable upon exercise of
the Rights hereunder with a depository agent, requisition from
the depository agent depository receipts representing such number
of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such
receipts shall be deposited by the transfer agent with the
depository agent) and the Company will direct the depository
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depository receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank
check or bank draft payable to the order of the Company. If the
Company is obligated to issue other securities of the Company, to
pay cash and/or to distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when
appropriate.
(d) If the registered holder of any Rights Certificate
exercises fewer than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) of such Rights or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for exercise,
transfer, split up, combination or exchange shall, if surrendered
to the Company or any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly
permitted by this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will from and after
such time as the Rights become exercisable use its best
reasonable efforts to cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock (and any
other securities for which the Rights become exercisable), the
number of shares of Common Stock (and/or other securities) that,
as provided in this Agreement, including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Common Stock (and/or other
securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange or
authorized for quotation on the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq"),
the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares reserved
for such issuance to be authorized for such quotation or to be
listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event, a registration statement
under the Act with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities,
and (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company
may temporarily suspend, for up to 90 days after the date set
forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such
time as a registration statement has been declared effective so
long as the Company uses good faith efforts to that end.
Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction has not been
obtained, the exercise thereof is not permitted under applicable
law or a registration statement has not been declared effective.
(d) The Company will take all such action as may be
necessary to ensure that all Common Stock and/or other securities
delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges that may be payable in respect of the issuance
or delivery of the Rights Certificates and of any certificates
for Common Stock (and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax payable in respect of any
transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of Common Stock (and/or other
securities, as the case may be) in respect of a name other than
that of the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver
any certificates for Common Stock (and/or other securities, as
the case may be), in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such
tax is due.
Section 10. Common Stock Record Date. Each person in whose
name any certificate for Common Stock (and/or other securities,
as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of
such Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Common Stock (and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Stock
(and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not
be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number
and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) If the Company at any time after the Distribution
Date (A) declares a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivides the outstanding Common
Stock, (C) combines the outstanding Common Stock into a smaller
number of shares, or (D) issues any shares of its capital stock
in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the number and kind of shares of Common Stock or
capital stock, as the case may be, issuable on the record date
for such dividend or of the effective date of such subdivision,
combination or reclassification, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase
Price then in effect, the aggregate number and kind of shares of
Common Stock or capital stock, as the case may be, that, if such
Right had been exercised immediately prior to such date and at a
time when the Common Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification.
(ii) If any Person becomes an Acquiring Person other
than pursuant to a transaction subject to Section 13(a) of this
Agreement or a Qualifying Offer, then, promptly following the
occurrence of such event, proper provision shall be made so that
each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance
with this Agreement, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of shares of Common
Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and (y) dividing
that product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d) hereof) per
share of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii) If the number of shares of Common Stock
authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over
(2) the Purchase Price (such excess, the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock that the Board of Directors of the Company has
deemed to have the same value as shares of Common Stock (such
shares of preferred stock being "common stock equivalents")), (4)
debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of
a nationally recognized investment banking firm selected by the
Board of Directors; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause
(B) above within 30 days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company determines
in good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise in
full of the Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days after
the Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such
additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (y)
may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the current
market price (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the Section 11(a)(ii) Trigger Date
and the value of any "common stock equivalent" shall be deemed to
have the same value as the Common Stock on such date.
(b) If the Company fixes a record date for the issuance of
rights, options or warrants to all holders of Common Stock
entitling them to subscribe for or purchase (for a period
expiring within 45 calendar days after such record date) Common
Stock (or shares having the same rights, privileges and
preferences as the shares of Common Stock ("equivalent stock"))
or securities convertible into Common Stock or equivalent stock
at a price per share of Common Stock or per share of equivalent
stock (or having a conversion price per share, if a security
convertible into Common Stock or equivalent stock) less than the
current market price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock on such record date, the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately before such record date by a fraction, the numerator
of which is the number of shares of Common Stock outstanding on
such record date, plus the number of shares of Common Stock that
the aggregate offering price of the total number of shares of
Common Stock and/or equivalent stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such current market price,
and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date, plus the number of
additional shares of Common Stock and/or equivalent stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). If such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Common Stock owned by or held
for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed, and in
the event that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.
