EXHIBIT 4.1
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▇▇▇▇▇▇▇▇ OFFSHORE SERVICES, INC.
AND
MELLON INVESTOR SERVICES LLC
AS RIGHTS AGENT
----------
RIGHTS AGREEMENT
DATED AS OF JUNE 18, 2003
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................5
Section 3. Issuance of Right Certificates..................................................................6
Section 4. Form of Right Certificates......................................................................7
Section 5. Countersignature and Registration...............................................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates......................................................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................9
Section 8. Cancellation and Destruction of Right Certificates.............................................12
Section 9. Reservation and Availability of Preferred Stock................................................12
Section 10. Preferred Stock Record Date....................................................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights...................14
Section 12. Certification of Adjusted Purchase Price or Number of Shares...................................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........................22
Section 14. Fractional Rights and Fractional Shares........................................................26
Section 15. Rights of Action...............................................................................27
Section 16. Agreement of Right Holders.....................................................................27
Section 17. Right Certificate Holder Not Deemed a Stockholder..............................................28
Section 18. Concerning the Rights Agent....................................................................28
Section 19. Merger or Consolidation of, or Change in Name of, the Rights Agent.............................29
Section 20. Rights and Duties of Rights Agent..............................................................29
Section 21. Change of Rights Agent.........................................................................31
Section 22. Issuance of New Right Certificates.............................................................32
Section 23. Redemption and Termination.....................................................................33
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Section 24. Exchange.......................................................................................33
Section 25. Notice of Certain Events.......................................................................35
Section 26. Notices........................................................................................36
Section 27. Supplements and Amendments.....................................................................37
Section 28. Successors.....................................................................................38
Section 29. Determinations and Actions by the Board of Directors, etc......................................38
Section 30. Benefits of this
Rights Agreement..............................................................38
Section 31. Adjustments to Rights Upon Occurrence of Initial Public Offering...............................38
Section 32. Severability...................................................................................39
Section 33. Governing Law..................................................................................39
Section 34. Counterparts...................................................................................39
Section 35. Descriptive Headings...........................................................................39
EXHIBITS
A Certificate of Designation of Series A Preferred Stock
B Form of Right Certificate
C Summary of Rights to Purchase Stock
ii
RIGHTS AGREEMENT
This
RIGHTS AGREEMENT, dated as of June 18, 2003 is by and between
▇▇▇▇▇▇▇▇ Offshore Services, Inc., a Delaware corporation (the "Company"), and
Mellon Investor Services LLC, a New Jersey limited liability company (the
"Rights Agent").
Effective as of June 18, 2003, The Board of Directors of the Company
authorized and declared a dividend of one right (a "Right") for each share of
Common Stock (as defined below) of the Company outstanding as of the close of
business on June 18, 2003 (the "Record Date"), each such Right representing the
right to purchase one one-hundredth (subject to adjustment) of one share of
Preferred Stock (as defined below), upon the terms and subject to the conditions
set forth below, and has further authorized and directed the issuance of one
Right with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earliest of the Distribution Date and the
Expiration Date (each as defined below).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person (as defined below) who or
which, together with all Affiliates and Associates (each as defined below) of
such Person, shall be the Beneficial Owner (as defined below) of 10% or more of
the shares of the Common Stock of the Company then outstanding, but shall not
include (i) any Exempt Person (as defined below), or (ii) any Person who or
which, together with all Affiliates and Associates of such Person, would be an
Acquiring Person solely by reason of (A) being the Beneficial Owner of 10% or
more of the shares of Common Stock on the date of this Agreement or as a result
of participation in the 2003 private offering by the Company of up to 9,000,000
shares of the Common Stock at a price per share of $5.00, (B) being the
Beneficial Owner of shares of Common Stock, the Beneficial Ownership of which
was acquired by such Person pursuant to any action or transaction or series of
related actions or transactions approved by the Board of Directors before such
Person otherwise became an Acquiring Person; or (C) a reduction in the aggregate
number of issued and outstanding shares of Common Stock pursuant to a
transaction or a series of related transactions approved by the Board of
Directors; provided, however, that if a Person shall be or become the Beneficial
Owner of 10% or more of the shares of Common Stock of the Company then
outstanding by reason of subclause (A), (B) or (C) of clause (ii) above and
shall thereafter become the Beneficial Owner of any additional shares of the
Common Stock of the Company (including as a result of the exercise of any
applicable preemptive rights), then such Person shall be deemed to be an
"Acquiring Person" unless upon consummation of the acquisition of such
additional shares such Person does not (1) own 10% or more of the Common Stock
then outstanding or (2) own a greater percentage of the Common Stock outstanding
following the later of such acquisition or the consummation of the offering
pursuant to which such acquisition was made than such person owned before such
acquisition for any reason other than a rounding of the shares acquired to the
nearest whole number that would avoid odd lots of fewer than 100 shares.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" became such inadvertently (including, without limitation, because (i)
such Person was unaware that it
beneficially owned a percentage of Common Stock that would otherwise cause such
Person to be an "Acquiring Person" or (ii) such Person was aware of the extent
of its Beneficial Ownership of Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
as promptly as practicable divested or divests itself of Beneficial Ownership of
a sufficient number of shares of Common Stock so that such Person would no
longer be an "Acquiring Person," then such Person shall not be deemed to be or
to have become an "Acquiring Person" for any purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this
Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" and shall be deemed to have "Beneficial Ownership" of, any
securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, is the
"beneficial owner" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange Act, as
in effect on the date of this
Rights Agreement) or otherwise
has the right to vote or dispose of, 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 (i) as a result of any
agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to
a 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
then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report);
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right or obligation to acquire (whether such right or
obligation is exercisable or effective immediately or only
after the passage of time or the occurrence of an event or
both) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of conversion
rights, exchange rights, other rights, warrants or options or
otherwise; 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
(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,
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voting (except as set forth in the proviso to subparagraph (i)
of this definition) or disposing of any voting securities of
the Company;
provided, however, that nothing in this definition 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 forty days after the date of such acquisition.
"Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the States of Louisiana, New Jersey or
Texas are authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M., Houston,
Texas time; provided, however, that if such date is not a Business Day, it shall
mean 5:00 P.M., Houston,
Texas time, on the next succeeding Business Day.
"Closing Price" of a security for any day shall mean the last sales
price, regular way, on such day or, if no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, on such day, in either
case as reported in the principal transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange, or, if
such security is not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which such security
is listed or admitted to trading, or, if such security is not listed or admitted
to trading on any national securities exchange but sales price information is
reported for such security, the last quoted sales price as reported by NASDAQ or
such other self-regulatory organization or registered securities information
processor (as such terms are used under the Exchange Act) that then reports
information concerning such security, or, if sales price information is not so
reported, the average of the high bid and low asked prices in the
over-the-counter market on such day, as reported by NASDAQ or such other entity,
or, if on such day such security is not quoted by any such entity, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in such security selected by the Board of Directors of the
Company. If on such day no market maker is making a market in such security, the
fair value of such security on such day as determined in good faith by the Board
of Directors of the Company shall be used.
"Common Stock" when used with reference to the Company (and, unless
otherwise specified herein, shall be deemed to refer to the Company) shall mean
the shares of the Company's common stock, $.01 par value per share. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
Person or, if such other person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
"Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
"Distribution Date" shall mean the earlier of (i) the Close of Business
on the tenth Business Day after the Stock Acquisition Date (or, if such Stock
Acquisition Date results from the consummation of a Permitted Offer, such later
date as may be determined by the Company's Board of Directors before the
Distribution Date occurs) or, if the tenth day after the Stock Acquisition Date
occurs before the Record Date, the Close of Business on the Record Date, or
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(ii) the Close of Business on the tenth Business Day (or such later date as may
be determined by the Company's Board of Directors before the Distribution Date
occurs) after the date that a tender offer or exchange offer by any Person
(other than any Exempt Person) 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 an Acquiring Person. The
Board of Directors of the Company may, to the extent set forth in the preceding
sentence, defer the date set forth in clause (i) or (ii) of the preceding
sentence to a specified later date or to an unspecified later date to be
determined by a subsequent action or event.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" shall have the meaning set forth in Section 24 hereof.
"Exempt Person" shall mean the Company, any Subsidiary of the Company,
any employee benefit plan or employee stock plan of the Company or of any
Subsidiary of the Company, and any Person organized, appointed or established by
the Company for or pursuant to the terms of any such plan.
"Expiration Date" shall mean the earliest of (i) the Final Expiration
Date, (ii) the time at which the Rights are redeemed as provided in Section 23
hereof, (iii) the time at which the Rights expire pursuant to Section 13(d)
hereof and (iv) the time at which all Rights then outstanding and exercisable
are exchanged pursuant to Section 24 hereof.
"Final Expiration Date" shall mean the Close of Business on June 17,
2013.
"Flip-In Event" shall mean an event described in Section 11(a)(ii)
hereof.
"Flip-Over Event" shall mean any event described in clause (x), (y) or
(z) of Section 13(a) hereof.
"NASDAQ" shall mean The NASDAQ Stock Market.
"Permitted Offer" shall mean a tender offer or an exchange offer for
all outstanding Common Stock at a price and on terms determined by at least a
majority of the members of the Board of Directors, after receiving advice from
one or more investment banking firms, to be (a) at a price and on terms that are
fair to stockholders (taking into account all factors that such members of the
Board deem relevant including, without limitation, prices that could reasonably
be achieved if the Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best interests of the Company
and its stockholders.
"Person" shall mean any individual, firm, corporation, limited
liability company, partnership, association, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company, having the rights,
powers and preferences set forth in the Form of Certificate of Designation
attached to this
Rights Agreement as EXHIBIT A and, to the extent that there is
not a sufficient number of shares of Series A Junior Participating preferred
stock authorized to permit the full exercise of the Rights, any other series of
preferred stock, par value
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$.01 per share, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior Participating
Preferred Stock.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Sections 4 and
7(b) hereof.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person.
"Subsidiary" of a Person shall mean any corporation or other entity of
which securities or other ownership interests having voting power sufficient to
elect a majority of the Board of Directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by such Person or by
any corporation or other entity that is otherwise controlled by such Person.
"Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
"Trading Day" with respect to a security shall mean a day on which the
principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business, or, if such
security is not listed or admitted to trading on any national securities
exchange but is quoted by NASDAQ, a day on which NASDAQ reports trades, or, if
such security is not so quoted, a Business Day.
"Transfer Tax" shall mean any tax or charge, including any documentary
stamp tax, imposed or collected by any governmental or regulatory authority in
respect of any transfer, issuance or delivery of any security, instrument or
right, including Rights, Preferred Stock or Common Stock.
"Triggering Event" shall mean any Flip-In Event or any Flip-Over Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and to take certain actions in
respect of the holders of the Rights (who in accordance with Section 3 hereof
shall prior to the Distribution Date also be the holders of the shares of Common
Stock) as are expressly set forth herein, although it is expressly agreed that
the Rights Agent shall not act as agent for such holders, in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such Co-Rights Agent.
