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EXHIBIT 1
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RIGHTS AGREEMENT
between
NEWFIELD EXPLORATION
and
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
as Rights Agent
Dated as of February 12, 1999
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TABLE OF CONTENTS
Section 1. Certain Definitions........................................................1
Section 2. Appointment of Rights Agent................................................6
Section 3. Issuance of Right Certificates.............................................6
Section 4. Form of Right Certificates.................................................8
Section 5. Execution, Authentication and Delivery.....................................9
Section 6. Registration, Registration of Transfer and Exchange........................9
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates..................10
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights.............11
Section 9. Cancellation and Destruction of Right Certificates........................12
Section 10. Reservation and Availability of Shares...................................12
Section 11. Record Date..............................................................12
Section 12. Adjustment of Purchase Price; Number of Shares or Number of Rights.......13
Section 13. Certificate of Adjusted Purchase Price or Number of Shares...............19
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.....19
Section 15. Fractional Rights and Fractional Shares..................................21
Section 16. Rights of Action.........................................................22
Section 17. Agreement of Right Holders...............................................23
Section 18. Right Certificate Holder Not Deemed a Stockholder........................23
Section 19. Concerning the Rights Agent..............................................24
Section 20. Duties of Rights Agent...................................................24
Section 21. Merger or Consolidation or Change of Name of Rights Agent................26
Section 22. Change of Rights Agent...................................................26
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Section 23. Issuance of New Right Certificates.......................................27
Section 24. Redemption...............................................................27
Section 25. Mandatory Redemption and Exchange........................................28
Section 26. Notice of Certain Events.................................................29
Section 27. Securities Laws Registrations............................................29
Section 28. Notices..................................................................30
Section 29. Supplements and Amendments...............................................30
Section 30. Successors...............................................................31
Section 31. Benefits of this Agreement...............................................31
Section 32. Severability.............................................................31
Section 33. Governing Law............................................................31
Section 34. Counterparts.............................................................31
Section 35. Descriptive Headings.....................................................32
Exhibits
Exhibit A - Certificate of Designation of Junior Participating Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of February 12, 1999 (this
"Agreement"), is by and between Newfield Exploration Company, a Delaware
corporation (the "Company"), and ChaseMellon Shareholder Services L.L.C., a New
Jersey limited liability company, as Rights Agent (the "Rights Agent").
WHEREAS, the Board, having determined its actions to be in the best
interests of the Company and its stockholders, has authorized the creation of
Rights, has authorized and directed the issuance to the holders of record of
Common Shares outstanding on February 22, 1999 of one Right with respect to each
Common Share outstanding on February 22, 1999, and has further authorized and
directed the issuance of one Right with respect to each Common Share that
becomes outstanding between February 22, 1999 and the earlier of the
Distribution Date, the Redemption Date and the Final Expiration Date; and
WHEREAS, the Board has authorized and directed that the terms and
conditions under which the Rights are to be distributed, including without
limitation those affecting the exercise thereof, the securities or other
property to be acquired thereby and the purchase price to be paid therefor,
shall be set forth in a written agreement between the Company and a rights agent
made for the benefit of the holders of the Rights to the extent so provided
therein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"ACQUIRING PERSON" means any Person who or that, together with
all Affiliates and Associates of such Person, is the Beneficial Owner
of 20% or more of the Voting Shares of the Company then outstanding,
but shall not include (a) the Company, (b) any Subsidiary of the
Company or (c) any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Voting Shares for or
pursuant to any such plan. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of an acquisition of
Voting Shares by the Company that, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Voting Shares of the Company
then outstanding; provided, however, that, if a Person shall become the
Beneficial Owner of 20% or more of the Voting Shares of the Company
then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company and at a time when such
Person is the Beneficial Owner of 20% or more of the Voting Shares of
the Company then outstanding, become the Beneficial Owner of any
additional Voting Shares of the Company, then such Person shall be
deemed to be an "Acquiring Person." Notwithstanding the foregoing, if
the Board determines in good faith that a Person who would otherwise be
an "Acquiring Person," as defined pursuant to the foregoing provisions
of this definition, has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares
so that such Person would no longer be an "Acquiring Person," as
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pursuant to the foregoing provisions of this definition, then such
Person shall not be deemed to be an "Acquiring Person" for any purposes
of this Agreement.
"AGREEMENT" means this Rights Agreement as hereafter amended
from time to time.
"AFFILIATE" and "ASSOCIATE" have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
A Person shall be deemed the "BENEFICIAL OWNER" of and shall
be deemed to "OWN BENEFICIALLY" any securities that (without
duplication):
(a) such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, within
the meaning of either Section 13 or 16 of the Exchange Act;
(b) such Person or any of such Person's Affiliates or
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; or (ii) the right to vote
pursuant to any agreement, arrangement or understanding; or
(c) are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting or disposing of any
securities of the Company; provided, however, that, for
purposes of each clause of this definition, a Person shall not
be deemed the Beneficial Owner of, or to own beneficially,
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; provided, further, that,
for purposes of each clause of this definition, a Person shall
not be deemed the Beneficial Owner of, or to own beneficially,
any security as a result of any agreement, arrangement or
understanding to vote such security if such agreement,
arrangement or understanding (i) arises solely from a
revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (ii) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); and provided, further, that
notwithstanding anything to the foregoing to the contrary, a
Person engaged in the business of underwriting securities
shall not be deemed the "Beneficial Owner" of,
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or to "own beneficially," any securities acquired in good
faith in a firm commitment underwriting until the expiration
of 40 days after the date of such acquisition.
Notwithstanding anything in this definition to the contrary,
the phrase "THEN OUTSTANDING," when used with reference to a Person's
Beneficial Ownership of securities of the Company (or to the number of
such securities "beneficially owned"), means the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding that such Person
would be deemed to own beneficially hereunder.
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
a day on which banking institutions in the State of Texas or the state
in which the Corporate Office is located are authorized or obligated by
law or executive order to close.
"CLOSE OF BUSINESS" on any given date means 5:00 P.M., Houston
time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Houston time, on the next
succeeding Business Day.
"CLOSING PRICE," with respect to any security, means the last
sale price, regular way, on a specific Trading Day or, in case no such
sale takes place on such Trading Day, the average of the closing bid
and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if such security is not then listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which such security is listed
or admitted to trading or, if such security is not then listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations
System or such other system then in use, or, if on any such Trading Day
such security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in such security selected by the Board. If such
security is not publicly held or so listed or traded, "Closing Price"
shall mean the fair value per unit of such security as determined in
good faith by the Board, whose determination shall be described and the
Closing Price set forth in a statement filed with the Rights Agent.
"COMMON SHARES" means shares of capital stock of the Company
that have no preference over any other class of stock with respect to
dividends or assets, that are not redeemable at the option of the
Company and with respect to which no sinking, purchase or similar fund
is provided and shall initially mean the shares of common stock, par
value $ 0.01 per share, of the Company.
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"COMPANY" means Newfield Exploration Company, a Delaware
corporation, and its successors.
"COMPANY ORDER" means a written request or order signed in the
name of the Company by its Chairman of the Board, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Rights Agent.
"CORPORATE OFFICE" means the office of the Rights Agent which,
in the case of ChaseMellon Shareholder Services L.L.C., shall, until
hereafter changed, be its office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"DISTRIBUTION DATE" means the earlier of (a) the tenth
Business Day after the Shares Acquisition Date and (b) the tenth
Business Day (or such later date as may be determined by action of the
Board prior to such time as any Person becomes an Acquiring Person)
after the date of commencement by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any entity holding Voting
Shares for or pursuant to the terms of any such plan) of, or after the
date of the first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any
entity holding Voting Shares for or pursuant to the terms of any such
plan) to commence, a tender or exchange offer the consummation of which
would result in any Person becoming an Acquiring Person; provided,
however, that an occurrence described in clause (b) of this definition
shall not cause the occurrence of the Distribution Date if the Board
determines, prior to such tenth Business Day (or such later date as
described in clause (b) of this definition), that such tender or
exchange offer is spurious, unless, thereafter, the Board shall make a
contrary determination, in which event the Distribution Date shall
occur on the later to occur of such tenth Business Day (or such later
date as described in clause (b) of this definition) and the date of
such latter determination.
