WESTERN GAS RESOURCES, INC.
and
FLEET NATIONAL BANK (F/K/A BANK BOSTON, NA)
Rights Agent
RIGHTS AGREEMENT
Dated as of March 22, 2001
TABLE OF CONTENTS
Section 1. Certain Definitions..............................................1
Section 2. Appointment of Rights Agent......................................8
Section 3. Issuance of Rights Certificates..................................9
Section 4. Form of Rights Certificates.....................................11
Section 5. Countersignature and Registration...............................12
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates...........................................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights........................................................14
Section 8. Cancellation and Destruction of Rights Certificates.............17
Section 9. Reservation and Availability of Capital Stock...................17
Section 10. Preferred Stock Record Date.....................................19
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. .........................................20
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares........................................................30
Section 13. Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow or Earning Power....................................30
Section 14. Fractional Rights and Fractional Shares.........................34
Section 15. Rights of Action................................................36
Section 16. Agreement of Rights Holders.....................................37
Section 17. Rights Certificate Holder Not Deemed a Stockholder..............37
Section 18. Concerning the Rights Agent.....................................38
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.........................................................39
Section 20. Duties of Rights Agent..........................................39
Section 21. Change of Rights Agent..........................................42
Section 22. Issuance of New Rights Certificates.............................43
Section 23. Redemption and Termination......................................44
Section 24. Exchange........................................................45
Section 25. Notice of Certain Events........................................46
Section 26. Notices.........................................................47
Section 27. Supplements and Amendments......................................48
Section 28. Successors......................................................49
Section 29. Determinations and Actions by the Board, etc....................49
Section 30. Benefits of this Agreement......................................50
Section 31. Severability....................................................50
Section 32. Governing Law...................................................50
Section 33. Counterparts....................................................51
Section 34. Descriptive Headings............................................51
Exhibit A Form of Certificate of Designation, Rights and
Preferences of the Series of the Preferred Stock.............A-1
Exhibit B Form of Rights Certificate.....................................B-1
Exhibit C Form of Summary of Rights......................................C-1
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 22, 2001, between Western
Gas Resources, Inc., a Delaware corporation (the "Company"), and Fleet
National Bank (f/k/a Bank Boston, NA) (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on March 22, 2001, the Board of Directors of the
Company (the "Board") determined it desirable and in the best interests of
the Company and its stockholders for the Company to adopt a stockholder
rights plan (the "Rights Plan") and to implement the Rights Plan by
executing this Agreement (as hereinafter defined) and declaring the
dividend distribution referred to in the second WHEREAS clause herein;
WHEREAS, on March 22, 2001 (the "Rights Dividend Declaration
Date"), the Board authorized and declared a dividend distribution of one
Right (as hereinafter defined) for each share of Common Stock (as
hereinafter defined) of the Company outstanding at the Close of Business on
April 9, 2001 (the "Record Date") and has authorized the issuance of one
Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(i) hereof) for each share of Common Stock of the
Company issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and the Distribution Date (as
hereinafter defined) each Right initially representing the right to
purchase one one-hundredth of a share of Preferred Stock (as hereinafter
defined) having the rights, powers and preferences set forth in the form of
the Certificate of Designation, Rights and Preferences, attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set
forth (each, a "Right");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates and Associates (as
hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 15% or more of the shares of Common Stock of the
Company then outstanding, but shall not include an Exempt Person (as
hereinafter defined).
(b) "Act" shall mean the Securities Act of 1933, as amended and
in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the Exchange Act Rules (as
hereinafter defined); provided, however, that no Subsidiary of the Company,
employee benefit plan of the Company or any Subsidiary of the Company,
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan shall be deemed an Affiliate or
Associate.
(d) "Agreement" shall mean this Rights Agreement as originally
executed or as it may from time to time be supplemented, amended, renewed,
restated or extended pursuant to the applicable provisions hereof.