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Section 3. Issuance of Right Certificates.
(a) Until the Distribution Date, (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for shares of Common Stock registered in the names of the
holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right
to receive Right Certificates will be transferable only in connection
with the transfer of the underlying shares of Common Stock. As soon as
practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send
or cause to be sent (and the Rights Agent will, if requested and
provided with all necessary information, send) by first-class, insured
postage-prepaid mail, to each record holder of shares of Common Stock
as of the Close of Business on the Distribution Date (other than any
Person referred to in the first sentence of Section 7(e)), at the
address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of EXHIBIT B attached hereto (a
"Right Certificate"), evidencing one Right (subject to adjustment as
provided herein) for each share of Common Stock so held. As of and
after the Distribution Date, the Rights will be evidenced solely by
such Right Certificates. Upon the occurrence of the Distribution Date,
the Company shall promptly notify the Rights Agent thereof in writing,
or confirm any oral notification thereof in writing on or before the
next following Business Day. Until such notice is received by the
Rights Agent, the Rights Agent may for all purposes conclusively
presume that the Distribution Date has not occurred.
(b) On the Record Date, or as soon as practicable thereafter,
for informational purposes, the Company will send a copy of a Summary
of Rights to Purchase Stock in substantially the form of EXHIBIT C
attached hereto (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of shares of 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
shares of Common Stock outstanding as of the Record Date, until the
earlier of the Distribution Date or the Expiration Date, the Rights
will be evidenced by such Common Stock certificates registered in the
names of the holders thereof. Until the earlier of the Distribution
Date or the Expiration Date, the surrender for transfer of any
certificate for shares of Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with the shares
of Common Stock represented thereby.
(c) Certificates issued for shares of Common Stock which
become outstanding (including, without limitation, upon the transfer or
exchange of outstanding shares of Common Stock, shares of Common Stock
originally issued or delivered from the Company's treasury or
reacquired shares of Common Stock referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them a legend
substantially in the following form:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a
Rights Agreement between
▇▇▇▇▇▇▇▇ Offshore Services, Inc. (the "Company") and Mellon
Investor
6
Services LLC (the "Rights Agent"), dated as of June 18, 2003,
as it may from time to time be supplemented or amended (the
"
Rights Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at the
Company's principal executive offices. Under certain
circumstances, as set forth in the
Rights Agreement, such
Rights may be redeemed, may be exchanged, may expire or may be
evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the
registered holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, Rights issued
to any Person who becomes an Acquiring Person (as defined in
the Rights Agreement) whether currently held by or on behalf
of such Person or by any subsequent holder will become null
and void and may not be transferred to any Person.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the expiration or redemption of the
Rights, the Rights associated with the shares of Common Stock represented by
such certificates shall be evidenced by such certificates alone, and surrender
for transfer of any such certificates shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby. If the
Company purchases or acquires any shares of Common Stock after the Record Date
but prior to the Distribution Date, any Rights associated with such shares of
Common Stock shall be deemed cancelled and retired so that the Company shall not
be entitled to exercise any Rights associated with the shares of Common Stock
which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase and assignment to be printed on the reverse
thereof) shall be substantially in the form set forth in EXHIBIT B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of, and which do not affect the duties,
rights or responsibilities of the Rights Agent under, this Rights Agreement, or
as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or interdealer quotation system on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Sections
11, 13 and 22 hereof, Right Certificates shall entitle the holders thereof to
purchase such number of one one-hundredth of a share of Preferred Stock as shall
be set forth therein at the price per such one one-hundredth of a share of
Preferred Stock set forth therein (the "Purchase Price"), but the number of such
shares of Preferred Stock and the Purchase Price shall be subject to adjustment
as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President or any of its Vice Presidents, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof and shall be attested to by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The
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Right Certificates shall be countersigned by the Rights Agent either
manually or by facsimile signature and shall not be valid for any
purpose unless countersigned. If any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right 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 Right Certificates had not ceased to be such
officer of the Company; and any Right Certificates may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right 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 and receipt by the Rights
Agent of the notice and other information referred to in Section 3(a),
the Rights Agent will keep or cause to be kept, at the office or
offices designated by the Rights Agent as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 13(d), 14 and
24 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 Right Certificate or Right Certificates (other than Rights
Certificates representing rights that have become null and void
pursuant to Section 7(e) hereof) may be transferred or split up,
combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredth of a share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring
to transfer any Right Certificate shall surrender the Right Certificate
at the office of the Rights Agent designated for such purpose with the
certificate and form of assignment on the reverse side thereof duly
endorsed (or enclose with such Right Certificate a written instrument
of transfer in form satisfactory to the Company and the Rights Agent),
duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent and shall surrender the Right Certificate
or Right Certificates to be split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. The Right
Certificates are transferable only on the registry books of the Rights
Agent. Neither the Rights Agent not the Company shall be obligated to
take any action whatsoever with respect to the transfer, split up,
combination or exchange of any such surrendered Right Certificate or
Certificates until the registered holder thereof shall have properly
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completed and signed the certificate contained in the form of
assignment set forth on the reverse side of each such Right Certificate
and provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) thereof and the Affiliates and
Associates of such Beneficial Owner (or former Beneficial Owner), and
of the Rights evidenced thereby, as the Company or the Rights Agent
shall reasonably request. Thereupon, the Rights Agent shall, subject to
the provisions hereof, countersign and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company or the Rights Agent may require payment of
a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any
Right Certificates. The Rights Agent shall have no duty or obligation
under this Section unless and until it is satisfied that all such
Transfer Taxes have been paid.
(b) Subject to the provisions of Section 7(e) hereof, at any
time after the Distribution Date and prior to the Expiration Date, upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Company's request, 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 Right Certificate if mutilated,
the Company will issue and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Except as otherwise provided herein, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby in
whole or in part at any time after the Distribution Date upon surrender
of the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof properly completed and duly
executed (with signatures duly guaranteed), and shall otherwise
surrender the Rights Certificate upon redemption under Section 23
hereof or exchange under Section 24 hereof, to the Rights Agent at the
office of the Rights Agent designated for such purpose, together with,
in the case of exercise, payment of (i) the Purchase Price for each one
one-hundredth of a share of Preferred Stock (or other securities, cash
or other assets, as the case may be) as to which the surrendered Rights
are then being exercised and, in the case of exercise, redemption or
exchange, (ii) an amount equal to any applicable Transfer Tax required
to be paid by the holder of such surrendered Rights, whether
surrendered upon exercise, redemption or exchange, in accordance with
Section 9(e) hereof in cash or by certified check, cashier's check,
bank draft or money order payable to the order of the Company or the
Rights Agent, at or prior to the Expiration Date.
(b) The Purchase Price for each one one-hundredth of a share
of Preferred Stock issued pursuant to the exercise of a Right shall
initially be $75.00, shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America, in accordance with paragraph
7(c) below.
9
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase properly
completed and duly executed, accompanied by payment of the aggregate
Purchase Price applicable to the number of one one-hundredth of a share
of Preferred Stock (or other securities, cash or other assets, as the
case may be) to be purchased and an amount equal to any applicable
Transfer Tax required to be paid by the holder of such Right
Certificate in accordance with Section 9(e) hereof in cash or by
certified check, cashier's check, bank draft or money order payable to
the order of the Company or the Rights Agent, the Rights Agent shall,
subject to Section 20(j) hereof, thereupon promptly (i)(A) requisition
from any transfer agent of the Preferred Stock certificate(s)
representing the total number of one one-hundredth of a share of
Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B)
if the Company shall have elected to deposit the total number of one
one-hundredth of a share of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredth of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented
by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to
comply with such request, (ii) as provided in Section 14(b), at the
election of the Company, cause depositary receipts to be issued in lieu
of fractional shares of Preferred Stock, (iii) if the election provided
for in the immediately preceding clause (ii) has not been made,
requisition from the Company the amount of cash to be paid in lieu of
the issuance of fractional shares of Preferred Stock in accordance with
Section 14(b) hereof, (iv) after receipt of such certificates and/or
depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and (v) when
appropriate, after receipt thereof, deliver such cash to or upon the
order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities, other than
shares of Preferred Stock, pursuant to Section 13 hereof, the Rights
Agent shall promptly take the appropriate actions corresponding in such
case to those referred to in the foregoing clauses (i) through (v) of
this Section 7(c). Notwithstanding the foregoing provisions of this
Section 7(c), the Company may suspend (with prompt written notice
thereof to the Rights Agent) the issuance of shares of Preferred Stock
or other securities upon exercise of a Right for a reasonable period,
not in excess of 90 days, during which the Company seeks to register,
under the Securities Act and any applicable securities law of any other
jurisdiction, the shares of Preferred Stock or such other securities to
be issued pursuant to the Rights; provided, however, that nothing
contained in this Section 7(c) shall relieve the Company of its
obligations under Section 9(c) hereof.
(d) If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the exercisable Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or his duly authorized
assign, subject to the provisions of Section 14 hereof.
(e) Notwithstanding any provision of this Rights Agreement to
the contrary, from and after the first occurrence of a Flip-In Event,
any Rights that are beneficially
10
owned by (i) an Acquiring Person (or an Associate or Affiliate of an
Acquiring Person), (ii) a direct or indirect transferee of such
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a direct
or indirect transferee of such Acquiring Person (or any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person's 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 such Affiliate or Associate) or to any Person with whom such
Acquiring Person (or such Affiliate or Associate) has any continuing
agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors 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
any provision of this Rights Agreement or otherwise. The Company shall
notify the Rights Agent when this Section 7(e) applies and shall use
all reasonable effort to ensure that the provisions of this Section
7(e) are complied with, but neither the Company nor the Rights Agent
shall have any liability to any holder of Right Certificates or any
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. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an
Acquiring Person (or any Associate or Affiliate thereof) and no Right
Certificate shall be issued at any time upon the transfer of any Rights
to an Acquiring Person (or any Associate or Affiliate thereof) or to
any nominee of such Acquiring Person, Associate or Affiliate. Any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person (or any Associate or Affiliate thereof) shall be canceled.
(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 Right Certificate surrendered for such exercise
and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof, and of the Rights evidenced thereby, as the Company
or the Rights Agent shall reasonably request.