"EQUITY SHARES," if used with reference to a corporation,
means the capital stock (or equity interest) with the greatest voting
power of such Person or, if such Person is a Subsidiary of another
Person, the Person or Persons that ultimately control such
first-mentioned Person and, if used with reference to any Person other
than a corporation, means the equity interest in such Person (or, if
the net worth determined in accordance with generally accepted
accounting principles of another Person (other than an individual) that
controls such first-mentioned Person is greater than such
first-mentioned Person, then such other Person) with the greatest
voting power or managerial power with respect to the business and
affairs of such Person.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any successor statute thereto.
"FINAL EXPIRATION DATE" means the Close of Business on
February 22, 2009.
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"PERSON" means any individual, firm, corporation, partnership,
limited partnership, limited liability company, trust or other entity,
and shall include any successor (by merger or otherwise) of such
entity.
"PREFERRED SHARES" means shares of Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the
rights and preferences set forth in the form of Certificate of
Designation of Junior Participating Preferred Stock attached hereto as
Exhibit A.
"PRINCIPAL PARTY" has the meaning specified in Section 14(b).
"PURCHASE PRICE" means the price at which the holder of a
Right may, subject to the terms and conditions of this Agreement,
purchase one one-thousandth (1/1000) of a Preferred Share (which,
initially, is as set forth in Section 8(b) hereof), as such price shall
be adjusted pursuant to the terms of this Agreement.
"REDEMPTION DATE" means the time at which the Rights are
redeemed pursuant to Section 24 hereof or the time at which all of the
Rights are mandatorily redeemed and exchanged pursuant to Section 25
hereof.
"REDEMPTION PRICE" has the meaning specified in Section 24(b)
hereof.
"RIGHT" means one preferred share purchase right which
initially represents the right of the registered holder thereof to
purchase one one-thousandth (1/1000) of a Preferred Share upon the
terms and subject to the conditions herein set forth.
"RIGHT CERTIFICATE" means a certificate, in substantially the
form of Exhibit B attached to this Agreement, evidencing the Rights
registered in the name of the holder thereof.
"RIGHTS AGENT" means ChaseMellon Shareholder Services L.L.C.,
a New Jersey limited liability company, and any successor thereto
appointed in accordance with the terms hereof, in its capacity as agent
for the Company and the holders of the Rights pursuant to this
Agreement.
"RIGHTS REGISTER" and "RIGHTS REGISTRAR" have the meanings
specified in Section 6.
"SHARES ACQUISITION DATE" means the first date of public
announcement (which for purposes of this definition shall include
without limitation a report filed pursuant to Section 13(d) or Section
16(a) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
"SUBSIDIARY" of any Person means any corporation or other
entity of which a majority of the outstanding capital stock or other
equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
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"SUMMARY OF RIGHTS" means a Summary of Rights to Purchase
Preferred Shares in substantially the form attached as Exhibit C to
this Agreement.
"TRADING DAY" means a day on which the principal national
securities exchange or quotation system on which any of the Voting
Shares of the Company are listed, admitted to trading or quoted is open
for the transaction of business or, if none of the Voting Shares of the
Company are listed, admitted to trading or quoted on any national stock
exchange or quotation system, a Business Day.
"VOTING SHARES" means (i) the Common Shares and (ii) any other
shares of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common
Shares in respect of any merger or consolidation of the Company, any
sale of all or substantially all of the Company's assets or any
liquidation, dissolution or winding up of the Company. Whenever any
provision of this Agreement requires a determination of whether a
number of Voting Shares comprising a specified percentage of such
Voting Shares is, was or will be beneficially owned or has been voted,
tendered, acquired, sold or otherwise disposed of or a determination of
whether a Person has offered or proposed to acquire a number of Voting
Shares comprising such specified percentage, the number of Voting
Shares comprising such specified percentage of Voting Shares shall,
subject to the provisions set forth in the definition of "Beneficial
Owner," in every such case be deemed to be the number of Voting Shares
comprising the specified percentage of all the Company's then
outstanding Voting Shares.
"WHOLLY OWNED SUBSIDIARY" of a Person means any corporation or
other entity all the outstanding capital stock or other equity
interests of which having ordinary voting power in the election of
directors or similar officials (other than directors' qualifying shares
or similar interests) are owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. 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.
Section 3. Issuance of Right Certificates.
(a) From and after February 22, 1999 until the Distribution
Date, (i) outstanding Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
outstanding Common Shares and not by separate Right Certificates, and
(ii) the right to receive Right Certificates will be transferable only
in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date and the receipt by the Rights
Agent of all necessary information, the Rights Agent will send, by
first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution Date, at
the address of such holder shown on the stock transfer records of the
Company, a Right Certificate evidencing one Right for each Common Share
so held. From and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
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(b) On February 23, 1999, or as soon thereafter as
practicable, the Company will send a copy of a Summary of Rights, by
first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on February 22, 1999, at the address
of such holder shown on the stock transfer records of the Company. With
respect to Common Shares outstanding on February 22, 1999, the
certificates evidencing such Common Shares shall, together with copies
of such Summary of Rights, thereafter also evidence the outstanding
Rights (as such Rights may be amended or supplemented) distributed with
respect thereto until the earlier of the Distribution Date or the date
of surrender thereof to the Company's transfer agent for registration
of transfer or exchange of Common Shares. Until the Distribution Date
(or, if earlier, the Redemption Date or Final Expiration Date), the
surrender for registration of transfer or exchange of any certificate
for Common Shares outstanding as of the Close of Business on February
22, 1999 with or without a copy of the Summary of Rights attached
thereto, shall also constitute the surrender for registration of
transfer or exchange of the outstanding Rights associated with the
Common Shares represented thereby.
(c) The Company agrees that, at any time after February 22,
1999 and prior to the Distribution Date (or, if earlier, the Redemption
Date or Final Expiration Date) at which it issues any Common Shares
upon original issue or out of treasury, it will concurrently distribute
to the holder of such Common Shares one Right for each such Common
Share, which Right shall be subject to the terms and provisions of this
Agreement and will evidence the right to purchase the same number of
one one-thousandths of a Preferred Share at the same Purchase Price as
the Rights then outstanding.
(d) Certificates for Common Shares issued after February 22,
1999 but prior to the earliest of the Distribution Date, the Redemption
Date and the Final Expiration Date, whether upon registration of
transfer or exchange of Common Shares outstanding on February 22, 1999
or upon original issue or out of treasury thereafter, shall have
impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Newfield Exploration Company and ChaseMellon Shareholder
Services L.L.C., dated as of February 12, 1999 (the "Rights
Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
executive offices of Newfield Exploration Company. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. Newfield
Exploration Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. As described in
the Rights Agreement, Rights issued to or acquired by any
Acquiring Person or any Affiliate or Associate thereof (each
as defined in the Rights Agreement) shall, under certain
circumstances, become null and void.
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With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such
certificates alone, and the surrender of any such certificate for
registration of transfer or exchange of the Common Shares evidenced
thereby shall also constitute surrender for registration of transfer or
exchange of outstanding Rights (as such Rights may be amended or
supplemented) associated with the Common Shares represented thereby.