(c) If the Company fixes a record date for a distribution
to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share
of Common Stock 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 cash, assets
or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Common
Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per share
of Common Stock. 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 be adjusted to be the
Purchase Price that would have been in effect if such record date
had not been fixed.
(d) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) and Section
24(c) hereof, the "current market price" per share of Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 30
consecutive Trading Days (as defined below) immediately prior to
such date, for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "current market price" per share of Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 10
consecutive Trading Days immediately following such date; and for
purposes of computations made pursuant to Section 24(c) hereof,
the "current market price" per share of Common Stock shall be
deemed to be the closing price per share of Common Stock on the
Trading Day immediately preceding the date of exchange pursuant
to Section 24; provided, however, that if the current market
price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares
of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite 30 Trading-
Day or 10 Trading-Day period, as set forth above, after the ex-
dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then,
and in each such case, the "current market price" shall be
properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted sale price or, if
not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by Nasdaq or such
other system then in use, or, if on any such date the shares of
Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock,
the fair value of such shares on such date as determined in good
faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Notwithstanding anything in this Agreement to the
contrary, no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of
at least one percent in the Purchase Price; provided, however,
that any adjustments that by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock or other share,
as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the
date of the transaction that mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 13(a) hereof, the holder of any Right thereafter
exercised becomes entitled to receive any shares of capital stock
other than Common Stock, the number of such other shares so
receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
Sections 7, 9, 10, 13 and 14 hereof with respect to the Common
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company after any
adjustment of the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of
shares of Common Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of shares of Common
Stock (calculated to the nearest one-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the
nearest 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 Rights Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock issuable
upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares that were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated or par value,
if any, of the number of shares of Common Stock issuable upon
exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary for
the Company validly to issue fully paid and nonassessable such
number of shares of Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of shares
of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on
the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to
such holder a due ▇▇▇▇ or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional
or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Common Stock, (ii)
issuance wholly for cash of any shares of Common Stock at less
than the current market price, (iii) issuance wholly for cash of
shares of Common Stock or securities that by their terms are
convertible into or exchangeable for shares of Common Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to
holders of its Common Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with or
merge with or into any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o)
hereof), or (ii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect that would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, if the Company at any time after the Declaration Date
and before the Distribution Date (i) declares a dividend on the
outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivides the outstanding shares of Common Stock, or
(iii) combines the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights associated
with each share of Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to
such event by a fraction, the numerator of which shall be the
total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof (other than adjustments occurring
prior to the Distribution Date or any Triggering Event), 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 Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder
of a Rights Certificate in accordance with Section 26 hereof.
Promptly after the Distribution Date or any Triggering Event, the
Company shall comply with the foregoing for any adjustment that
occurred prior to the Distribution Date or such Triggering Event.
The Rights Agent shall be fully protected in relying on any
certificate delivered by the Company pursuant to this Section 12
and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) If, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge into, any other Person (other than a
Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which and all of which comply with Section
11(o) hereof), then, and in each such case (except as
contemplated by Section 13(d) hereof), proper provision shall be
made so that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non-assessable and
freely tradable shares of Common Stock of the Principal Party (as
defined below), not subject to any liens, encumbrances, rights of
first refusal or other adverse claims or restrictions, as shall
be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of shares of Common Stock
for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such shares for which a Right
was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event) by the Purchase Price in effect
immediately prior to such first occurrence, and dividing that
product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the
current market price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on
the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume,
by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) Section
11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of Common
Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that receives the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time or has not been continuously
over the preceding 12-month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other
Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Expiration
Date; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
This Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If a Section 13
Event occurs at any time after the occurrence of a Section
11(a)(ii) Event, the Rights that have not theretofore been
exercised shall thereafter become exercisable in the manner
described in Section 13(a), subject to Section 7(e).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not apply to a transaction described
in subparagraphs (x) and (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a Qualifying Offer (or a
wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such transaction is
not less than the highest price paid per share pursuant to the
Qualifying Offer and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of
consideration paid pursuant to the Qualifying Offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section
11(p) hereof, or to distribute Rights Certificates that evidence
fractional Rights. After the Distribution Date, in lieu of such
fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights
are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company
may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of
one share of Common Stock. For purposes of this Section 14(b),
the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock).