(g) Notwithstanding anything in this Rights Agreement to the
contrary, no Right may be exercised (and any attempt to so exercise
shall be void and of no effect) if the Company determines (prior to the
issuance of the Preferred Stock or other securities or property
issuable upon exercise of such Right) that (i) (A) the Preferred Stock
or other securities or property issuable upon exercise of such Right,
or any interest therein or right thereof, would be owned or controlled
by one or more Aliens (as defined in the Restated Certificate of
Incorporation of the Company, as amended) and (B) after any such
exercise, Aliens would own or control an aggregate percentage of the
shares of capital stock of the Company or any interest therein or right
thereof in excess of the Permitted Percentage (as defined in the
Restated Certificate of Incorporation of the Company, as
11
amended) or (ii) that the exercise of such Right would otherwise cause
the Company not to be a citizen of the United States within the meaning
of the Shipping Act, 1916. The Board of Directors is hereby authorized
to take such action as it may deem necessary or desirable to fulfill
the purpose and implement the provisions set forth in the immediately
preceding sentence, including without limitation, requiring, as a
condition to exercise of any Right, representations and other proof as
to the identity of prospective stockholders and persons on whose behalf
shares of stock of the Company or any interest therein or right thereof
are to be held and as to whether or not such persons are Aliens.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to 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 Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares
of Preferred Stock, or any shares of Preferred Stock held in its
treasury, a number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding
Rights; provided, however, that the Company shall not be required to
reserve and keep available shares or other securities sufficient to
permit the exercise in full of all outstanding Rights pursuant to the
adjustments set forth in Section 11(a)(ii) or Section 13 hereof unless
the Rights become exercisable pursuant to such adjustments, and then
only to the extent the Rights become exercisable pursuant to such
adjustments.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, 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 quoted on
NASDAQ, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares reserved for
issuance upon exercise of the Rights to be listed on such exchange or
quoted on NASDAQ upon official notice of issuance.
(c) The Company shall use its best efforts to (i) prepare and
file, as soon as practicable following the first occurrence of a
Flip-In Event, a registration statement on an appropriate form under
the Securities Act with respect to the securities purchasable upon
exercise of the Rights, (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 meeting the requirements of the Securities Act) until the
earlier of (A) the date as of which the Rights are no longer
exercisable for such securities,
12
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
exercise of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 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 a registration statement and
permit it to become effective. In addition, if the Company shall
determine that the Securities Act requires an effective registration
statement under the Securities Act following the Distribution Date, the
Company may temporarily suspend the exercisability of the Rights until
such time as such a registration statement has been declared 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. Promptly following the issuance of
any such public announcement, the Company shall provide the Rights
Agent with a copy thereof. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted
under applicable law or any required registration statement shall not
have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred
Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates therefor (subject to
payment of the Purchase Price in respect thereof), 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 Transfer Tax which may be payable with respect
to the issuance, delivery, redemption (as provided in Section 23
hereof) or exchange (as provided in Section 24 hereof) of the Right
Certificates and of any certificates for a number of one one-hundredth
of a share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any Transfer Tax which may be payable in
respect of any transfer or delivery of a Right Certificate to a person
other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise, redemption or exchange or to issue or to
deliver any certificates or depositary receipts for Preferred Stock (or
Common Stock and/or other securities, as the case may be) upon the
exercise of any Rights until any such Transfer Tax shall have been paid
(any such Transfer Tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established
to the Company's and the Rights Agent's satisfaction that no such
Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
(fractional or otherwise) of Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
13
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable Transfer Taxes) was made; provided, however, that, if the
date of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares (fractional or otherwise) of Preferred
Stock on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate,
as such, shall not be entitled to any rights of a holder of shares of Preferred
Stock 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 and
Number of Rights. The Purchase Price, the number and kind of shares or other
securities subject to purchase upon the exercise of 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 shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide or
split the outstanding Preferred Stock into a greater number of
shares of Preferred Stock, (C) combine the outstanding shares
of Preferred Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of
the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price
in effect at the time of the record date for such dividend or
the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital
stock issuable upon exercise of a Right on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate
number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at
a time when the Preferred Stock transfer books of the Company
were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that the
consideration to be paid upon the exercise of one Right shall
not be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Sections 23(a) and 24 of this Rights
Agreement and except as otherwise provided in this Section 11,
if any Person shall become an Acquiring Person (the first
occurrence of such event being referred to herein as a
14
"Flip-In Event"), unless the event causing such Person to
become an Acquiring Person is (1) a transaction set forth in
Section 13(a) hereof or (2) an acquisition of shares of Common
Stock pursuant to a Permitted Offer, then, promptly following
the occurrence of such event, (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior
to the Flip-In Event multiplied by the number of one
one-hundredth of a share of Preferred Stock for which a Right
was exercisable immediately prior to such Flip-In Event,
whether or not such Right was then exercisable, and (B) each
holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive upon exercise
thereof at a price equal to the then current Purchase Price
(as so adjusted), in accordance with the terms of this Rights
Agreement and in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result obtained by
dividing the Purchase Price (as so adjusted) by 50% of the
Current Market Price per share of Common Stock on the date
such Person became an Acquiring Person (such number of shares
being referred to herein as the "Adjustment Shares");
provided, however, that the Purchase Price (as so adjusted)
and the number of Adjustment Shares so receivable upon
exercise of a Right shall following the date such Person
became an Acquiring Person be subject to further adjustment as
appropriate in accordance with Section 11(f) of this Rights
Agreement to reflect any events occurring after the date of
such first occurrence.
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon exercise of Rights in
accordance with the foregoing subparagraph (ii) of this
Section 11(a) such number or fractions of shares of Preferred
Stock having an aggregate current market value equal to the
Current Market Price per share of Common Stock. If the number
of shares of Common Stock that are authorized by the Company's
Restated Certificate of Incorporation, as amended, but not
outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii)of this Section 11(a), the Company
shall, to the extent permitted by applicable law and
regulation and material agreements then in effect to which the
Company is a party, (A) determine the excess of (1) the value
of the Adjustment Shares issuable upon the exercise of a
Right, computed using the Current Market Price used to
determine the number of Adjustment Shares (the "Current
Value"), over (2) the Purchase Price, as adjusted in
accordance with the foregoing subparagraph (ii) (such excess
is herein referred to as the "Spread"), and (B) with respect
to each Right (other than Rights which have become null and
void under this Agreement), make adequate provision to
substitute for the Adjustment Shares, upon the exercise of the
Rights and payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) shares of Preferred
Stock or other equity securities of the Company, including,
without limitation, shares or fractions of shares, or units of
shares, of preferred stock that the Board of Directors of the
Company has determined to have the same value as shares of
Common Stock (such shares of preferred stock and shares or
fractions of shares of preferred stock are herein referred to
as "Share Equivalents"), (4) debt securities of the Company,
(5) other
15
assets or (6) any combination of the foregoing, having a value
which when added to the value of the shares of Common Stock
actually issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value (less the amount of
any reduction in such Purchase Price), where such aggregate
value has been determined by the Board of Directors of the
Company based upon the advice of a nationally or industry
recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, that 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 Flip-In 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 "Flip-In Trigger Date"), then
the Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements then
in effect to which the Company is a party, 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, such number or fractions of
shares of Preferred Stock (to the extent available) and then,
if necessary, cash, which shares of Preferred Stock and/or
cash have an aggregate value equal to the Spread. If, upon the
occurrence of a Flip-in Event, the Board of Directors of the
Company shall determine 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 Flip-In
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 needs
to be taken pursuant to the second and/or third 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 to seek any authorization of additional
shares and/or to decide the appropriate form of distribution
to be made pursuant to such second 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 a share of Common Stock shall
be the Current Market Price per share of the Common Stock on
the Flip-In Trigger Date and the value of any Share Equivalent
shall be deemed to have the same value as the Common Stock on
such date. The Board of Directors of the Company may, but
shall not be required to, establish procedures to allocate the
right to receive Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock or shares having the
same rights, privileges and preferences as the Preferred Stock
16
("equivalent preferred shares") or securities convertible into
Preferred Stock or equivalent preferred shares at a price per share of
Preferred Stock or equivalent preferred shares (or having a conversion
price per share, if a security convertible into shares of Preferred
Stock or equivalent preferred shares) less than the Current Market
Price per share of the Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of shares of Preferred Stock and equivalent preferred
shares outstanding on such record date plus the number of shares of
Preferred Stock and equivalent preferred shares which the aggregate
offering price of the total number of shares of Preferred Stock and/or
equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Preferred Stock
and equivalent preferred shares outstanding on such record date plus
the number of additional shares of Preferred Stock and/or equivalent
preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible); provided, however, that the consideration to be paid upon
the exercise of one Right shall not be less than the aggregate par
value of the shares of capital stock of the Company issuable upon
exercise of one Right. If such subscription price may be paid in the
form of consideration part or all of which shall 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. Shares of Preferred Stock and equivalent preferred shares 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 if
such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness, cash or other assets (other than a regular quarterly cash
dividend not in excess of 150% of the next previous regular quarterly
cash dividend or a dividend payable in Preferred 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 per share of Preferred 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
one share of Preferred Stock and the denominator of which shall be such
Current Market Price per share of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right. Such adjustment shall be made
17
successively whenever such a record date is fixed; and if such
distribution is not so made, the Purchase Price shall again be adjusted
to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) For the purpose of any computation hereunder, the "Current
Market Price" per share of any security (in this Section 11(d), a
"Security") on any date shall be determined as provided in this Section
11(d). In the case of a publicly traded stock or other security, the
Current Market Price on any date shall be deemed to be the average of
the daily Closing Prices per share of such Security for the 30
consecutive Trading Days immediately prior to such date; provided,
however, that if the Current Market Price per share of the Security is
determined during a period following the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares or (B) any subdivision, combination, consolidation, or
reclassification of such Security and prior to the expiration of 30
Trading Days 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 appropriately adjusted to take into account ex-dividend
trading. For the purpose of any computation hereunder, if the Preferred
Stock is not publicly traded but the shares of Common Stock are
publicly traded, the "Current Market Price" per share of the Preferred
Stock shall be conclusively deemed to be the Current Market Price per
share of Common Stock multiplied by 100 (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof). If the Security is not publicly held
or not so listed or traded (or in the case of Preferred Stock, if
neither the Preferred Stock nor the Common Stock are publicly 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) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% of the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Preferred Stock or
Common Stock or any other share or security, 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 which
requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the Purchase Price and the number of such
other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (h), (i)
and (m), as applicable, and the provisions of
18
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-hundredth of a share of Preferred Stock purchasable from time to
time hereunder upon exercise of the Rights, each 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 calculation made in Section 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredth of a share of
Preferred Stock (calculated to the nearest one ten-thousandth of a
share of Preferred Stock) obtained by (i) multiplying (x) the number of
one one-hundredth of a share of Preferred Stock 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
substitution for any adjustment in the number of one one-hundredth of a
share of Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-hundredth of a share of
Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to
the nearest one ten-thousandth) obtained by dividing the Purchase Price
in effect 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 (and shall promptly
provide a copy thereof to the Rights Agent) of its election to adjust
the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the
public announcement. If the Right 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 Right Certificates on such record date Right
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 Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders
of record of Right Certificates on the record date specified in the
public announcement.
19
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredth of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price and the number of one one-hundredth of a share of Preferred Stock
which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
number of one one-hundredth of a share of Preferred Stock or of the
number of shares of Common Stock or other securities issuable upon
exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable
one one-hundredth of a share of Preferred Stock or other such number of
shares of Common Stock or other securities at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer (with prompt
written notice thereof to the Rights Agent) until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date of the shares of Preferred Stock, cash and other capital
stock or securities of the Company, if any, issuable upon such exercise
over and above the shares of Preferred Stock, cash 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) of Preferred
Stock, Common Stock or other capital stock 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 it in its sole
discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance
wholly for cash of any shares of Preferred Stock at less than the
Current Market Price, (iii) issuance wholly for cash of Preferred Stock
or securities which by their terms are convertible into or exchangeable
for Preferred Stock, (iv) dividends on Preferred Stock payable in
shares of Preferred Stock or (v) issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to
such holders.