(e) If the Company purchases or acquires any Common Shares
after February 22, 1999, but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares that are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares (or other securities) and of
assignment to be printed on the reverse thereof) shall in form and substance be
substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and which do not increase or
alter the duties or responsibilities of the Rights Agent and as are not
inconsistent with the provisions of this Agreement, as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Rights may from
time to time be listed or as may be necessary to conform to usage. Subject to
the provisions of Section 23 hereof, the Right Certificates, whenever issued,
shall be dated as of the date of authentication thereof, but, regardless of any
adjustments of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable (whether pursuant to this
Agreement or any future amendments or supplements to this Agreement), or both,
occurring after February 22, 1999 and prior to the date of such authentication,
such Right Certificates may, on their face, without invalidating or otherwise
affecting any such adjustment, expressly entitle the holders thereof to purchase
such number of Preferred Shares at the Purchase Price per one one-thousandth of
a Preferred Share as to which a Right would be exercisable if the Distribution
Date were February 22, 1999; no adjustment of the Purchase Price or the number
of Preferred Shares (or other securities) as to which a Right is exercisable, or
both, effected subsequent to the date of authentication of any Right Certificate
shall be invalidated or otherwise affected by the fact that such adjustment is
not expressly reflected on the face or in the provisions of such Right
Certificate.
Pending the preparation of definitive Right Certificates, the Company
may execute, and upon Company Order the Rights Agent shall authenticate and
send, by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution Date, temporary
Right Certificates that are printed, lithographed, typewritten, mimeographed or
otherwise produced substantially of the tenor of the definitive Right
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Right Certificates may determine, as evidenced by their execution
of such Right Certificates.
If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates,
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upon surrender of the temporary Right Certificates at the Corporate Office of
the Rights Agent, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Right Certificates, the Company shall execute and
the Rights Agent shall authenticate and deliver in exchange therefor one or more
definitive Right Certificates, evidencing a like number of Rights. Until so
exchanged, the temporary Right Certificates shall in all respects be entitled to
the same benefits under this Agreement as definitive Right Certificates.
Section 5. Execution, Authentication and Delivery. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these officers on the
Right Certificates may be manual or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Right Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature, and such
certificate upon any Right Certificate shall be conclusive evidence, and the
only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and the receipt by the Rights Agent of all
necessary information and prior to the earlier of the Redemption Date and the
Final Expiration Date, the Company shall cause to be kept at the Corporate
Office of the Rights Agent a Rights Register (a "Rights Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Right Certificates and of transfers of Rights.
The Rights Agent is hereby appointed the registrar and transfer agent (the
"Rights Registrar") for the purpose of registering Right Certificates and
transfers of Rights as herein provided and the Rights Agent agrees to maintain
such Rights Register in accordance with such regulations so long as it continues
to be designated as Rights Registrar hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right
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Certificates are so surrendered for exchange, the Company shall execute, and the
Rights Agent shall authenticate and deliver, the Right Certificates that the
holder making the exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or charge that may be imposed in connection with any
registration of transfer or exchange of Right Certificates, other than exchanges
not involving any transfer. The Rights Agent shall have no duty or obligation
under this Section unless and until it is satisfied that all such taxes and
charges have been paid.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates. If
any mutilated Right Certificate is surrendered to the Rights Agent, the Company
shall execute and the Rights Agent shall authenticate and deliver in exchange
therefor a new Right Certificate of like tenor, for a like number of Rights and
bearing a registration number not contemporaneously outstanding.
If there shall be delivered to the Company and the Rights Agent (a)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (b) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Rights Agent) connected therewith. The Rights Agent
shall have no duty or obligation under this Section unless and until it is
satisfied that all such taxes and charges have been paid.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Right Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent
at its Corporate Office, together with payment of the Purchase Price
for each one one-thousandth of a Preferred Share (or other securities)
as to which the Rights are exercised, at or prior to the earliest of
(i) the Close of Business on the Final Expiration Date, (ii) the time
on the Redemption Date such Rights are optionally redeemed as provided
in Section 24 hereof or (iii) the time at which such Rights are
mandatorily redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-thousandth of a
Preferred Share pursuant to the exercise of a Right shall initially be
$85.00, shall be subject to adjustment from time to time as provided in
Sections 12 and 14 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly and
properly executed, accompanied by payment of the Purchase Price for the
securities to be purchased and an amount equal to any applicable tax or
charge required to be paid by the holder of such Right Certificate in
accordance with Section 10 in cash, or by certified check or cashier's
check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or other securities) certificates for such number of
one one-thousandths of a Preferred Share (or other securities) as are
to be purchased and registered in such name or names as may be
designated by the registered holder of such Right Certificate or, if
appropriate, in the name of a depositary agent or its nominee, and the
Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, and (B) requisition from a depositary agent
appointed by the Company, if any, depositary receipts representing such
number of one one-thousandths of a Preferred Share as are to be
purchased and registered in such name or names as may be designated by
such holder (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent
with such depositary agent or its custodian), and the Company hereby
directs such depositary agent to comply with all such requests, (ii)
when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with
Section 15 hereof, (iii) promptly after receipt of such certificates or
depositary receipts registered in such name or names as may be
designated by such holder, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate and (iv)
when appropriate, after receipt, promptly deliver such cash to or upon
the order of such holder.
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(d) If the registered holder of the Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equal to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 15 hereof.
Section 9. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer or exchange
shall, if surrendered to the Company or to any of its other agents, be delivered
to the Rights Agent for such purpose and for cancellation or, if surrendered to
the Rights Agent for such purpose, shall be canceled by it. No Right
Certificates shall be authenticated in lieu of or in exchange for any Right
Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation, and the Rights Agent shall so cancel, any
other Right Certificate purchased or acquired by the Company. The Rights Agent
shall deliver all canceled Right Certificates to the Company.
Section 10. Reservation and Availability of Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 8;
provided, however, that the Company will not be required to reserve and keep
available Common Shares or Preferred Shares sufficient to permit the exercise in
full of all outstanding Rights pursuant to the adjustments set forth in Section
12(a)(ii) or Section 14 until such time as the Rights become exercisable
pursuant to such adjustments.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares or Common Shares issued
upon exercise of Rights will (subject to payment of the Purchase Price) be duly
authorized, validly issued, fully paid and nonassessable. The Company further
covenants and agrees that it will pay when due and payable any and all taxes and
charges that may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or depositary receipts therefor) or
Common Shares upon the exercise of Rights. The Company shall not, however, be
required to pay any tax or charge that may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares or Common Shares upon exercise of Rights evidenced by Right Certificates
in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for transfer or exercise or to issue or deliver
any certificates or depositary receipts for Preferred Shares or Common Shares
upon the exercise of any Rights until any such tax or charge shall have been
paid (any such tax or charge being payable by the holder of such Right
Certificate at the time of surrender thereof) or until it has been established
to the Company's satisfaction that no such tax or charge is due.
Section 11. Record Date. Each Person in whose name any certificate for
Preferred Shares or Common Shares is issued upon the exercise of, or upon
mandatory redemption and exchange of, Rights shall for all purposes be deemed to
have become the holder of record of the Preferred Shares or Common Shares
represented thereby on, and such certificate shall be dated, (a) in the case of
the exercise of Rights, the date upon which the Right Certificate evidencing
such Rights was duly
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surrendered and payment of the Purchase Price (and any applicable taxes or
charges) was made, or (b) in the case of the mandatory redemption and exchange
of Rights, the date of such mandatory redemption and exchange; provided,
however, that, if the date of such surrender and payment or mandatory redemption
and exchange is a date upon which the transfer books of the Company for its
Preferred Shares or Common Shares, as the case may be, are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which such
transfer books of the Company are open. Prior to the exercise of (or the
mandatory redemption and exchange of) the Rights evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares (or Common Shares) 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 12. Adjustment of Purchase Price; Number of Shares or Number of
Rights. The Purchase Price, the number and kind of shares of capital stock of
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a
dividend on the Preferred Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
12(a), the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised thereafter shall be entitled to receive, upon
payment of the Purchase Price for the number of one
one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such date, the aggregate
number and kind of shares of capital stock that, if such Right
had been duly exercised immediately prior to such date (at a
time when the Preferred Shares transfer books of the Company
were open), such holder would have acquired upon such exercise
and been entitled to receive upon payment or effectuation of
such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. If an event
occurs that would require an adjustment under both Section
12(a)(i) and Section 12(a)(ii), the adjustment provided for in
this Section 12(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section
12(a)(ii).