Any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of the Common Stock), may,
on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief
against actual or threatened violations of this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the principal office or offices of the Rights
Agent designated for such purposes, duly endorsed or accompanied
by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of shares of Common Stock or any
other securities of the Company that may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, suit, action, proceeding or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for any action taken
or suffered by the Rights Agent in connection with the acceptance
and administration of this Agreement and the exercise and
performance of its duties hereunder, including the costs and
expenses of defending against and appealing any claim of
liability arising therefrom, directly or indirectly.
(b) 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 acceptance and
administration of this Agreement or the exercise and performance
of its duties hereunder in reliance upon any Rights Certificate
or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, instruction or other paper or document
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person
or Persons, or otherwise upon the advice of counsel as set forth
in Section 21 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions
of Section 22 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name
of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its Changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent shall
have only the duties and obligations expressly set forth in this
Agreement. There shall be no implied duties or obligations of
the 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
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and
the advice of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance
with such advice.
(b) Whenever in the administration, exercise and
performance of its duties under this Agreement the Rights Agent
shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring
Person and the determination of "current market price") be proved
or established by the Company prior to taking, suffering or
omitting any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, any
Vice 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 any such certificate shall be full authorization and
protection to the Rights Agent for any action taken, suffered or
omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall not be liable or responsible
hereunder to the Company except for its own negligence, bad faith
or willful misconduct.
(d) The Rights Agent shall not be liable or responsible for
or by reason of any of the representations, warranties,
statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except as to the fact that it has
countersigned the Rights Certificates) or be required to verify
the same, but all such representations, warranties, statements
and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not have any liability or
responsibility in respect of the legality, validity or
enforceability of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or
in respect of the legality, validity, enforceability or execution
of any Rights Certificate (except its countersignature thereof);
nor shall it be liable or responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be liable or
responsible for any adjustment including, without limitation, as
required under the provisions of Section 11 or 13 hereof
(including any adjustment which results in the Rights becoming
void) or liable or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after
receipt of a notice or certificate pursuant to Section 12
describing any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock or
other securities to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
other securities will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent or 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 or directions with respect to the
administration of this Agreement and the execution and
performance of its duties hereunder and certificates delivered
pursuant to any provision hereof from the Chairman of the Board,
any Vice Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer
or any Assistant Treasurer of the Company, and is authorized to
apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable or responsible for
any action taken, suffered or omitted to be taken by it in good
faith in accordance with instructions of any such officer or for
any delay in acting while waiting for such instructions.