(n) The Company covenants and agrees that it shall not, at any
time after the earlier of the Distribution Date or the Stock
Acquisition Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), (ii) 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 (iii) sell, lease or transfer (or permit one or more
Subsidiaries to sell, lease 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
20
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 (and all of which together comply) with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger,
sale, lease or transfer there are any rights, warrants or other
instruments or securities of the Company or any other Person
outstanding or agreements, arrangements or understandings in effect
that would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (y) prior to, simultaneously
with or immediately after such consolidation, merger, sale, lease or
transfer, the stockholders or other equity owners 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 or Associates,
or (z) the identity, form or nature of organization of the Principal
Party (including without limitation the selection of the Person that
will be the Principal Party as a result of the Company's entering into
one or more consolidations, mergers, sales, leases, transfers or
transactions with more than one party) would preclude or limit the
exercise of Rights or otherwise diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the earlier
of the Distribution Date or the Stock Acquisition Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or permit
any Subsidiary to take) any action if the purpose of such action is to,
or 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) Anything in this Rights Agreement to the contrary
notwithstanding, except as set forth in Section 31 hereof, if the
Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, (iii) combine the outstanding
shares of Common Stock into a smaller number of shares of Common Stock,
or (iv) issue any shares of its capital stock in a reclassification of
the outstanding shares of Common Stock, the number of Rights associated
with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction the numerator 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. Certification of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11, 13 or 23(c)
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief, reasonably detailed statement of the facts accounting
for and the computation of such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Preferred Stock and the Common Stock a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in
21
accordance with Section 26. Notwithstanding the foregoing sentence, the failure
of the Company to make such certification or give such notice shall not affect
the validity of or the force or effect of the requirement for such adjustment.
Any adjustment to be made pursuant to Sections 11, 13 or 23(c) of this Rights
Agreement shall be effective as of the date of the event giving rise to such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment or statement therein contained and shall have
no duty or liability with respect to, and shall not be deemed to have knowledge
of, any adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) If, on or after the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and
into, any other Person or Persons and the Company shall not be the
continuing or surviving corporation of such consolidation or merger,
(y) any Person or Persons 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 the Company or any other Person or cash or any other
property, or (z) the Company shall sell, lease or otherwise transfer
(or one or more of its Subsidiaries shall sell, lease 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 to the Company or any Subsidiary of
the Company (any event described in (x), (y) or (z) a "Flip-Over
Event")), then, and in such case, proper provision shall be made so
that (i) each holder of record of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon
the exercise thereof at the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) in accordance with the terms
of this Rights Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of shares of validly issued,
fully paid and nonassessable and freely tradeable shares of Common
Stock of the Principal Party (as defined herein), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims,
as shall be equal to the result obtained by dividing the Purchase Price
(as theretofore adjusted in accordance with Section 11(a)(ii) hereof)
by 50% of the Current Market Price per share of the Common Stock of
such Principal Party on the date of consummation of such Flip-Over
Event; provided, however, that the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) and the number of
shares of Common Stock of such Principal Party so receivable upon
exercise of each Right shall be further adjusted as provided in this
Agreement to reflect any events occurring after the date of the first
occurrence of a Flip-Over Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Flip-Over
Event, all the obligations and duties of the Company pursuant to this
Rights 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 Flip-Over Event; (iv) such
Principal Party shall take such steps (including, without limitation,
the reservation of a sufficient number of shares of its Common Stock)
in connection with the consummation of any
22
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; provided, however, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization, reclassification of
shares, reorganization or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the
Purchase Price, such cash, shares, rights, warrants and other property
which such holder would have been entitled to receive had it, at the
time of such transaction, owned the shares of Common Stock of the
Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, without limitation,
reservation of shares of its stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof
for such cash, shares, rights, warrants and other property and (v) the
provisions of Section 11(a) (ii) hereof shall be of no effect following
the first occurrence of any Flip-Over Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which shares
of Common Stock of the Company are converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer the outstanding Common Stock of which has the greatest
aggregate market value or (B) if no securities are so issued,
(x) the Person that survives such consolidation or is the
other party to the merger and survives such merger or, if
there is more than one such Person, the Person the Common
Stock of which has the greatest aggregate market value, (y) if
the Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger
(including the Company if it survives), or (z) the Person
resulting from the consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence in Section 13(a), the Person
that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power
cannot be determined, the Person the outstanding Common Stock
of which has the greatest aggregate market value;
provided however, that in any such case described in Section 13(b)(i)
or (b)(ii) above, if the Common Stock of such Person is not at such
time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act, and if (1) such
Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, the term "Principal
Party" shall refer to such other Person; (2) such Person is a
Subsidiary, directly or indirectly; of more than one Person, the Common
Stock of each of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the
issuer whose outstanding Common Stock has the greatest aggregate market
value; and (3) such Person is owned, directly or
23
indirectly, by a joint venture formed by two or more Persons that are
not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any Flip-Over Event
unless each Principal Party (or Person that may become a Principal
Party as a result of such Flip-Over Event) 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 each Principal Party involved therein shall have executed
and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger
or sale or transfer of assets or earning power, assume this Rights
Agreement in accordance with Sections 13(a) and (b) hereof, that the
requirements of Section 13(a) or (b) shall be promptly performed in
accordance with these terms, that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock
of the Principal Party upon exercise of outstanding Rights have been
waived and that such Flip-Over Event shall not result in a default by
the Principal Party under this Rights Agreement, and further providing
that, as soon as practicable after the date of such Flip-Over Event,
the Principal Party at its own expense will:
(i) prepare and file a registration statement under
the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the "blue sky" laws of such jurisdictions as may
be necessary or appropriate;
(iii) use its best efforts, if the shares of Common
Stock of the Principal Party is or shall become listed on a
national securities exchange, to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of
the Rights on such securities exchange and, if the shares of
Common Stock of the Principal Party shall not be listed on a
national securities exchange, to cause the Rights and the
securities purchasable upon exercise of the Rights to be
reported by NASDAQ or such other transaction reporting system
then in use; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the
Exchange Act.
24
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If a Flip-Over Event shall occur at
any time after the occurrence of a Flip-In Event, the Rights that have not
theretofore been exercised shall, subject to the provisions of Section 7(e)
hereof, thereafter be exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Rights Agreement to the
contrary, Section 13 shall not be applicable to a transaction described
in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction
is consummated with a Person or Persons (or a wholly owned subsidiary
of any such Person or Persons) who acquired shares of Common Stock of
the Company pursuant to a Permitted Offer, (ii) the price per share of
Common Stock offered in such transaction is not less than the price per
share of Common Stock paid to all holders of shares of Common Stock
whose shares were purchased pursuant to such Permitted 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 to holders of shares of Common Stock
pursuant to such Permitted Offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
(e) If the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate or Articles of
Incorporation or bylaws or other instrument governing its corporate
affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of,
the consummation of a transaction referred to in this Section 13,
Common Stock of such Principal Party at less than the then Current
Market Price per share or securities exercisable for, or convertible
into, Common Stock of such Principal Party at less than such then
Current Market Price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar
provisions in connection with the issuance of the shares of Common
Stock of such Principal Party pursuant to the provisions of this
Section 13, then, in such event, the Company shall not consummate any
such transaction unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
(f) The Company covenants and agrees that it shall not, at any
time after the occurrence of a Flip-In Event, enter into any
transaction that would constitute a Flip-Over Event if (i) at the time
of or immediately after such Flip-Over Event there are any rights,
warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Flip-Over Event, the
stockholders 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 or Associates or (iii) the form or nature of
organization of the Principal Party would preclude or limit the
exercisability of the Rights.
25
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right 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 Price of a whole Right. For
the purposes of this Section 14(a), the then-Current Market Price of a
Right shall be the Closing Price of the Rights for the Trading Day
immediately prior to the date on which fractional Rights would have
been issuable, determined in the same manner as the Current Market
Price of a share of Common Stock shall be determined pursuant to
Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock, Common Stock, or other securities of the
Company upon exercise of the Rights (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock)
or to distribute certificates which evidence interests in fractional
shares (other than fractions of shares which are integral multiples of
one one-hundredth of a share of Preferred Stock); provided, however,
that in lieu of issuing fractions of shares of Preferred Stock, the
Company may, at its election, issue depositary receipts evidencing
fractions of shares pursuant to an appropriate agreement between the
Company and a depositary selected by it, but only if such agreement
shall provide that the holders of such depositary receipts shall have
all of the rights, privileges and preferences to which they would be
entitled as beneficial owners of the Preferred Stock. With respect to
fractional shares that are not integral multiples of one one-hundredth
of a share of Preferred Stock, if the Company does not issue such
fractional shares or depositary receipts in lieu thereof, there shall
be paid to the holders of record of Right Certificates at the time such
Right Certificates are exercised as herein provided an amount in cash
equal to the same fraction of the then Current Market Price of a share
of Preferred Stock or other securities of the Company. For purposes of
this Section 14(b), the then Current Market Price of a share of
Preferred Stock or other securities of the Company shall be the closing
price thereof for the Trading Day immediately prior to the date of such
exercise, as determined pursuant to Section 11(d) hereof.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Current
Market Price of one share of Common Stock. For purposes of this Section
14(c), the Current Market Price 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.
(d) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any
fractional shares of Preferred Stock, Common Stock or other securities
of the Company upon exercise of a Right, except as provided by this
Section 14.
26
(e) Whenever a payment for fractional Rights or fractional
shares is made by the Rights Agent, the Company shall (i) promptly
prepare and deliver to the Rights Agent a certificate setting forth in
reasonable detail the facts related to such payments and the prices
and/or formulas used in calculating such payments and (ii) provide
sufficient monies to the Rights Agent in the form of fully collected
funds to make such payments. The Rights Agent shall be fully protected
in relying upon such a certificate and shall have no duty with respect
to, and shall not be deemed to have knowledge of, any payment for
fractional Rights or fractional shares under any section of this
Agreement relating to the payment of fractional Rights or fractional
shares until the Rights Agent shall have received such certificate and
sufficient monies.
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent
hereunder, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock in their capacity as holders of Rights); and any registered holder
of any Right Certificate (or, prior to the Distribution Date, any holder of
record of the Common Stock, in its capacity as a holder of Rights), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, any holder of record of Common Stock in its
capacity as a holder of Rights), may, in 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 Right Certificate (or, prior to the Distribution
Date, evidenced by such Common Stock) in the manner provided therein and in this
Rights 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 by the Company of
this Rights Agreement and, accordingly, that they will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations by the Company of, the obligations of any Person subject
to this Rights Agreement.