(ii) Subject to action of the Board pursuant to
Section 25 of this Agreement, if any Person shall become an
Acquiring Person, each other holder of a Right shall, from and
after the Close of Business on the tenth Business Day after
the
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Shares Acquisition Date, have a right to receive, upon
exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares as shall equal
the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share
market price of the Common Shares (determined pursuant to
Section 12(d)) on the date such Person became an Acquiring
Person. If any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take
any action that would eliminate or diminish the benefits
intended to be afforded by the Rights.
Notwithstanding any other provision of this
Agreement, from and after the time any Person becomes an
Acquiring Person, any Rights that are or were acquired or
beneficially owned by any such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null
and void and any holder of such Rights shall thereafter have
no right to exercise such Rights under any provision of this
Agreement. No Right Certificate shall be issued pursuant to
this Agreement that represents Rights beneficially owned by an
Acquiring Person whose Rights would be null and void pursuant
to the preceding sentence or by any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person whose Rights
would be null and void pursuant to the preceding sentence or
to any Associate or Affiliate thereof or to any nominee
(acting in its capacity as such) of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose
Rights would be null and void pursuant to the preceding
sentence or to any Associate or Affiliate thereof or to any
nominee (acting in its capacity as such) of such Acquiring
Person, Associate or Affiliate shall be canceled.
(iii) If on or after the Distribution Date there are
not sufficient Common Shares issued but not outstanding, or
authorized but unissued, to permit the exercise in full of all
outstanding Rights in accordance with the foregoing
subparagraph (ii), the Company agrees to take all such action
as is within its power, including without limitation
appropriate action by the Board, as may be necessary to amend
the Company's certificate of incorporation to authorize
additional Common Shares for issuance upon exercise of the
Rights. If, notwithstanding the foregoing, the stockholders do
not approve an amendment to the Company's certificate of
incorporation authorizing such additional Common Shares, the
adjustment prescribed in Section 12(a)(ii) shall not be made
but, in lieu thereof, each holder of a Right shall thereafter
have the right to receive, upon exercise thereof in accordance
with the terms of this Agreement, such number of one
one-thousandths of Preferred Shares as shall equal the result
obtained by (A) multiplying the then current Purchase Price by
the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable and dividing that product by
(B) 50% of the then current per share market
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price of one one-thousandth of a Preferred Share (determined
pursuant to Section 12(d)) on the date such Person became an
Acquiring Person.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities
convertible into or exchangeable for Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred
share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less
than the current per share market price of the Preferred Shares
(determined pursuant to Section 12(d) on such record date), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares that the aggregate offering price of the
total number of Preferred Shares and equivalent preferred shares so to
be offered (together with the aggregate of any additional consideration
required upon conversion or exchange in the case of any convertible or
exchangeable securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and equivalent preferred shares to be
offered for subscription or purchase (or into or for which the
convertible or exchangeable securities so to be offered are initially
convertible or exchangeable); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. In case all or part of
such subscription or purchase price may be paid in a form other than
cash, the value of such consideration shall be as determined in good
faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned by or
held for the account of the Company or any of its Subsidiaries shall
not be deemed outstanding for the purpose of any computation described
in this paragraph 12(b). The adjustment described in this paragraph
12(b) shall be made successively whenever such a record date is fixed;
and, if none of such rights, options or warrants is so issued, the
Purchase Price shall be adjusted to be the Purchase Price that would
then be in effect if such record date had not been fixed.
(c) If the Company fixes a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or
a dividend payable in Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 12(b)), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares (determined
pursuant to Section 12(d)) on such record date, less the fair market
value (as determined in good faith by the Board, whose determination
shall be
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described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and
the denominator of which shall be such current per share market price
of the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
to be issued upon the exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and, if such
distribution is not so made, the Purchase Price shall again be adjusted
to be the Purchase Price that would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of Common Shares on any date
shall be deemed to be the average of the daily Closing Prices
per share of such Common Shares for the 30 consecutive Trading
Days immediately prior to but not including such date;
provided, however, that, if the issuer of such Common Shares
shall announce (A) a dividend or distribution on such Common
Shares payable in such Common Shares or securities convertible
into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend
date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, shall occur
during such period of 30 Trading Days, then, and in each such
case, the current per share market price of the Common Shares
shall be appropriately adjusted to reflect the current market
price per Common Share equivalent.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
shall be determined in the same manner as set forth above for
Common Shares in subparagraph (i) of this Section 12(d). If
the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the
"current per share market price" of the Preferred Shares shall
be conclusively deemed to be the current per share market
price of the Common Shares (determined in the manner provided
above) multiplied by one thousand.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided; however, that any
adjustments, which by reason of this Section 12(e) are not required to
be made, shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 12 shall be
made to the nearest cent or to the nearest ten-millionth of a Preferred
Share or one ten-thousandth of any other share or security, as the case
may be, and references herein to the "number of one one-thousandths of
a Preferred Share" (or similar phrases) shall be construed to include
fractions of one one-thousandth of a Preferred Share. Notwithstanding
the first sentence of this Section 12(e), any adjustment required by
this Section 12 shall be made no later than the earlier of (i) three
years from the date of the transaction that requires such adjustment or
(ii) the thirtieth day preceding the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of
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the Company other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares
contained in this Section 12, and the provisions of this Agreement,
including without limitation Sections 8, 10, 11 and 14, with respect to
the Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall, whether or
not the Right Certificate evidencing such Rights reflects such adjusted
Purchase Price, evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price
pursuant to Section 12(b) or 12(c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price per one
one-thousandth of a Preferred Share, that number of one one-thousandths
of a Preferred Share obtained by (i) multiplying (A) the number of
one-thousandths of a share covered by a Right immediately prior to this
adjustment by (B) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights
outstanding in lieu of any adjustment in the number of one
one-thousandths of a Preferred Share purchasable upon the exercise of a
Right. Each Right outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to
such adjustment of the Purchase Price. Each Right held of record prior
to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made and shall promptly notify the
Rights Agent of such matters. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. Until such record date, however, any
adjustment in the number of one one-thousandths of a Preferred Share
for which a Right shall be exercisable made as required by this
Agreement shall remain in effect. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 12(i), the Company shall, as promptly as practicable, cause to
be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 15
hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in
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substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
authenticated in the manner provided for herein and shall be registered
in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price and the number of one one-thousandths of a Preferred Share that
were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the amount of
consideration per Preferred Share determined by the Board to be
capital, or below one one-thousandth of the par value, if any, per
Preferred Share issuable upon exercise of the Rights, the Company
agrees to take such corporate action as is within its power, including
without limitation appropriate action by the Board, and that is, in the
opinion of its counsel, necessary in order that the Company may validly
and legally issue fully paid and nonassessable one one-thousandths of
Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer, with prompt
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 Preferred Shares or other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the
Preferred Shares or other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due ▇▇▇▇ or other appropriate instrument
evidencing such holder's right to receive such additional securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 12 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 12, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
combination or subdivision of the Preferred Shares, issuance wholly for
cash of any of the Preferred Shares at less than the current per share
market price, issuance wholly for cash of Preferred Shares or
securities that by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred
Shares or issuance of rights, options or warrants referred to in
subsection (b) of this Section 12, hereafter effected by the Company to
holders of its Preferred Shares shall not be taxable to such
stockholders.