(h) The Rights Agent and any affiliate, 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 the Rights
Agent were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent or any such affiliate,
shareholder, director, officer or employee from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be liable or responsible for any
act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss or damages to the Company or
to the holders of the Rights resulting from any such act,
omission, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment
thereof. The Rights Agent shall not be under any duty or
responsibility to insure compliance with any applicable federal
or state securities laws in connection with the issuance,
transfer or exchange of the Rights Certificates.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise, transfer, split up, combination
or exchange, the Certificate attached to the form of assignment
or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause
1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise, transfer, split
up, combination or exchange without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing
mailed to the Company, and to each transfer agent of the Common
Stock, by registered or certified mail, and, after the
Distribution Date, to the holders of the Rights 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 of the Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within 30 days after giving notice
of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall
be a corporation organized and doing business under the laws of
one of the United States in good standing, which is authorized
under such laws to exercise corporate trust powers and is subject
to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000. 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 of the Common Stock, and mail a
notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with this Agreement. In
addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant
to the exercise of stock options or warrants or under any
employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) The Board of
Directors of the Company may, at its option, at any time before
the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date (or, if the Stock
Acquisition Date occurs before the Record Date, the close of
business on the tenth day after the Record Date), or (ii) the
Final Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right,
as such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to
as the "Redemption Price"). Notwithstanding the foregoing, if
the Board of Directors of the Company authorizes redemption of
the Rights in either of the circumstances set forth in clauses
(i) or (ii) below, then there must be Continuing Directors then
in office and such authorization shall require the concurrence of
a majority of such Continuing Directors: (i) such authorization
occurs on or after the time a Person becomes an Acquiring Person,
or (ii) such authorization occurs on or after the date of a
change (resulting from a proxy or consent solicitation) in a
majority of the directors in office at the commencement of such
solicitation if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such
solicitation, a majority of the Board of Directors of the Company
has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider
taking, any action that would result in such Person becoming an
Acquiring Person or that would cause the occurrence of a
Triggering Event. Notwithstanding anything in this Agreement to
the contrary, the Rights shall not be exercisable at any time
when the Company may redeem them pursuant to this Section 23.
The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the "current market price," as
defined in Section 11(d) hereof, of the Common Stock at the time
of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) At such time as specified in the resolution of the
Board of Directors ordering redemption of the Rights (or at such
time as is determined by a committee of the Board of Directors
authorized by the Board of Directors to specify such time at the
time of the Board's adoption of such resolution or immediately
upon such action of the Board of Directors if the Board does not
specify a date or so empower a committee) and without any further
action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Any failure to
give or inadequacy of such notice shall not affect the validity
of the redemption. The Redemption Price shall be payable to
those Persons who are record holders of the Rights at the close
of business on a date determined by the Board of Directors, which
date shall be at least eleven days after the Board of Directors
orders redemption of the Rights. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time except (i) in the manner
specifically set forth in this Section 23 or in Section 24 hereof
or (ii) in connection with the purchase of Common Stock prior to
the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time and from time to time on
or after a Section 11(a)(ii) Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or
any entity holding shares of Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding. In the event that
there shall not be sufficient Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the
Company shall use its best reasonable efforts to take all such
action as may be necessary to authorize additional Common Stock
for issuance upon exchange of the Rights.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
Section 24(a) and without any further action and without any
notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by
which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute for any share of Common
Stock exchangeable for a Right (i) "common stock equivalents,"
(ii) cash, (iii) debt securities of the Company, (iv) other
assets, or (f) any combination of the foregoing, having an
aggregate value which a majority of the Continuing Directors and
the Board of Directors of the Company shall have determined in
good faith to be equal to the current market price of one share
of Common Stock (determined pursuant to Section 11(d) hereof).
Section 25. Notice of Certain Events. (a) In case the
Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the
holders of Common Stock, or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase
any additional shares of Common Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to
effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Common Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which and all of
which comply with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Common Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Common Stock 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 shares
of Common Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof and (ii) all references in the
preceding paragraph to Common Stock shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights to or on the Company shall be sufficiently
given or made if and when sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
▇▇▇▇▇▇ Resources Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of
any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if and when sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
Securities Transfer Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if before the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if and when sent by first-class
mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, following the first
occurrence of an event set forth in clauses (i) or (ii) of the
first provision to Section 23(a) hereof, shall be effective only
if there are Continuing Directors and shall require the
concurrence of a majority of such Continuing Directors), or (iv)
to change or supplement the provisions hereunder in any manner
that the Company deems necessary or desirable and that does not
adversely affect the interests of the holders of Rights
Certificates (other than any Acquiring Person); provided, this
Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights. Without limiting the foregoing, the
Company may at any time or from time to time prior to such time
as any Person becomes an Acquiring Person amend this Agreement to
lower the thresholds set forth in Sections 1(a) and 1(i) to not
less than 10%. Upon the delivery of a certificate from an
appropriate officer of the Company stating that the proposed
supplement or amendment is in compliance with this Section 27,
the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made pursuant to this Section 27
that changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of shares of Common Stock for which
a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement. The Board of Directors of the
Company (with, where specifically provided for herein, the
concurrence of the Continuing Directors) shall have the exclusive
power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board (with,
where specifically provided for herein, the concurrence of the
Continuing Directors) or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret this
Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) that are done or made by
the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) in good faith, shall (x)
be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y)
not subject the Board or the Continuing Directors to any
liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term of this Agreement is
held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable, and the Board of
Directors of the Company determines in its good faith judgment
that severing the invalid language from this Agreement would
materially adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of
business on the tenth day following the date of such
determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under Colorado law and for all purposes shall be
governed by and construed in accordance with Colorado law
applicable to contracts made and to be performed entirely within
such state.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts, each which shall be an original,
and all of which shall together constitute a single instrument.