Section 16. Agreement of Right Holders. Each 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 shall be
evidenced by the certificates for shares of Common Stock registered in
the name of the holders of the shares of Common Stock and not by
separate Right Certificates, and each Right shall be transferable only
simultaneously and together with the transfer of the shares of Common
Stock;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if
surrendered at the designated office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by
anyone other than the
27
Company or the Rights Agent or the transfer agent of the Common Stock)
for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
(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,
judgment, decree or ruling (whether interlocutory or final) issued by a
court or by a governmental, regulatory, self-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, that the Company must act in a
commercially reasonable manner to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock, Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the preparation,
negotiation, administration, delivery, execution and amendment of this
Rights 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, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense, including
without limitation the reasonable fees and expenses of legal counsel
(collectively, a "Loss"), incurred without gross negligence, bad faith
or willful misconduct on the part of the Rights Agent (each as
determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction), for any action taken, suffered
or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this
Rights Agreement, including without limitation the costs and expenses
of defending against and appealing any claim of liability arising
therefrom, directly or indirectly. The costs and expenses incurred in
enforcing this right of indemnification shall be paid by the Company,
unless it is determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction that the Rights
Agent acted with gross negligence, bad faith or willful misconduct in
incurring a Loss. The provisions of this
28
Section 18 and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation
or removal of the Rights Agent.
(b) The Rights Agent shall be authorized and 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 Rights Agreement and the exercise and
performance of its duties hereunder in reliance upon any Right
Certificate or certificate for shares of Preferred Stock or Common
Stock, or certificate for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, guaranteed, verified or acknowledged, by
the proper Person or Persons or otherwise upon the advice of counsel as
set forth in Section 20 hereof.
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
Person succeeding to the stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent
under this Rights 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 Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. If at
the time such successor Rights Agent shall succeed to the agency
created by this Rights Agreement any of the Right 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 Right Certificates so countersigned; and if at that
time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver such Right
Certificates so countersigned; in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its
changed name; in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights
Agreement.
Section 20. Rights and Duties of Rights Agent. The Rights Agent
undertakes only the duties and obligations expressly imposed by this Rights
Agreement (and no implied duties or obligations) upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
29
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company or an employee of the Rights Agent),
and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action taken,
suffered or omitted by it in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Rights 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, or suffering or
omitting to take, any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted by
it under the provisions of this Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever
(including without limitation lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any
liability of the Rights Agent under this Rights Agreement will be
limited to the amount of fees paid by the Company to the Rights Agent.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any liability for, or
any responsibility in respect of, the validity of this Rights Agreement
or the execution and delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required
under the provisions of Sections 11, 13, 23 or 24 hereof or responsible
for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to, the exercise of Rights evidenced by
Right Certificates after receipt of actual written notice that such
change or adjustment is required); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any shares of Preferred Stock or Common Stock to be
issued pursuant to this Rights
30
Agreement or any Right Certificate or as to whether any shares of
Preferred Stock or Common Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Secretary or the Treasurer of
the Company, and to apply to such officers for advice or instructions
in connection with its duties, and such instructions shall be full
authorization and protection to the Rights Agent and the Rights Agent
shall not be liable for or in respect of any action taken, suffered or
omitted to be taken by it in accordance with instructions of any such
officer or any delay in acting while waiting for such instructions. The
Rights Agent is hereby authorized to rely on the most recent
instructions received from any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee or other Affiliate of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not the Rights Agent under
this Rights Agreement. Nothing herein shall preclude the Rights Agent
or any such stockholder, director, officer or employee or other
Affiliate 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 (through its directors, officers or employees) or by or
through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, omission,
default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction)
in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice
31
in writing mailed to the Company and to each transfer agent of the Preferred
Stock and the Common Stock by registered or certified mail and to the holders,
if any, of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent (with or without cause) 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 Preferred Stock and 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. Notwithstanding the foregoing provisions of this
Section 21, the resignation or removal of a Rights Agent shall not be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within a period
of 30 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
incumbent Rights Agent or the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a Person organized and doing business under the laws of the
United States or of any state of the United States, in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination in the conduct of its corporate
trust or stock transfer business by federal or state authorities and which has
at the time of its appointment as Rights Agent a combined capital and surplus of
at least $50,000,000 or (b) an Affiliate of a Person described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall be vested
with 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 Preferred Stock and the Common Stock, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 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.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Company shall have the authority to act
as the Rights Agent until a successor Rights Agent shall have assumed the duties
of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right 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 of
stock or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Rights Agreement.
32
Section 23. Redemption and Termination.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, at any time prior to the earlier of
(i) the Close of Business on the tenth Business Day following the Close
of Business on the Stock Acquisition Date, subject to extension by the
Company as provided in Section 27 hereof or (ii) the Close of Business
on the Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.001 per Right, subject to
adjustments as provided in subsection (c) below (the "Redemption
Price"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section
11(a)(ii) prior to the expiration of the Company's right of redemption
hereunder.
(b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the redemption of the Rights
(which action may be conditioned on the occurrence of one or more
events or on the existence of one or more facts or may be effective at
some future time), evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice,
the right to exercise the Rights will terminate, and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly after the effectiveness of the
action of the Board of Directors ordering the redemption of the Rights,
the Company shall give notice of such redemption (with prompt written
notice thereof to the Rights Agent) to the holders of the then
outstanding Rights by mailing such notice to each such holder at its
last address as such appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each notice of redemption will state the effective
time of the redemption, the method by which the payment of the
Redemption Price will be made and the time for such payment. The
failure to give notice required by this Section 23(b) or any defect
therein shall not affect the legality or validity of the action taken
by the Company. At the option of the Board of Directors, the Redemption
Price may be paid in cash to each Rights holder or by the issuance of
shares of Common Stock (and, at the Company's election pursuant to
Section 14(b) hereof, cash or depositary receipts in lieu of fractions
of shares) having a Current Market Price equal to such cash payment.
(c) If the Company shall at any time after the Record Date (A)
pay any dividend on its Common Stock in shares of its Common Stock, (B)
subdivide or split the outstanding shares of its Common Stock into a
greater number of shares or (C) combine or consolidate the outstanding
shares of its Common Stock into a smaller number of shares of its
Common Stock or effect a reverse split of the outstanding shares of its
Common Stock, then and in such event the Redemption Price shall, except
as set forth in Section 31 hereof, be appropriately adjusted to reflect
such event.
Section 24. Exchange.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, at any time and from time to time
after the first occurrence of a Flip-In Event, exchange all or part of
the then outstanding and exercisable Rights (which
33
shall not include Rights that have become null and void pursuant to the
provisions of Section 7(e) hereof) for shares of its Common Stock at an
exchange ratio of one share of its 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 an Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the
Company's Common Stock then outstanding.
(b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights
pursuant to and in accordance with subsection (a) of this Section 24
(which action may be conditioned upon the occurrence of one or more
events or on the existence of one or more facts or may be effective at
some time in the future) 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 the Company's 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 for exchange will state the
method by which the exchange of the shares of the Company's 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 null and void pursuant to the
provisions of Sections 7(e) hereof) held by each holder of Rights.
(c) If the number of shares of Common Stock which are
authorized by the Company's Restated Certificate of Incorporation (as
then restated or amended), but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights is not sufficient
to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of its Common Stock for
issuance upon exchange of the Rights.
(d) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute shares of Preferred Stock (or equivalent
preferred shares, for shares of Common Stock exchangeable for Rights,
at the initial rate of one one-hundredth of a share of Preferred Stock
(or equivalent preferred shares) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Stock pursuant to the terms thereof, so that the fraction
of a share of Preferred Stock delivered in lieu of each share of Common
Stock shall have the same voting rights as one share of Common Stock.
(e) The Company shall not be required to issue fractions of
shares of Common Stock (or pursuant to Section 24(d) fractional shares
of Preferred Stock (in
34
other than integral multiples of one one-hundredth of a share)), or to
distribute certificates which evidence fractional shares of Common
Stock (or nonintegral multiples of one one-hundredth of a share of
Preferred Stock). In lieu thereof, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock (or nonintegral multiples of one
one-hundredth of a share of Preferred Stock) would otherwise be
issuable an amount in cash equal to the same fraction of the Current
Market Price of a whole share of Common Stock or Preferred Stock. For
the purposes of this Section 24(e), the applicable Current Market Price
of a whole share of Common Stock or Preferred Stock shall be determined
pursuant to Section 11(d) hereof for the Trading Day immediately prior
to the effective date of exchange pursuant to Section 24(b) hereof.
Section 25. Notice of Certain Events.
(a) If the Company shall propose, at any time after the
earlier of the Distribution Date or the Stock Acquisition Date, (i) to
effect any of the transactions referred to in Section 11(a) (i) hereof
or to pay any dividend to the holders of record of its Preferred Stock
payable in stock of any class or to make any other distribution to the
holders of record of its Preferred Stock (other than a regular
quarterly cash dividend), (ii) to offer to the holders of record of its
Preferred Stock, options, warrants or other rights to subscribe for or
to purchase (including any security convertible into or exchangeable
for Preferred Stock) any shares of Preferred Stock or shares of stock
of any class or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred
Stock), or (iv) to effect any consolidation or merger with or into, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50 % of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person or
Persons, or (v) to effect the liquidation, dissolution or winding up of
the Company, or (vi) to declare or pay any dividend on the shares of
Common Stock payable in shares of Common Stock or to effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in shares of
Common Stock), then, in each such case, the Company shall give to the
Rights Agent and each holder of record of a Right Certificate, in
accordance with Section 26, a notice of such proposed action, which
shall specify the record date for the purposes of such dividend or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, lease, transfer,
liquidation, dissolution, or winding up is to take place and the record
date for determining participation therein by the holders of record of
the Common Stock and/or Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of record of the Preferred 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 record of
the Common Stock and/or Preferred Stock, whichever shall be the
earlier. The failure to give notice required by this Section 25 or any
defect
35
therein shall not affect the legality or validity of the action taken
by the Company or the vote upon any such action.
(b) In case any Flip-In Event shall occur, then, (i) the
Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) or by facsimile transmission as
follows:
▇▇▇▇▇▇▇▇ Offshore Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
600 Town Center One
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of record
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) or by facsimile transmission as
follows:
36
Mellon Investor Services LLC
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Client Service Manager
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Mellon Investor Services LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right (or, if prior to the Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. For as long as the Rights are
then redeemable and except as otherwise provided below in this Section 27, the
Company may in its sole and absolute discretion and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of the Rights or the shares of
Common Stock. At any time when the Rights are not then redeemable and except as
otherwise provided below in this Section 27, the Company may and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (a) to cure
any ambiguity, (b) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (c) to
shorten or lengthen any time period hereunder or (d) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and that shall not materially adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of any Acquiring Person); provided, however, that this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (c) 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 (other than any
Acquiring Person and its Affiliates and Associates). Upon the delivery of a
certificate from an appropriate officer of the Company and, if requested by the
Rights Agent, an opinion of counsel which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment, provided, however, that the Rights
Agent may, but shall not be obligated to, execute any supplement or amendment
that affects the Rights Agent's rights, duties, obligations or immunities under
this Agreement. Notwithstanding anything contained in this Rights Agreement to
the contrary, (a) no supplement or amendment shall be made which decreases the
Redemption Price or shortens the Final Expiration Date and (b) the
37
Rights Agent may, but shall not be obligated to, enter into any supplement or
amendment that affects the Rights Agent's own rights, duties, obligations or
immunities under this Agreement.