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(n) If at any time prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares payable in
Common Shares or (ii) effect a subdivision or combination of the Common
Shares (by reclassification or otherwise than by payment of dividends
in Common Shares) into a greater or lesser number of Common Shares,
then in any such case (i) the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision or combination shall be adjusted by multiplying such
Purchase Price by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding
immediately after such event, and (ii) the number of Rights outstanding
immediately after such event shall be adjusted, either through
cancellation of outstanding Rights or through distribution of
additional Rights (but without duplication of the Company's obligations
under Section 3(c)), so that the certificate evidencing each Common
Share outstanding immediately after such event shall also evidence the
associated Right to purchase the same number of one one-thousandths of
a Preferred Share as to which a Right would have entitled the holder
thereof to purchase immediately prior to such event. The adjustment
provided for in this Section 12(n) shall be made successively whenever
such a dividend is declared or paid or such a subdivision or
combination is effected. If an event occurs that would require an
adjustment under Section 12(a)(ii) and this Section 12(n), the
adjustments provided for in this Section 12(n) shall be in addition and
prior to any adjustment required pursuant to Section 12(a)(ii).
Section 13. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth a computation of
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Common Shares and the Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of record of a Right Certificate
in accordance with Section 28 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment set forth therein and
shall have no duty with respect to and shall not be deemed to have knowledge of
any adjustment unless and until it has received such certificate.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) If, directly or indirectly, at any time after a Person has
become an Acquiring Person (i) the Company shall consolidate with, or
merge with and into, any other Person, (ii) any Person shall merge with
and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with any such
merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property, or (iii) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or a series of two or more transactions,
assets of the Company or its Subsidiaries that constitute more than 50%
of the assets or that produce more than 50% of the earning power or
cash flow of the Company and its Subsidiaries (taken as a whole) to any
Person other than the Company or one or more of its Wholly Owned
Subsidiaries, then, and in each such case, the Company agrees that, as
a condition to engaging in any such transaction, it will make or cause
to be made proper provision so that (i) each holder of a Right (except
as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Equity Shares
of the Principal Party (as such term is hereinafter defined) as shall
be equal
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to the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable (without taking into account any
adjustment previously made pursuant to Section 12(a)(ii)) and dividing
that product by (B) 50% of the current per share market price of the
Equity Shares of the Principal Party (determined pursuant to Section
12(d)) on the date of consummation of such consolidation, merger, sale
or transfer; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company," as used herein, shall
thereafter be deemed to refer to such Principal Party; and (iv) such
Principal Party shall take such steps (including without limitation the
reservation of a sufficient number of shares of its Equity Shares in
accordance with Section 10) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Equity
Shares of the Principal Party thereafter deliverable upon the exercise
of the Rights. The Company shall not enter into any transaction of the
kind referred to in this Section 14 if at the time of such transaction
there are outstanding any rights, warrants, instruments or securities
or any agreement or arrangements that, as a result of the consummation
of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. The
Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent an agreement
supplemental to this Agreement complying with the provisions of this
Section 14. The provisions of this Section 14 shall similarly apply to
successive mergers or consolidations or sales or other transfers. For
the purposes of this Section 14, 50% of the assets of the Company and
its Subsidiaries shall be determined by reference to the book value of
such assets as set forth in the most recent consolidated balance sheet
of the Company and its Subsidiaries (which need not be audited) and 50%
of the earning power or cash flow of the Company and its Subsidiaries
shall be determined by reference to the mathematical average of the
operating income or cash flow, respectively, resulting from the
continuing operations of the Company and its Subsidiaries for the two
most recent full fiscal years as set forth in the consolidated and
consolidating financial statements of the Company and its Subsidiaries
for such years; provided, however, that, if the Company has, during
such period, engaged in one or more transactions to which purchase
accounting is applicable, such determination shall be made by reference
to the pro forma operating income of the Company and its Subsidiaries
giving effect to such transactions as if they had occurred at the
commencement of such two-year period.
(b) The term "Principal Party" shall mean: (i) in the case of
any transaction described in clause (i) or (ii) of the first sentence
of Section 14(a), the Person that is the issuer of any securities into
which Common Shares are converted in such merger or consolidation, and,
if no securities are so issued, the Person that is the other party to
such merger or consolidation; and (ii) in the case of any transaction
described in clause (iii) of the first sentence of Section 14(a), the
Person that is the party receiving the greatest portion of the assets
transferred pursuant to such transaction or transactions; provided,
however, that in any such case (A) if the Equity Shares of such Person
are not at such time and have not been continuously over the preceding
twelve months registered under Section 12 of the Exchange Act and such
Person is a direct or indirect subsidiary of another Person the Equity
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Shares of which are and have been so registered, the term "Principal
Party" shall refer to such other Person and (B) in case such Person is
a Subsidiary, directly or indirectly, of more than one Person, the
Equity Shares of two or more of which are and have been so registered,
the term "Principal Party" shall refer to whichever of such Persons is
the issuer of the Equity Shares having the greatest aggregate market
value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized Equity Shares that have not been issued
or reserved for issuance to permit the exercise in full of the Rights
in accordance with this Section 14 and unless prior thereto the Company
and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth
in subsections (a) and (b) of this Section 14 and further providing
that, as soon as practicable after the date of any consolidation,
merger, sale or transfer of assets referenced in the first sentence of
Section 14(a), the Principal Party shall: (i) prepare and file a
registration statement under the Securities Act with respect to the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, and shall use its best efforts to cause such
registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the Final
Expiration Date; and (ii) shall deliver to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration of a class of securities under the Exchange Act. The
provisions of this Section 14 shall similarly apply to successive
mergers, consolidations, sales or other transfers of assets. If an
event subject to this Section 14 shall occur at any time after the
occurrence of an event subject to Section 12(a)(ii), the Rights that
have not theretofore been exercised shall thereafter become exercisable
in the manner described in Section 14(a).
Section 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue or distribute
Right Certificates that evidence fractional Rights. If, on the
Distribution Date or thereafter, as a result of any adjustment effected
pursuant to Section 12(i) or otherwise hereunder, a Person would
otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to
be paid to such Person an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purpose of this
Section 15(a), the current market value of a whole Right shall be the
Closing Price of the Rights for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise
issuable.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of
one one-thousandth of a Preferred Share) upon exercise of the Rights or
to distribute certificates that evidence fractional Preferred Shares
(other than fractions that are integral multiples of one one-thousandth
of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-thousandth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Company and a depositary
selected by it,
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provided that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depository shares. If, on the
Distribution Date or thereafter, as a result of any adjustment effected
hereunder in the number of one one-thousandths of a Preferred Share as
to which a Right has become exercisable, a Person would otherwise be
entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-thousandth of a Preferred Share, the
Company shall, in lieu thereof, pay to such Person at the time such
Right is exercised as herein provided an amount in cash equal to the
same fraction (which is not an integral multiple of one one-thousandth
of a Preferred Share) of the current market value of one Preferred
Share. For purposes of this Section 15(b), the current market value of
a Preferred Share shall be the Closing Price of a Preferred Share for
the Trading Day immediately prior to the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or
any mandatory redemption and exchange contemplated by Section 25 occur,
the Company shall not be required to issue fractions of Common Shares
upon exercise of the Rights or to distribute certificates that evidence
fractional Common Shares. If after any such adjustment or mandatory
redemption and exchange, a Person would otherwise be entitled to
receive a fractional Common Share upon exercise of any Right or upon
mandatory redemption and exchange as contemplated by Section 25, the
Company shall, in lieu thereof, pay to such Person at the time such
Right is exercised as herein provided or upon such mandatory redemption
and exchange an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this Section
15(c), the current market value of a Common Share shall be the Closing
Price of a Common Share for the Trading Day immediately prior to the
date of such exercise or the date of such mandatory redemption and
exchange.
(d) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional
shares upon exercise or mandatory redemption and exchange of a Right
(except as provided above).
Section 16. Rights of Action.