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, owns or has the
right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants,
options or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by 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, (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event (as hereinafter
defined) or (C) securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event which Rights are Original
Rights (as hereinafter defined) or securities issuable pursuant to
Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the Exchange Act Rules), including pursuant
to any agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under
this Subparagraph (ii) as a result of an agreement, arrangement or
understanding (whether or not in writing) to vote such security if
such agreement, arrangement or understanding: (A) arises solely from
a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act Rules and (B) is not also
then reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause
(A) of the proviso to Subparagraph (ii) of this Paragraph (e)) or
disposing of any voting securities of the Company;
provided, however, that nothing in this Paragraph (e) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to be deemed to "beneficially own," any securities acquired,
or which that Person has the right to acquire, through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition, and then only if
such securities continue to be owned by such Person at such expiration of
40 days.
(f) "Board" shall have the meaning set forth in the first
"WHEREAS" clause at the beginning of this Agreement.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean 5:00 P.M.,
New York City time, on such date; provided, however, that if such date is
not a Business Day, it shall mean 5:00 P.M., New York City time, on the
next succeeding Business Day.
(i) "Common Stock" shall mean the common stock, par value $.10
per share, of the Company or any other shares of capital stock of the
Company into which such stock shall be reclassified or changed. "Common
Stock" when used with reference to any Person other than the Company
organized in corporate form shall mean (i) the capital stock or other
equity interest in such Person with the greatest voting power, (ii) the
equity securities or other equity interest having power to control or
direct the management of such Person or (iii) if such Person is a
Subsidiary (as hereinafter defined) of another Person, the capital stock,
equity securities of, or other equity interest in, the Person or Persons
which ultimately control such first-mentioned Person and which has issued
any such outstanding capital stock, equity securities or equity interest.
"Common Stock" when used with reference to any Person not organized in
corporate form shall mean units of beneficial interest which (x) represent
the right to participate generally in the profits and losses of such Person
(including, without limitation, any flow-through tax benefits resulting
from an ownership interest in such Person) and (y) are entitled to exercise
the greatest voting power of such Person or, in the case of a limited
partnership, have the power to remove the general partner or partners.
(j) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(k) "Company" shall have the meaning set forth in the first
Paragraph of this Agreement until a successor corporation or entity shall
have become such or until a Principal Party (as hereinafter defined) shall
assume, and thereafter be liable for, all obligations and duties of the
Company hereunder pursuant to the applicable provisions of this Agreement,
and thereafter, "Company" shall mean such successor or Principal Party,
respectively.
(l) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(m) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(o) "Equivalent Preference Stock" shall have the meaning set
forth in Section 11(b) hereof.
(p) "Exchange Ratio" shall mean the meaning set forth in
Section 24 hereof.
(q) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement.
(r) "Exchange Act Rules" shall mean the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement.
(s) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or employee
stock plan of the Company or of any Subsidiary of the Company, (iv) any
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan or such employee
stock plan, (v) any Person who, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding solely as a result of a
reduction in the number of shares of Common Stock of the Company
outstanding due to the repurchase of shares of Common Stock of the Company
by the Company, unless and until such time as such Person shall purchase or
otherwise become (as a result of actions taken by such Person or its
Affiliates or Associates) the Beneficial Owner of additional shares of
Common Stock of the Company constituting 1% or more of the then outstanding
shares of Common Stock of the Company, (vi) any such Person who has
reported or is required to report such ownership on Schedule 13G under the
Exchange Act (or any comparable or successor report) and who Beneficially
Owns less than 15% of the then outstanding shares of Common Stock and, any
such Person who inadvertently becomes the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding (but less than 20%) if
within 10 Business Days of being requested by the Company to advise it
regarding the same, certifies to the Company that such Person acquired
shares of Common Stock in excess of 14.9% inadvertently or without
knowledge of the terms of the Rights and who, together with all Affiliates
and Associates, thereafter does not acquire additional shares of Common
Stock while the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding; provided, however, that if the Person requested to
so certify fails to do so within 10 Business Days or breaches or violates
such certification, then such Person shall become an Acquiring Person
immediately after such 10-Business-Day period or such breach or violation,
or (vii) any such Person who has reported or is required to report such
ownership on Schedule 13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state any intention to or
reserve the right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of such
schedule (other than the disposition of the Common Stock) who inadvertently
becomes the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding (but less than 20%) if within 10 Business Days of being
requested by the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the Rights and who,
together with all Affiliates and Associates, thereafter does not acquire
additional shares of Common Stock while the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding; provided, however, that if
the Person requested to so certify fails to do so within 10 Business Days
or breaches or violates such certification, then such Person shall become
an Acquiring Person immediately after such 10-Business-Day period or such
breach or violation.