Section 28. Successors. All of the covenants and provisions of this
Rights 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 Rights Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including without
limitation 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
hereof. The Board of Directors of the Company (or, as set forth herein, certain
specified members thereof) shall have the exclusive power and authority to
administer this Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors of the Company or to the Company,
or as may be necessary or advisable in the administration of this Rights
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Rights Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Rights Agreement as provided in Section 27 above). 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 of Directors of the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights. The Rights
Agent shall be entitled to rely, and fully protected in such reliance, on the
assumption that the Board of Directors has acted in good faith in connection
with any determination or action by the Board of Directors hereunder.
Section 30. Benefits of this Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of the shares of
Common Stock) any legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
shares of Common Stock in their capacity as holders of Rights).
Section 31. Adjustments to Rights Upon Occurrence of Initial Public
Offering. Notwithstanding anything in this Agreement to the contrary, if the
Company shall, in connection with an initial underwritten public offering of its
Common Stock, (i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, (iii) combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock, (iv) issue any shares of its capital
stock in a reclassification of the outstanding shares of Common Stock, or (v)
otherwise act with respect to its securities as set forth in Section 11 above,
the Company shall be entitled, for so long as the Rights are then redeemable, to
make such adjustments to the terms of the Rights in substitution
38
for and satisfaction of the adjustments provided in Section 11 and Section 23 as
and to the extent that it in its sole discretion shall determine to be
advisable.
Section 32. Severability. If any term, provision, covenant or
restriction of this Rights 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 Rights
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 Rights 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
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 of the Company. Without limiting the
foregoing, if any provision requiring that a determination be made by less than
the entire Board of Directors of the Company is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall then be made by the entire Board of Directors of the
Company.
Section 33. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of
Texas and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State; provided,
however, that all provisions regarding the rights, duties, obligations and
immunities of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
Section 34. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 35. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
39
IN WITNESS WHEREOF, the parties hereto have cause this Rights Agreement
to be duly executed, all as of the day and year first above written.
▇▇▇▇▇▇▇▇ OFFSHORE SERVICES,
INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer
MELLON INVESTOR SERVICES LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Title: Vice President
------------------------------
40
EXHIBIT A
DESIGNATION OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF
▇▇▇▇▇▇▇▇ OFFSHORE SERVICES, INC.
Pursuant to Section 151
of the Delaware General Corporation Law
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors of the Company by its Restated Certificate of Incorporation, as
amended, and by the provisions of Section 151 of the Delaware General
Corporation Law a series of preferred stock be and it hereby is established, in
the number and having the designation, preferences, terms, qualifications,
limitations, restrictions and relative rights, including voting rights, set
forth below:
(a) Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting such
series shall be one million (1,000,000).
(b) Dividends and Distributions.
(i) Subject to the provisions for adjustment
hereinafter set forth, the holders of shares of Series A
Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per
share (rounded to the nearest cent) equal to 100 times the
aggregate per share amount of all cash dividends declared or
paid on the Common Stock, $0.01 par value per share, of the
Company (the "Common Stock") and (ii) a preferential cash
dividend (the "Preferential Dividends"), if any, on the first
day of April, July, October and January of each year (each a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in
an amount equal to $1.00 per share of Series A Preferred Stock
less the per share amount of all cash dividends declared on
the Series A Preferred Stock pursuant to clause (i) of this
sentence since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. If the
Company shall, at any time after the issuance of any share or
fraction of a share of Series A Preferred Stock, make any
distribution on the shares of Common Stock of the Company,
whether by way of a dividend or a reclassification of stock, a
recapitalization, reorganization or partial liquidation of the
Company or otherwise, which is payable in cash or any debt
security, debt instrument, real or personal property or any
other property (other than cash dividends subject to the
immediately preceding sentence, a distribution of shares of
Common Stock or other capital stock of the Company or a
distribution of rights or warrants to acquire any such share,
including any debt security convertible into or exchangeable
for any such
share, at a price less than the Fair Market Value of such
share), then and in each such event the Company shall
simultaneously pay on each then outstanding share of Series A
Preferred Stock of the Company a distribution, in like kind,
of 100 times such distribution paid on a share of Common Stock
(subject to the provisions for adjustment hereinafter set
forth). The dividends and distributions on the Series A
Preferred Stock to which holders thereof are entitled pursuant
to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are
hereinafter referred to as "Participating Dividends" and the
multiple of such cash and non-cash dividends on the Common
Stock applicable to the determination of the Participating
Dividends, which shall be 100 initially but shall be adjusted
from time to time as hereinafter provided, is hereinafter
referred to as the "Dividend Multiple". If the Company shall
at any time after June 18, 2003 declare or pay any dividend or
make any distribution on Common Stock payable in shares of
Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of
shares of Common Stock, then in each such case the Dividend
Multiple thereafter applicable to the determination of the
amount of Participating Dividends which holders of shares of
Series A Preferred Stock shall be entitled to receive shall be
the Dividend Multiple applicable immediately before such event
multiplied by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately before such
event.
(ii) The Company shall declare each Participating
Dividend at the same time it declares any cash or non-cash
dividend or distribution on the Common Stock in respect of
which a Participating Dividend is required to be paid. No cash
or non-cash dividend or distribution on the Common Stock in
respect of which a Participating Dividend is required to be
paid shall be paid or set aside for payment on the Common
Stock unless a Participating Dividend in respect of such
dividend or distribution on the Common Stock shall be
simultaneously paid, or set aside for payment, on the Series A
Preferred Stock.
(iii) Preferential Dividends shall begin to accrue on
outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issuance of any shares of Series A Preferred Stock. Accrued
but undeclared or unpaid Preferential Dividends shall cumulate
but shall not bear interest. Preferential Dividends paid on
the shares of Series A Preferred Stock in an amount less than
the total amount of such dividends at the time accrued,
declared and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the
time outstanding.
(c) Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(i) Subject to the provisions for adjustment
hereinafter set forth, each share of Series A Preferred Stock
shall entitle the holder thereof to 100 votes on
all matters submitted to a vote of the stockholders of the
Company. The number of votes which a holder of Series A
Preferred Stock is entitled to cast, as the same may be
adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple". If the Company
shall at any time after June 18, 2003 declare or pay any
dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or split or a combination, consolidation
or reverse split of the outstanding shares of Common Stock
into a greater or lesser number of shares of Common Stock,
then in each such case the Vote Multiple thereafter applicable
to the determination of the number of votes per share to which
holders of shares of Series A Preferred Stock shall be
entitled after such event shall be the Vote Multiple
immediately before such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately before such event.
(ii) Except as otherwise provided by law or in this
Designation, the Restated Certificate of Incorporation, as
amended, or the Second Restated Bylaws, as amended, of the
Company, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of stockholders
of the Company.
(iii) If the Preferential Dividends accrued on the
Series A Preferred Stock for four or more quarterly dividend
periods, whether consecutive or not, shall not have been
declared and paid or set apart for payment, the holders of
record of Preferred Stock of the Company of all series
(including the Series A Preferred Stock), other than any
series in respect of which such right is expressly withheld by
the Restated Articles of Incorporation, as amended, or the
authorizing resolutions included in the certificate of
designation therefor, shall have the right, at the next
meeting of stockholders called for the election of directors,
to elect two members to the Board of Directors, which
directors shall be in addition to the number required by the
Bylaws before such event, to serve until the next Annual
Meeting and until their successors are elected and qualified
or their earlier resignation, removal or incapacity or until
such earlier time as all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series A Preferred
Stock shall have been paid (or set aside for payment) in full.
The holders of shares of Series A Preferred Stock shall
continue to have the right to elect directors as provided by
the immediately preceding sentence until all accrued and
unpaid Preferential Dividends upon the outstanding shares of
Series A Preferred Stock shall have been paid (or set aside
for payment) in full. Such directors may be removed and
replaced by such stockholders, and vacancies in such
directorships may be filled only by such stockholders (or by
the remaining director elected by such stockholders, if there
be one) in the manner permitted by law; provided, however,
that any such action by stockholders shall be taken at a
meeting of stockholders and shall not be taken by written
consent thereto.
(iv) Except as otherwise set forth herein or required
by law, the Restated Certificate of Incorporation, as amended,
or the Second Restated
Bylaws, as amended, of the Company, holders of Series A
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for the taking of any corporate action.
(d) Certain Restrictions.
(i) Whenever Preferential Dividends or Participating
Dividends are in arrears, whether or not declared, or the
Company shall be in default of payment thereof, thereafter and
until all accrued and unpaid Preferential Dividends and
Participating Dividends, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid or
set aside for payment in full, and in addition to any and all
other rights which any holder of shares of Series A Preferred
Stock may have in such circumstances, the Company shall not:
(1) declare or pay dividends on, make any
other distributions on, or redeem or purchase or
otherwise acquire for consideration, any shares of
stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series
A Preferred Stock;
(2) declare or pay dividends on or make any
other distributions on any shares of stock ranking on
a parity as to dividends with the Series A Preferred
Stock, unless dividends are paid ratably on the
Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in
proportion to the total amounts to which the holders
of all such shares are then entitled if the full
dividends accrued thereon were to be paid;
(3) except as permitted by subparagraph (iv)
of this paragraph 4(A), redeem or purchase or
otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided, however, that the
Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange
for shares of any stock of the Company ranking junior
(both as to dividends and upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock; or
(4) purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock,
or any shares of stock ranking on a parity with the
Series A Preferred Stock (either as to dividends or
upon liquidation, dissolution or winding up), except
in accordance with a purchase offer made to all
holders of such shares upon such terms as the Board
of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes,
shall determine in good faith will result in fair and
equitable treatment among the respective series or
classes.
(ii) The Company shall not permit any
Subsidiary (as hereinafter defined) of the Company to
purchase or otherwise acquire for consideration any
shares of stock of the Company unless the Company
could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such
time and in such manner. A "Subsidiary" of the
Company shall mean any corporation or other entity of
which securities or other ownership interests having
ordinary voting power sufficient to elect a majority
of the Board of Directors or other persons performing
similar functions are beneficially owned, directly or
indirectly, by the Company or by any corporation or
other entity that is otherwise controlled by the
Company.
(iii) The Company shall not issue any shares
of Series A Preferred Stock except upon exercise of
Rights issued pursuant to that certain Rights
Agreement dated as of June 18, 2003 between the
Company and Mellon Investor Services LLC as Rights
Agent, a copy of which is on file with the Secretary
of the Company at its principal executive office and
shall be made available to stockholders of record
without charge upon written request therefor
addressed to said Secretary. Notwithstanding the
foregoing sentence, nothing contained in the
provisions hereof shall prohibit or restrict the
Company from issuing for any purpose any series of
Preferred Stock with rights and privileges similar
to, different from or greater than those of the
Series A Preferred Stock.