(a) All rights of action in respect of the obligations and
duties owed to the holders of the Rights under this Agreement, except
the rights of action given to the Rights Agent under this Agreement,
are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any
registered holder of any Rights may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or
proceeding, judicial or otherwise, against the Company to enforce, or
otherwise to act in respect of, such holder's right to exercise such
Rights in the manner provided in the Right Certificate evidencing such
Rights and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any
Person subject to this Agreement.
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26
(b) Except as otherwise provided in the final paragraph of
Section 7 hereof, no right or remedy herein conferred upon or reserved
to the registered holder of Rights is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or
remedy, whether hereunder or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such
right or remedy or constitute a waiver of any default hereunder or an
acquiescence therein. Every right and remedy given hereunder or by law
to such holders may be exercised from time to time, and as often as may
be deemed expedient, by such holders.
Section 17. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the Rights Register if surrendered at the
Corporate Office of the Rights Agent duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose to be the holder of Preferred Shares, Common Shares or any other
securities of the Company that may at any time be issuable on the exercise (or
mandatory redemption and exchange) of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon any such holder, as such, any of the rights of a stockholder of the
Company, including without limitation any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
to give or withhold consent to any corporate action, to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
26) or to receive dividends or subscription rights until the Right or Rights
evidenced by such Right Certificate shall have been exercised (or mandatorily
redeemed and exchanged) in accordance with the provisions hereof.
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Section 19. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration, preparation, delivery, amendment and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for any action taken, suffered or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including, without limitation, the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly. The indemnity provided herein shall survive the termination of this
Agreement and the termination and expiration of the Rights. In no case will the
Rights Agent be liable for special, indirect, punitive, incidental or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the possibility
of such loss or damage.
The Rights Agent shall be authorized by, and shall be protected and
shall incur no liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this Agreement in
reliance upon, any Right Certificate or certificate for Preferred Shares, Common
Shares or other securities of the Company, Company Order, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be executed and, where necessary, verified
or acknowledged, by the proper person or persons, or otherwise upon the advice
of its counsel as set forth in Section 20 hereof.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
the duties and obligations expressly imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of current per share market
price) be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization
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
in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
or any other Person only for its own gross negligence, bad faith or
willful misconduct.
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(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its authentication thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability or
responsibility with respect to the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or with respect to the validity or execution of any Right
Certificate (except its authentication thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section
12(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Sections 3, 12, 14, 24 and 25, or the ascertainment of the existence of
facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it
by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Shares or
Common Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares or Common Shares
will, when issued, be duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person reasonably believed by the Rights Agent to be
one of the Chairman of the Board, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken, suffered or omitted to be taken by it in good
faith in accordance with instructions of any such officer or from any
delay in acting while waiting for such instructions. Any application by
the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed
to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or
suffered or such omission shall be effective. The Rights Agent shall
not be liable for any action taken or suffered by, or omission of, the
Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any
officer of the Company actually receives such application unless any
such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the
case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to
be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, member, director,
Affiliate, officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
of the Company resulting from any such act, default, neglect or
misconduct absent gross negligence, bad faith or willful misconduct 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 contained
in the form of assignment or the form of election to purchase set
forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an
Affiliate or Associate thereof), the Rights Agent shall not take any
further action with respect to such requested exercise or transfer
without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
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Section 21. Merger or Consolidation or Change of Name of Rights Agent.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the shareholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22. If at the time such successor Rights Agent shall
succeed to the agency created by this Agreement any of the Right Certificates
shall have been authenticated but not delivered, any such successor Rights Agent
may adopt the authentication of the predecessor Rights Agent and deliver such
Right Certificates so authenticated, and, if at that time any of the Right
Certificates shall not have been authenticated, any successor Rights Agent may
authenticate such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
for the Common Shares and the Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent for the Common Shares and the Preferred
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the registered holder of a Right
Certificate (or, prior to the Distribution Date, of Common Shares), then any
registered holder of a Right Certificate (or, prior to the Distribution Date, of
Common Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be either (a) a corporation organized
and doing business under the laws of the United States or of any state of the
United States, that is authorized to do business under such laws and is subject
to supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (b) an Affiliate of such a corporation. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but
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the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent for
the Common Shares of the Company and the Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 22, or any defect therein, shall
not, however, affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 23. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board to reflect any adjustment or change in the
Purchase Price per share and the number or kind or class of shares or other
securities purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.
Section 24. Redemption.
(a) The Rights may be redeemed by action of the Board pursuant
to paragraph (b) of this Section 24, or may be redeemed and exchanged
by action of the Board pursuant to Section 25 herein, but shall not be
redeemed in any other manner.
(b) The Board may, at its option, at any time prior to the
Close of Business on the Shares Acquisition Date redeem all but not
less than all the then outstanding Rights at a redemption price of $.01
per Right then outstanding, appropriately adjusted to reflect any
adjustment in the number of Rights outstanding pursuant to Section
12(i) herein (such redemption price being hereinafter referred to as
the "Redemption Price"). Any such redemption of the Rights by the Board
may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates
to exercise the Rights evidenced thereby or, if the Distribution Date
has not theretofore occurred, the inchoate right of the registered
holders of Rights to exercise the same shall, without notice to such
holders or to the Rights Agent and without further action, terminate
and be of no further force or effect effective as of the time of
adoption by the Board of a resolution authorizing and directing the
redemption of the Rights pursuant to paragraph (b) of this Section 24
(or, alternatively, if the Board qualified such action as to time,
basis or conditions, then at such time, on such basis and with such
conditions as the Board may have established pursuant to such paragraph
(b)); thereafter, the only right of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give public
notice and notice to the Rights Agent of any redemption resolution
pursuant to paragraph (b) of this Section 24; provided, however, that
the failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after the adoption of
any redemption resolution pursuant to paragraph (b) of this Section 24,
the Company shall give notice of such redemption to the holders of the
then outstanding Rights by mailing such notice to the Rights Agent and
to all such holders at their last addresses as they
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appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agents for the
Common Shares. Any notice that is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption shall state the method by which the
payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or
Associates may acquire (other than, in the case of such Affiliates and
Associates, in their capacity as holders of Common Shares), redeem or
purchase for value any Rights at any time in any manner other than as
specifically set forth in this Section 24 or in Section 25 herein, and
other than in connection with the purchase of Common Shares prior to
the Distribution Date.
Section 25. Mandatory Redemption and Exchange.
(a) The Board may, at its option, at any time after the Close
of Business on the Shares Acquisition Date, issue Common Shares in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section
12(a)(ii) hereof) at an exchange ratio of one Common Share for each two
Common Shares for which each Right is then exercisable pursuant to the
provisions of Section 12(a)(ii) hereof. Notwithstanding the foregoing,
the Board shall not be empowered to effect such redemption and exchange
at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any such
Subsidiary, or any entity holding Voting Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Voting
Shares then outstanding.
(b) As of the Close of Business on such date as the Board
orders the mandatory redemption and exchange of any Rights pursuant to
subsection (a) of this Section 25 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of the holders of such Rights shall be to
receive such number of Common Shares as is provided in paragraph (a) of
this Section 25. The Company shall promptly give public notice and
notice to the Rights Agent of any such redemption and exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such redemption and exchange.
The Company promptly shall mail a notice of any such redemption and
exchange to all the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice
that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
mandatory redemption and exchange shall state the method by which the
redemption and exchange of the Common Shares for Rights will be
effected and, in the event of any partial redemption and exchange, the
number of Rights that will be redeemed and exchanged. Any partial
redemption and exchange shall be effected pro rata based on the number
of Rights (other than Rights that have become null and void pursuant to
the provisions of Section 12(a)(ii) hereof) held by each holder of
Rights.