Section 34. Descriptive Headings. Descriptive headings of
the Sections of this Agreement are inserted for convenience only
and shall not affect the meaning of this Agreement.
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.
ATTEST: ▇▇▇▇▇▇ RESOURCES CORPORATION
By: _______________________ By: ____________________________
Secretary President and Chief
Executive Officer
ATTEST: SECURITIES TRANSFER CORPORATION
By: _______________________ By: ____________________________
Secretary Name: __________________________
Title: _________________________
EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R-_______
NOT EXERCISABLE AFTER APRIL 22, 2001 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
RIGHTS CERTIFICATE
▇▇▇▇▇▇ RESOURCES CORPORATION
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 of the Rights Agreement dated as of April
22, 1997 (the "Rights Agreement") between ▇▇▇▇▇▇ Resources
Corporation, a Colorado corporation (the "Company"), and
Securities Transfer Corporation, a Texas corporation (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00
P.M. (Denver time) on April 22, 2001 at the office or offices of
the Rights Agent designated for such purpose, or its successor as
Rights Agent, one fully paid, non-assessable share of Common
Stock of the Company, at a purchase price of $40.00 per share
(the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares
that 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 April 22, 1997, based on the Common Stock as
constituted at such date.
------------------------
* The portion of the legend in brackets shall be inserted in
the place of the preceding sentence if applicable.
Upon the occurrence of a Section 11(a)(ii) Event (as defined
in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as
defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of
a person who, after such transfer, became an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, such Rights
shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Common Stock or other securities
that may be purchased upon exercise of the Rights evidenced by
this Rights Certificate are subject to modification and
adjustment upon the occurrence of certain events, including a
Triggering Event (as defined in the Rights Agreement).
This Rights Certificate is subject to the terms of the
Rights Agreement, which terms are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the above-mentioned office of
the Rights Agent and are also available upon written request to
the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this
Rights Certificate is exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the Rights Agreement, the Rights evidenced by
this Certificate may be (i) redeemed by the Company at its option
at a redemption price of $.01 per Right at any time prior to the
earlier of the close of business on (A) the tenth day following
the Stock Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement), and (B) the Final Expiration
Date (as defined in the Rights Agreement) or (ii) exchanged by
the Company under certain circumstances, at its option, in whole
or in part, for one share of Common Stock per Right (or, in
certain cases, other securities, cash or assets of the Company),
subject in each case to adjustment in certain events as provided
in the Rights Agreement. Under certain circumstances set forth
in the Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Common Stock or of any other securities of the
Company issuable upon the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose unless countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of ________ ____, _____
ATTEST: ▇▇▇▇▇▇ RESOURCES CORPORATION
By: ________________________ By: __________________________
Secretary President and Chief
Executive Officer
Countersigned: SECURITIES TRANSFER CORPORATION
By: ____________________________
Authorized Officer
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder
to transfer the Rights Certificate.)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein and does hereby irrevocably constitute and
appoint _____________________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _____________________
_______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________________
_______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: ▇▇▇▇▇▇ Resources Corporation:
The undersigned hereby irrevocably elects to exercise
______________ Rights represented by this Rights Certificate to
purchase the shares of Common Stock issuable upon the exercise of
the Rights (or such other securities of the Company or of any
other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
________________________________________
Please insert social security
or other identifying number
________________________________________
________________________________________
________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
________________________________________
Please insert social security
or other identifying number
________________________________________
________________________________________
________________________________________
(Please print name and address)