(e) Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Company
in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares upon
their retirement and cancellation shall become authorized but
unissued shares of Preferred Stock, without designation as to
series, and such shares may be reissued as part of a new
series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors.
(f) Liquidation, Dissolution or Winding Up. Upon any
voluntary or involuntary liquidation, dissolution or winding
up of the Company, no distribution shall be made (i) to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock unless the holders of shares of
Series A Preferred Stock shall have received, subject to
adjustment as hereinafter provided, (A) $100.00 per share plus
an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, or (B) if greater than the amount specified in
clause (i)(A) of this sentence, an amount equal to 100 times
the aggregate amount to be distributed per share to holders of
Common Stock, as the same may be adjusted as hereinafter
provided, and (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A
Preferred Stock, unless simultaneously therewith distributions
are made ratably on the Series A Preferred Stock and all other
shares of such parity stock in proportion to the total amounts
to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the
holders of such parity shares are entitled, in each case upon
such liquidation, dissolution or winding up. The amount to
which holders of Series A Preferred Stock may be entitled upon
liquidation, dissolution or winding up of the Company pursuant
to clause (i)(B) of the foregoing sentence is
hereinafter referred to as the "Participating Liquidation
Amount" and the multiple of the amount to be distributed to
holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant
to said clause to the determination of the Participating
Liquidation Amount, as said multiple may be adjusted from time
to time as hereinafter provided, is hereinafter referred to as
the "Liquidation Multiple". If the Company shall at any time
after June 18, 2003 declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a
subdivision or split or a combination, consolidation or
reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then in
each such case the Liquidation Multiple thereafter applicable
to the determination of the Participating Liquidation Amount
to which holders of Series A Preferred Stock shall be entitled
after such event shall be the Liquidation Multiple applicable
immediately before such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately before such event.
(g) Certain Reclassifications and Other Events.
(i) If holders of shares of Common Stock of
the Company receive after June 18, 2003 in respect of
their shares of Common Stock any share of capital
stock of the Company (other than any share of Common
Stock of the Company), whether by way of
reclassification, recapitalization, reorganization,
dividend or other distribution or otherwise (a
"Transaction"), then and in each such event the
dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Company
of the shares of Series A Preferred Stock shall be
adjusted so that after such event the holders of
Series A Preferred Stock shall be entitled, in
respect of each share of Series A Preferred Stock
held, in addition to such rights in respect thereof
to which such holder was entitled immediately before
such adjustment, to (i) such additional dividends as
equal the Dividend Multiple in effect immediately
before such Transaction multiplied by the additional
dividends which the holder of a share of Common Stock
shall be entitled to receive by virtue of the receipt
in the Transaction of such capital stock, (ii) such
additional voting rights as equal the Vote Multiple
in effect immediately before such Transaction
multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled
to receive by virtue of the receipt in the
Transaction of such capital stock and (iii) such
additional distributions upon liquidation,
dissolution or winding up of the Company as equal the
Liquidation Multiple in effect immediately before
such Transaction multiplied by the additional amount
which the holder of a share of Common Stock shall be
entitled to receive upon liquidation, dissolution or
winding up of the Company by virtue of the receipt in
the Transaction of such capital stock, as the case
may be, all as provided by the terms of such capital
stock.
(ii) If holders of shares of Common Stock of
the Company receive after June 18, 2003 in respect of
their shares of Common Stock any right or warrant to
purchase Common Stock (including as such a right, for
all purposes of
this paragraph, any security convertible into or
exchangeable for Common Stock) at a purchase price
per share less than the Fair Market Value (as
hereinafter defined) of a share of Common Stock on
the date of issuance of such right or warrant, then
and in each such event the dividend rights, voting
rights and rights upon the liquidation, dissolution
or winding up of the Company of the shares of Series
A Preferred Stock shall each be adjusted so that
after such event the Dividend Multiple, the Vote
Multiple and the Liquidation Multiple shall each be
the product of the Dividend Multiple, the Vote
Multiple and the Liquidation Multiple, as the case
may be, in effect immediately before such event
multiplied by a fraction the numerator of which shall
be the number of shares of Common Stock outstanding
immediately before such issuance of rights or
warrants plus the maximum number of shares of Common
Stock which could be acquired upon exercise in full
of all such rights or warrants and the denominator of
which shall be the number of shares of Common Stock
outstanding immediately before such issuance of
rights or warrants plus the number of shares of
Common Stock which could be purchased, at the Fair
Market Value of the Common Stock at the time of such
issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or
warrants.
(iii) If holders of shares of Common Stock
of the Company receive after June 18, 2003 in respect
of their shares of Common Stock any right or warrant
to purchase capital stock of the Company (other than
shares of Common Stock), including as such a right,
for all purposes of this paragraph, any security
convertible into or exchangeable for capital stock of
the Company (other than Common Stock), at a purchase
price per share less than the Fair Market Value of
such shares of capital stock on the date of issuance
of such right or warrant, then and in each such event
the dividend rights, voting rights and rights upon
liquidation, dissolution or winding up of the Company
of the shares of Series A Preferred Stock shall each
be adjusted so that after such event each holder of a
share of Series A Preferred Stock shall be entitled,
in respect of each share of Series A Preferred Stock
held, in addition to such rights in respect thereof
to which such holder was entitled immediately before
such event, to receive (i) such additional dividends
as equal the Dividend Multiple in effect immediately
before such event multiplied, first, by the
additional dividends to which the holder of a share
of Common Stock shall be entitled upon exercise of
such right or warrant by virtue of the capital stock
which could be acquired upon such exercise and
multiplied again by the Discount Fraction (as
hereinafter defined) and (ii) such additional voting
rights as equal the Vote Multiple in effect
immediately before such event multiplied, first, by
the additional voting rights to which the holder of a
share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital
stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction and (iii)
such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the
Liquidation Multiple in effect immediately before
such event multiplied, first, by the additional
amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation,
dissolution or winding up of the Company upon
exercise of such right or warrant by virtue of the
capital stock which could
be acquired upon such exercise and multiplied again
by the Discount Fraction. For purposes of this
paragraph, the "Discount Fraction" shall be a
fraction the numerator of which shall be the
difference between the Fair Market Value of a share
of the capital stock subject to a right or warrant
distributed to holders of shares of Common Stock of
the Company as contemplated by this paragraph
immediately after the distribution thereof and the
purchase price per share for such share of capital
stock pursuant to such right or warrant and the
denominator of which shall be the Fair Market Value
of a share of such capital stock immediately after
the distribution of such right or warrant.
(iv) For purposes of this Section 7, the
"Fair Market Value" of a share of capital stock of
the Company (including a share of Common Stock) on
any date shall be deemed to be the average of the
daily closing price per share thereof over the thirty
consecutive Trading Days (as such term is hereinafter
defined) immediately before such date; provided,
however, that, if such Fair Market Value of any such
share of capital stock is determined during a period
which includes any date that is within thirty Trading
Days after (i) the ex-dividend date for a dividend or
distribution on stock payable in shares of such stock
or securities convertible into shares of such stock,
or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or
reclassification of such stock, then, and in each
such case, the Fair Market Value shall be
appropriately adjusted by the Board of Directors of
the Company to take into account ex-dividend or
post-effective date trading. The closing price 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
applicable transaction reporting system with respect
to securities listed or admitted to trading on the
New York Stock Exchange), or, if the shares are not
listed or admitted to trading on the New York Stock
Exchange, as reported in the applicable transaction
reporting system with respect to securities listed on
the principal national securities exchange on which
the shares are listed or admitted to trading or, if
the shares are not listed or admitted to trading on
any national securities exchange, the last quoted
price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter
market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System
("Nasdaq") or such other system then in use, or if on
any such date the shares 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 shares selected by the
Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the shares are listed or
admitted to trading is open for the transaction of
business or, if the shares are not listed or admitted
to trading on any national securities exchange, on
which the New York Stock Exchange or such other
national securities exchange as may be selected by
the Board of Directors of the Company is open. If the
shares are not publicly held or not so listed or
traded on any day within the period of thirty Trading
Days applicable to the determination of Fair Market
Value thereof as aforesaid, "Fair Market Value" shall
mean the fair market value thereof per share as
determined in good faith by the Board of
Directors of the Company. In either case referred to
in the foregoing sentence, the determination of Fair
Market Value shall be described in a statement filed
with the Secretary of the Company.
(h) Consolidation, Merger, etc. If the Company shall
enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any
other property, then in any such case each outstanding share
of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount
of stock, securities, cash and/or other property (payable in
like kind), as the case may be, for which or into which each
share of Common Stock is changed or exchanged multiplied by
the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately before such event.
(i) Effective Time of Adjustments.
(i) Adjustments to the Series A Preferred Stock
required by the provisions hereof shall be effective
as of the time at which the event requiring such
adjustments occurs.
(ii) The Company shall give prompt written notice
to each holder of a share of Series A Preferred Stock
of the effect of any adjustment to the voting rights,
dividend rights or rights upon liquidation,
dissolution or winding up of the Company of such
shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure
of the Company to give such notice shall not affect
the validity of or the force or effect of or the
requirement for such adjustment.
(j) No Redemption. The shares of Series A Preferred
Stock shall not be redeemable at the option of the Company or
any holder thereof. Notwithstanding the foregoing sentence of
this Section, the Company may acquire shares of Series A
Preferred Stock in any other manner permitted by law, the
provisions hereof and the Restated Certificate of
Incorporation, as amended, of the Company.
(k) Ranking. Unless otherwise provided in the
Restated Certificate of Incorporation, as amended, of the
Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the
Series A Preferred Stock shall rank junior to all other series
of the Company's preferred stock as to the payment of
dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.
(l) Amendment. Except as contemplated herein, the
provisions hereof and the Restated Articles of Incorporation,
as amended, of the Company shall not be amended in any manner
which would adversely affect the rights, privileges or powers
of the Series A Preferred Stock without, in addition to any
other vote of stockholders required by law, the affirmative
vote of the holders of two-thirds or more of the outstanding
shares of Series A Preferred Stock, voting together as a
single class.
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER JUNE 18, 2013 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY AT
$.001 PER RIGHT, AND TO EXCHANGE, ON THE TERMS SET FORTH OR REFERRED TO IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
RIGHT CERTIFICATE
▇▇▇▇▇▇▇▇ OFFSHORE SERVICES, INC.