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(c) In any mandatory redemption and exchange pursuant to this
Section 25, the Company, at its option, may substitute Preferred Shares
(or equivalent preferred shares, as such term is defined in Section
12(b) hereof) for Common Shares, at the initial rate of one
one-thousandth of a Preferred Share (or equivalent preferred share) for
each Common Share, as appropriately adjusted.
Section 26. Notice of Certain Events. If the Company shall, on or after
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company to
the holders of its Preferred Shares, (b) to distribute to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (c) to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (d) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly Owned Subsidiary or Wholly Owned Subsidiaries), (f) to
effect the liquidation, dissolution or winding up of the Company or (g) if the
Rights have theretofore become exercisable with respect to Common Shares
pursuant to Section 12(a)(ii) herein, to declare or pay any dividend or other
distribution on the Common Shares payable in Common Shares or in stock of any
other class of the Company or any Subsidiary of the Company or to effect a
subdivision or combination of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) then, in each such
case, the Company shall give to each holder of a Right Certificate and to the
Rights Agent, in accordance with Section 28 hereof, notice of such proposed
action, which shall specify the date of authorization of such actions by the
Board and either the record date for such stock dividend or other distribution
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, winding up, subdivision or combination is to
take place and the date of participation therein by the holders of the Common
Shares or the Preferred Shares, or both, if any such date is to be fixed. Such
notice shall be so given in the case of any action covered by clause (a), (b) or
(g) above at least 20 days prior to the record date for determining holders of
the Preferred Shares or of the Common Shares, as the case may be, for purposes
of such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Shares or Common Shares, as the case may
be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate and to the Rights Agent,
in accordance with Section 28 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 12(a)(ii) hereof.
Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, no later than the
Distribution Date, and will use all reasonable efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Preferred Shares
issuable upon exercise
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of the Rights, and the Company will, thereafter, use all reasonable efforts to
maintain such registration statement (or another) continuously in effect so long
as any Rights remain outstanding and exercisable with respect to Preferred
Shares. Should the Rights become exercisable with respect to securities of the
Company or one of its Subsidiaries other than Preferred Shares, the Company
agrees that it will, to the extent legally required, promptly thereafter prepare
and file, or cause to be prepared and filed, and will use all reasonable efforts
to cause to be declared effective, a registration statement under such Act
registering the offering, sale and delivery of such other securities and the
Company will, thereafter, use all reasonable efforts to maintain such
registration statement (or another) continuously in effect so long as any
outstanding Rights are exercisable with respect to such securities. The Company
further agrees to use all reasonable efforts, from and after the Distribution
Date, to qualify or register for sale the Preferred Shares or other securities
of the Company or one of its Subsidiaries issuable upon exercise of the Rights
under the securities or "Blue Sky" laws (to the extent legally required
thereunder) of all jurisdictions in which registered holders of Right
Certificates reside determined by reference to the Rights Register.
Section 28. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Newfield Exploration Company
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
ChaseMellon Shareholders Services L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register or, prior to the Distribution Date, on the stock transfer records for
the Common Shares.
Section 29. Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement (which supplement
or amendment shall be evidenced by a writing signed by the Company and the
Rights Agent) without the approval of any holders of Right Certificates in order
to cure any ambiguity, to correct or supplement any provision
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contained herein that may be defective or inconsistent with any other provisions
herein, to make any other provisions in regard to matters or questions arising
hereunder, or to add, delete, modify or otherwise amend any provision, that the
Company may deem necessary or desirable, including without limitation extending
the Final Expiration Date and, provided that at the time of such amendment or
supplement the Distribution Date has not occurred, the period during which the
Rights may be redeemed; provided, however, that, after the Distribution Date,
any such amendment or supplement shall not materially and adversely affect the
interests of the holders of the Rights. Without limiting the foregoing, the
Board may by resolution adopted at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the threshold set
forth in the definitions of Acquiring Person and Distribution Date herein from
20% to a percentage not less than the greater of (i) any percentage greater than
the largest percentage of the outstanding Voting Shares then known to the
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Voting Shares for or pursuant to
the terms of any such plan), and (ii) 10%. Upon the delivery of a certificate
from any officer of the Company specified in Section 20(b) hereof stating that a
proposed supplement or amendment complies with the terms of this Section, the
Rights Agent shall execute such supplement or amendment. Notwithstanding any
other provision hereof, the Rights Agent's consent must be obtained regarding
any amendment or supplement pursuant to this Section 29 that alters the Rights
Agent's rights, liabilities, obligations or duties.
Section 30. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 31. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
Section 32. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. Governing Law. This Agreement and each Right Certificate
(and, prior to the Distribution Date, the Rights represented by certificates for
Common Shares) issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
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Section 35. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
NEWFIELD EXPLORATION COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President - Planning and
Administration
CHASEMELLON SHAREHOLDER SERVICES L.L.C.,
As Rights Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Vice President
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EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
JUNIOR PARTICIPATING PREFERRED STOCK
OF
NEWFIELD EXPLORATION COMPANY
Pursuant to Section 151 of the
General Corporation Law
of the State of Delaware
Newfield Exploration Company (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "DGCL"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by Section 151
of the DGCL at a meeting duly called and held on February 12, 1999:
RESOLVED, that, pursuant to the authority granted to and vested in the
Board of Directors of the Corporation in accordance with the provisions of the
Corporation's Second Restated Certificate of Incorporation, as amended, and
Section 151 of the DGCL, the Board of Directors of the Corporation hereby
creates a series of preferred stock, par value $.01 per share, of the
Corporation and hereby states that the designation and number of shares and the
relative rights, preferences and limitations thereof (in addition to the
provisions set forth in the Second Restated Certificate of Incorporation of the
Corporation, as amended, that are applicable to preferred stock of all series)
are as follows:
Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Junior Participating Preferred Stock" (the "Junior Preferred
Stock") and the number of shares constituting the Junior Preferred Stock shall
be 100,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Junior Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Junior
Preferred Stock.
37
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and
superior to the Junior Preferred Stock with respect to dividends, the
holders of shares of Junior Preferred Stock, in preference to the
holders of common stock, par value $0.01 per share ("Common Stock"), of
the Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for such purpose, quarterly dividends payable
on the first business day of February, May, August and November in each
year (each such date being referred to herein as a "Quarterly Dividend
Payment Date") as provided in paragraphs (b) and (c) of this Section 2
in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $1.00 in cash and (ii) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount (payable in cash) of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Junior Preferred Stock.
If the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to
which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under clause (ii) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution
on the Junior Preferred Stock as provided in paragraph (a) of this
Section 2 immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, if no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share payable in cash on the
Junior Preferred Stock shall nevertheless accrue and be cumulative on
the outstanding shares of Junior Preferred Stock as provided in
paragraph (c) of this Section 2.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is (i) on or prior to the
record date for the first Quarterly Dividend Payment Date or (ii) on a
Quarterly Dividend
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Payment Date, in either of which cases dividends on such shares shall
begin to accrue and be cumulative from the date of issue of such
shares. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Junior Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of Junior Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Junior Preferred
Stock shall have the following voting rights:
(a) Subject to the provisions for adjustment hereinafter set
forth, each share of Junior Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. If the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or in any other series
designation creating a series of preferred stock or any similar stock
or as otherwise provided by law, the holders of shares of Junior
Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall
vote together as one class on all matters submitted to a vote of the
stockholders of the Corporation.
(c) Except as set forth herein or as otherwise provided by
law, holders of Junior Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Junior Preferred Stock outstanding shall have been paid in full, or
declared and a sum
A-3
39
sufficient for the payment therefor be set apart for payment and be in
the process of payment, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Junior Preferred Stock, except dividends
paid ratably on the Junior Preferred Stock and all such parity
stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Junior Preferred Stock; provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (as to both dividends and upon
dissolution, liquidation or winding up) to the Junior
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred Stock or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the holders of the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (a) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
subject to the conditions and restrictions on issuance set forth herein, in the
Corporation's certificate of incorporation then in effect or in any other series
designation creating a series of preferred stock or any similar stock or as
otherwise required by law.