Dated: _____________________
_______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________________
_______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular.
EXHIBIT B
▇▇▇▇▇▇ RESOURCES CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On April 22, 1997, the Board of Directors of ▇▇▇▇▇▇
Resources Corporation (the "Company") declared a dividend
distribution of one Right for each outstanding share of the
Company's Common Stock to shareholders of record at the close of
business on April 25, 1997. Each Right entitles the registered
holder to purchase from the Company one share of the Company's
$0.01 par value common stock (the "Common Stock") at a Purchase
Price of $40.00 per share, subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and
Securities Transfer Corporation as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date will
occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 20% or more of the
outstanding shares of Common Stock (the "Stock Acquisition
Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or
group beneficially owning 20% or more of such outstanding shares
of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
and (ii) the surrender for transfer of any certificates for
Common Stock will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on April 22, 2001,
unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
If any person becomes an Acquiring Person other than
pursuant to a Qualifying Offer (as defined below), each holder of
a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two
times the exercise price of the Right. Notwithstanding any of
the foregoing, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable in any event until such time
as the Rights are no longer redeemable by the Company as set
forth below.
A "Qualifying Offer" means a tender offer or exchange offer
for all outstanding shares of Common Stock at a price and on
terms determined by at least a majority of the Continuing
Directors (as defined below) who are not officers or employees of
the Company and who are not related (as specified in the Rights
Agreement) to the Person making such offer, after receiving
advice from one or more investment banking firms, to be fair to
and in the best interests of the Company and its shareholders.
For example, at a purchase price of $40.00 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the second preceding
paragraph would entitle its holder to purchase $80.00 worth of
Common Stock (or other consideration, as noted above) for $40.00.
Assuming that the Common Stock had a per share value of $10.00 at
such time, the holder of each valid Right would be entitled to
purchase eight shares of Common Stock for $40.00.
If at any time following the Stock Acquisition Date (i) the
Company is acquired in a merger or other business combination
transaction in which the Common Stock is changed or exchanged or
in which the Company is not the surviving corporation (other than
a merger that follows a Qualifying Offer and satisfies certain
other requirements), or (ii) 50% or more of the Company's assets
or earning power is sold or transferred, each holder of a Right
(except Rights that have been previously voided as set forth
above) shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two
times the exercise price of the Right. The events set forth in
this paragraph and in the third preceding paragraph are referred
to as the "Triggering Events."
The Purchase Price payable, and the number of shares of
Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain
rights or warrants to subscribe for Common Stock or convertible
securities at less than the current market price of the Common
Stock, or (iii) upon the distribution to holders of the Common
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional shares will be issued
and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Common Stock on the last trading date
prior to the date of exercise.
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash, Common Stock
or other consideration deemed appropriate by the Board of
Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence
of a majority of the Continuing Directors. Immediately upon the
action of the Board of Directors ordering redemption of the
Rights or at such other time as may be specified by the Board
when it orders redemption, with, where required, the concurrence
of the Continuing Directors, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01
redemption price.
The term "Continuing Directors" means any member of the
Board of Directors of the Company who was a member of the Board
prior to the Stock Acquisition Date, and any person who is
subsequently elected to the Board if such person is recommended
or approved by a majority of the Continuing Directors, but shall
not include an Acquiring Person, or an affiliate or associate of
an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income if the Rights become
exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth
above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the
Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors)
in order to cure any ambiguity, to make changes that do not
adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however,
that no amendment to adjust the time period governing redemption
shall be made at a time when the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current
Report on Form 8-K dated April 22, 1997. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.