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement
dated as of June 18, 2003, as the same may be supplemented or amended from time
to time (the "Rights Agreement") between ▇▇▇▇▇▇▇▇ Offshore Services, Inc., a
Delaware corporation (the "Company"), and Mellon Investor Services LLC, a
New Jersey limited liability company ("Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and before the close of business on June 18, 2013 at the
designated office of the Rights Agent, or its successors as Rights Agent, one
one-hundredth of a fully paid nonassessable share of the Company's Series A
Junior Participating Preferred Stock, par value $.01 per share (the "Preferred
Stock") at a purchase price of $75.00 per one one-hundredth of a share of
Preferred Stock (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase and related certificate
set forth on the reverse side hereof duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredth of a share of Preferred Stock which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events and, upon the
happening of certain events, securities other than shares of Preferred Stock, or
other property, may be acquired upon exercise of the Rights evidenced by this
Right Certificate, as provided by the Rights Agreement.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and may not be transferred to any person and the
holder of any such Right (including any purported transferee or subsequent
holder) shall not have any right to exercise or transfer any such Right.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and are
also available from the Company upon written request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder of record to purchase
a like aggregate number of one one-hundredth of a share of Preferred Stock as
the Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive, upon surrender
hereof, another Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.00l per Right (payable, at the election of the Company, in
cash or in shares of the Company's common stock, $.01 par value per share
("Common Stock")) or (ii) may be exchanged in whole or in part for shares of
Common Stock or for shares of Preferred Stock.
No fractional shares of Preferred Stock are required to be issued upon
the exercise or redemption of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock), and in lieu thereof the Company may cause depository receipts
to be issued and/or a cash payment may be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a 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 Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of
------------------.
▇▇▇▇▇▇▇▇ OFFSHORE SERVICES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ATTEST:
-------------------------------
Secretary
COUNTERSIGNED:
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED, __________________ hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
Attorney to transfer the within Rights on the books of the within-named Company,
with full power of substitution.
Dated: ____________________, _______.
-------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
1. this Right Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or an Associate thereof (as such terms are defined pursuant to the
Rights Agreement); and
2. after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined pursuant to the Rights
Agreement) or who is a direct or indirect transferee of an Acquiring Person or
of an Affiliate or Associate of an Acquiring Person.
Dated as of _____________________, _______.
------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
5
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
exercise the Rights represented by this Right
Certificate.)
To ▇▇▇▇▇▇▇▇ Offshore Services, Inc.:
The undersigned hereby irrevocably elects to exercise ___________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of such Rights and requests that certificates
for such share(s) of Preferred Stock (or such other securities) be issued in the
name:
_______________________________________________________________________________
(Please insert social security or other identifying number)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
_______________________________________________________________________________
(Please insert social security or other identifying number)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: __________________, ______.
----------------------------
Signature
6
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature to the foregoing Form of Election must correspond to the
name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
7
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT
(DEFINED BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE
NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
▇▇▇▇▇▇▇▇ OFFSHORE SERVICES, INC.
SUMMARY OF RIGHTS TO PURCHASE STOCK
On June 18, 2003, the Board of Directors of ▇▇▇▇▇▇▇▇ Offshore Services,
Inc. (the "Company") declared a dividend on each outstanding share of common
stock, $.01 par value per share (the "Common Stock") of one right to purchase
(individually a "Right" and collectively the "Rights") Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred Stock").
The dividend is payable as of June 18, 2003 (the "Record Date"), to stockholders
of record on that date. Each Right will, upon the occurrence of events,
described below, that make it exercisable, entitle the registered holder to
purchase from the Company one one-hundredth of one share of the Preferred Stock
at a price of $75.00 (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (as
amended from time to time, the "Rights Agreement") between the Company and
Mellon Investor Services LLC as the rights agent (the "Rights Agent").
Initially, the Rights will be represented by all certificates
representing outstanding shares of Common Stock and no separate certificates for
the Rights will be distributed.
The Rights will separate from the Common Stock on the Distribution
Date, which is defined in the Rights Agreement as the earlier of (i) the tenth
business day following the date of a public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 10% or more of the Company's Common Stock (the date of
the announcement of such acquisition being the "Stock Acquisition Date") or (ii)
the tenth business day (or such later date as may be determined by the Board of
Directors before the Distribution Date occurs) after the commencement or public
announcement of a tender or exchange offer that would, if consummated, result in
a person or group becoming an Acquiring Person, whether any purchases actually
occur pursuant to such offer or not. The definition of Acquiring Person under
the Rights Agreement excludes (A) the Company, (B) any subsidiary of the
Company, (C) any employee benefit plan or employee stock plan of the Company or
of any subsidiary of the Company or any person organized, appointed, established
or holding Common Stock for or pursuant to the terms of any such plan, or (D)
any person whose ownership of 10% or more of the Common Stock then outstanding
results solely from (i) being a beneficial owner of 10% or more of the Common
Stock at the effective date of the Rights Agreement or as a result of
participation in the 2003 private offering by the Company of up to 9,000,000
shares of Common Stock at a price per share of $5.00, (ii) any action or
transaction approved by the Board of Directors before such person acquires such
10% beneficial ownership or (iii) a reduction in the number of issued and
outstanding shares of Common Stock pursuant to a transaction or transactions
approved by the Board of Directors. Any person excluded from becoming an
Acquiring Person by reason of subclause (i), (ii) or (iii) above will
nevertheless become an Acquiring Person if it acquires any additional shares of
Common Stock (including as a result of the exercise of any applicable preemptive
rights), unless upon consummation of the acquisition of additional shares of
Common Stock such person does not (1) own 10% or more of the Common Stock then
outstanding or (2) own a greater percentage of the Common Stock outstanding
following the later of such acquisition or the consummation of the offering
pursuant to which such acquisition was made than such person owned before such
acquisition for any reason other than a rounding of the shares acquired to the
nearest whole number that would avoid odd lots of fewer than 100 shares.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be represented by and transferred with, and only with, the shares of
Common Stock. Until the Distribution Date or earlier redemption, exchange,
expiration or termination of the Rights, new certificates representing shares of
Common Stock issued after the Record Date will contain a legend incorporating
the Rights Agreement by reference and the surrender for transfer of any
certificates representing shares of Common Stock outstanding as of the Record
Date, with or without a copy of this Summary of Rights, will constitute the
transfer of the Rights associated with the shares of Common Stock represented by
such certificate. The Rights will separate from the Common Stock upon the
occurrence of the Distribution Date, and as soon as practicable following the
Distribution Date, separate certificates evidencing the Rights will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date. From and after the Distribution Date, such separate
certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on June 17, 2013 unless earlier redeemed or
exchanged by the Company or unless they are terminated, in each case as
described below.
The Purchase Price payable and the number of shares of Preferred Stock
or other securities, including without limitation Common Stock, or property
issuable upon exercise of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Stock, (ii) upon the grant to
holders of shares of the Preferred Stock of certain rights or warrants to
subscribe for or purchase Preferred Stock or securities convertible into
Preferred Stock at less than the Current Market Price (as such term is defined
in the Rights Agreement) or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights is also subject to certain adjustments
from time to time in the event of, among other things, a stock split of the
Common Stock or a stock dividend on the Common Stock payable in shares of Common
Stock, or subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, before the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled, when, as and
if declared, to a minimum preferential quarterly dividend payment of $1.00 per
share but will also be entitled to an aggregate dividend of 100 times the
dividend declared per share of Common Stock. In the event of liquidation, the
holders of the Preferred Stock will be entitled to a minimum preferential
liquidation payment of $100.00 per share (plus any accrued but unpaid dividends)
but will be
2
entitled to an aggregate payment of 100 times the payment made per share of
Common Stock. Each share of Preferred Stock will have 100 votes, voting together
with the Common Stock. Finally, in the event of any merger, consolidation or
other transaction in which shares of Common Stock are converted or exchanged,
each share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
If a person becomes an Acquiring Person (a "Flip-In Event") in a manner
other than pursuant to a tender or exchange offer for all outstanding shares of
Common Stock at a price and on terms that a majority of the members of the Board
of Directors determines to be fair to and in the best interests of the Company
and its stockholders (a "Permitted Offer"), each holder of a Right who is not an
Acquiring Person or related thereto as specified in the Rights Agreement will,
if the Rights are not earlier redeemed, thereafter have the right to receive,
upon exercise of such Right and payment of the Purchase Price, one one-hundredth
of a share of Preferred Stock (or, in certain circumstances, Common Stock, cash,
property or other securities).
If, at any time on or after a Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction (in which any
shares of Common Stock are changed into or exchanged for other securities or
assets) other than certain mergers that follow a Permitted Offer or (ii) 50% or
more of the assets or earning power of the Company and its subsidiaries (taken
as a whole) is sold or transferred in one or a series of related transactions
(each of the events described in (i) and (ii) above being a "Flip-Over Event"),
each holder of a Right (except Rights that have previously been voided) will
thereafter have the right to receive, upon exercise of such Right and payment of
the Purchase Price, that number of shares of common stock of the acquiring
company having a market value at the time of such transaction equal to two times
the Purchase Price.
Fractions of shares of Preferred Stock (other than integral multiples
of one one-hundredth of a share) which would otherwise be issued upon exercise
or redemption of the Rights may, at the election of the Company, be evidenced by
depositary receipts. The Rights Agreement also provides that the Company may pay
cash in lieu of fractional shares.
At any time on or before the close of business on the tenth business
day following a Stock Acquisition Date (or such later date as may be authorized
by the Board of Directors), the Company may redeem the Rights in whole, but not
in part, at a price of $.00l per Right (the "Redemption Price"), payable at the
election of the Company in cash or shares of Common Stock. Immediately upon the
action of the Board of Directors of the Company authorizing redemption of the
Rights and without any further action or notice, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
After the occurrence of a Flip-In Event and before a person becomes the
beneficial owner of 50% or more of the Common Stock then outstanding, the
Company may, if authorized by the Board of Directors, exchange the Rights (other
than Rights owned by an Acquiring Person or an affiliate or an associate of an
Acquiring Person, which will have become void), in whole or in
3
part, at an exchange ratio per Right of one share of Common Stock, and/or other
equity securities deemed to have the same value as one share of Common Stock,
subject to adjustment.
During any such time as the Rights are redeemable, the Company may
amend the Rights in any manner, including without limitation an amendment to
extend the time period during which the Rights may be redeemed, except that the
Company may not, during such time, amend the Rights to decrease the Redemption
Price or move forward the expiration date of the Rights. During any such time as
the Rights are not redeemable, the Company may amend the Rights Agreement (a) to
cure any ambiguity, defect, or inconsistency, (b) to make changes that do not
materially adversely affect the interests of holders of the Rights (excluding
the interests of any Acquiring Person), or (c) to shorten or lengthen any time
period under the Rights Agreement, except that the Company may not amend the
Rights Agreement to lengthen the time period governing redemption during any
such time as the rights are not redeemable.
Until a Right is exercised, the holder thereof, as such, will not have
any rights as a shareholder of the Company, including without limitation the
right to vote or to receive dividends.
Notwithstanding the foregoing description, the Company has reserved the
right in the Rights Agreement to make changes to any or all of the terms of the
Rights, if before the Distribution Date the Company consummates an underwritten
initial public offering of its Common Stock.
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 in this summary description herein by reference.
4