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Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
to the Junior Preferred Stock unless, prior thereto, the holders of Junior
Preferred Stock shall have received an amount per share (rounded to the nearest
cent) equal to the greater of (i) $1,000 and (ii) subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of Common Stock, plus, in either case, an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment or (b) to the holders of stock
ranking on a parity (either as to dividends or as to amounts payable upon
liquidation, dissolution or winding up) with the Junior Preferred Stock, except
distributions made ratably on the Junior Preferred Stock and all such parity
stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. If the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (a)(ii) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. If the Corporation shall enter
into any consolidation, merger, combination or other transaction in which shares
of Common Stock are exchanged for or changed into other stock or securities,
cash or any other property, or any combination thereof, then in any such case
each share of Junior Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount of
stock, securities, cash or any other property (payable in kind), or any
combination thereof, as the case may be, into which or for which each share of
Common Stock is changed or exchanged. If the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Junior Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. Redemption. The shares of Junior Preferred Stock shall not
be redeemable. So long as any shares of Junior Preferred Stock remain
outstanding, the Corporation shall not purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock unless the
A-5
41
Corporation shall concurrently purchase or acquire for consideration a
proportionate number of shares of Junior Preferred Stock.
Section 9. Rank. The Junior Preferred Stock shall rank, with respect to
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's preferred stock.
Section 10. Amendment. At any time that any shares of Junior Preferred
Stock are outstanding, the certificate of incorporation of the Corporation shall
not be amended in any manner that would materially alter or change the powers,
preferences, privileges or special rights of the Junior Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a majority
of the outstanding shares of Junior Preferred Stock, voting together as a single
class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its President, and attested by its Secretary, this
_____ day of February, 1999.
NEWFIELD EXPLORATION COMPANY
By:
-------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
President
ATTEST:
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary
A-6
42
EXHIBIT B
Form of Right Certificate
Certificate No. R- Rights
-----
NOT EXERCISABLE AFTER FEBRUARY 22, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN
SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
NEWFIELD EXPLORATION COMPANY
This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of February 12, 1999 (the "Rights
Agreement"), between NEWFIELD EXPLORATION COMPANY, a Delaware corporation (the
"Company"), and CHASEMELLON SHAREHOLDER SERVICES L.L.C. (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 p.m., eastern time, on
February 22, 2009, at the Corporate Office of the Rights Agent (or at the office
of its successor as Rights Agent), one one-thousandth (1/1000) of a fully paid
non-assessable share of Junior Participating Preferred Stock, par value $.01 per
share (the "Preferred Shares"), of the Company, at a purchase price of $85.00
per one one-thousandth (1/1000) of a Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share that may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of February 22, 1999 based on
the Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-thousandths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon that
happening of certain events.
43
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 hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged by the Company in whole or in part for
Preferred Shares or shares of the Company's common stock, par value $0.01 per
share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depository receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Right Agent.
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44
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of , .
------------------- ----
ATTEST: NEWFIELD EXPLORATION COMPANY
[SEAL]
By:
------------------------------ -------------------------
Secretary President
Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
ChaseMellon Shareholder Services L.L.C., as Rights Agent
By:
---------------------------
Authorized Signature
B-3
45
[Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _____________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
_______________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated as of , .
------------------- ----
-------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-------------------------------
Signature
--------------------------------------------------------------------------------
B-4
46
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO NEWFIELD EXPLORATION COMPANY
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or other securities) be issued in
the name of:
Please insert social security or other identifying number:
------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated as of , .
------------------- ----
-------------------------------
Signature
B-5
47
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-------------------------------
Signature
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NOTICE
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
48
EXHIBIT C
SUMMARY OF RIGHTS TO
PURCHASE PREFERRED SHARES
On February 12, 1999, the Board of Directors of Newfield Exploration
Company (the "Company") authorized the issuance of one preferred share purchase
right (a "Right") with respect to each outstanding share of common stock, par
value $.01 per share (the "Common Shares"), of the Company. The rights were
issued on February 22, 1999 to the holders of record of Common Shares on that
date. Each Right entitles the registered holder to purchase from the Company one
one-thousandth (1/1000) of a share of Junior Participating Preferred Stock, par
value $.01 per share (the "Preferred Shares"), of the Company at a price of
$85.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") dated as of February 12, 1999
between the Company and ChaseMellon Shareholder Services L.L.C, as Rights Agent.
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the Common
Shares and a Distribution Date will occur upon the earlier of (i) 10 business
days following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
20% or more of the outstanding Voting Shares (as defined in the Rights
Agreement) of the Company and (ii) 10 business days following the commencement
or announcement of an intention to commence a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of such outstanding Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to any of the Common
Shares outstanding on February 22, 1999, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after February 22, 1999, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of February 22, 1999, even without such
notation or a copy of this Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
49
The Rights are not exercisable until the Distribution Date. The Rights
will expire on February 22, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If a person or group were to acquire 20% or more of the Voting Shares
of the Company, each Right then outstanding (other than Rights beneficially
owned by the acquiring person which would become null and void) would become a
right to buy that number of Common Shares (or under certain circumstances, the
equivalent number of one one-thousandths of a Preferred Share) that at the time
of such acquisition would have a market value of two times the Purchase Price of
the Right.
If the Company were acquired in a merger or other business combination
transaction or assets constituting more than 50% of its consolidated assets or
producing more than 50% of its earning power or cash flow were sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction would have a market value of two times the
Purchase Price of the Right.
PREFERRED SHARES. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend equal to the
greater of (i) $1.00 and (ii) 1,000 times the aggregate per share dividend
declared on the Common Shares. In the event of liquidation, the holders of the
Preferred Shares will be entitled to receive a preferential liquidation payment
per whole share equal to the greater of (i) $1,000 and (ii) 1,000 times the
aggregate amount to be distributed per Common Share. In the event of any merger,
consolidation or other transaction in which Common Shares are exchanged for or
changed into other stock or securities, cash or other property, each whole
Preferred Share will be entitled to receive 1,000 times the amount received per
Common Share. Each whole Preferred Share shall be entitled to 1,000 votes on all
matters submitted to a vote of the stockholders of the Company, and Preferred
Shares shall generally vote together as one class with the Common Shares and any
other capital stock on all matters submitted to a vote of the stockholders of
the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
ANTIDILUTION AND OTHER ADJUSTMENTS. The Purchase Price and the number
of one one-thousandths of a Preferred Share or other securities or property
issuable upon exercise of the Rights are subject to customary adjustments from
time to time to prevent dilution.
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50
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
EXCHANGE OPTION. At any time after the acquisition by a person or group
of affiliated or associated persons of beneficial ownership of 20% or more of
the outstanding Voting Shares of the Company and before the acquisition by a
person or group of 50% or more of the outstanding Voting Shares of the Company,
the Board of Directors may, at its option, issue Common Shares in mandatory
redemption of, and in exchange for, all or part of the then outstanding and
exercisable Rights (other than Rights owned by such person or group which would
become null and void) at an exchange ratio of one Common Share (or one
one-thousandth of a Preferred Share) for each two Common Shares for which each
Right is then exercisable, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the first public
announcement that a person or group has become the beneficial owner of 20% or
more of the outstanding Voting Shares, the Board of Directors of the Company may
redeem all but not less than all the then outstanding Rights at a price of $.01
per Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during which
the Rights may be redeemed, except that after the first public announcement that
a person or group has become the beneficial owner of 20% or more of the
outstanding Voting Shares, no such amendment may materially and adversely affect
the interests of the holders of the Rights.
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
HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement was filed with the Securities and
Exchange Commission on February ___, 1999 as an Exhibit to a Current Report on
Form 8-K. A copy of the Rights Agreement is available free of charge from the
Company.
C-3