(t) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(u) "Final Expiration Date" shall mean the Close of Business on
March 22, 2011.
(v) "Original Rights" shall mean Rights acquired by a Person or
such Person's Associates or Affiliates prior to the Distribution Date or
issued pursuant to Section 3(a) or Section 22 hereof.
(w) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, limited liability partnership,
trust, syndicate or other entity and includes without limitation an
unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose
or act.
(x) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.10 per share, of the Company,
and, to the extent that there are not a sufficient number of shares of
Series A Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the
terms of the Series A Junior Participating Preferred Stock.
(y) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(z) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(aa) "Record Date" shall have the meaning set forth in the
second "WHEREAS" clause at the beginning of this Agreement.
(bb) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(cc) "Rights" shall have the meaning set forth in the second
"WHEREAS" clause at the beginning of this Agreement.
(dd) "Rights Agent" shall mean the Person named as the "Rights
Agent" in the first Paragraph of this Agreement until a successor Rights
Agent shall have become such pursuant to the applicable provisions hereof,
and thereafter "Rights Agent" shall mean such successor Rights Agent. If at
any time there is more than one Person appointed by the Company as Rights
Agent pursuant to the applicable provisions of this Agreement, "Rights
Agent" shall mean and include each such Person.
(ee) "Rights Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(ff) "Rights Dividend Declaration Date" shall have the meaning
set forth in the second "WHEREAS" clause at the beginning of this
Agreement.
(gg) "Rights Plan" shall have the meaning set forth in the
first "WHEREAS" clause hereof.
(hh) "Section 11(a)(ii) Event" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(ii) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(jj) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(kk) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company that an Acquiring Person has become
such.
(mm) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership interest
having ordinary voting power sufficient, in the absence of contingencies,
to elect at least a majority of the board of directors or other persons
performing similar functions of such corporation or other entity are at the
time directly or indirectly beneficially owned or otherwise controlled by
such Person and any Affiliate or Associate of such Person.
(nn) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(oo) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(pp) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(qq) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of Common Stock of the Company) in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable, upon 10 days'
prior written notice to the Rights Agent. 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. In the event that the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall determine and
any actions which may be taken by the Rights Agent pursuant to the terms of
this Agreement may be taken by any such Co-Rights Agent.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
Business Day (or such specified or unspecified later date as may be
determined by the Board before the occurrence of a Distribution Date) after
the Stock Acquisition Date (or, if the tenth Business Day (or such later
date) after the Stock Acquisition Date occurs before the Record Date, the
Close of Business on the Record Date) or (ii) the Close of Business on the
tenth Business Day (or such specified or unspecified later date as may be
determined by the Board before the occurrence of a Distribution Date) after
the date that a tender or exchange offer by any Person (other than an
Exempt Person) is first published or sent or given within the meaning of
Rule 14d-2(a) of the Exchange Act Rules if upon consummation thereof such
Person would be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, (in the case of (i) and (ii), other than pursuant
to a Qualifying Offer made at a time when the Rights are redeemable), or
(iii) the date on which the Rights Certificates are distributed in
accordance with Section 13(c) hereof (the earlier of (i), (ii) and (iii)
being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of Paragraphs (b) and (c) of this
Section 3) by the certificates for the Common Stock of the Company
registered in the names of the holders thereof (which certificates for
Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock of the
Company as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
rights certificates, substantially in the form attached hereto as Exhibit B
(each, a "Rights Certificate"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(i) hereof, at the time of distribution
of the Rights Certificates, the Company shall not be required to issue
Rights Certificates evidencing fractional Rights, but may, in lieu thereof,
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will make available a copy of a summary of Rights (a "Summary of
Rights") substantially in the form attached hereto as Exhibit C to any
holder of the Rights who may so request from time to time prior to the
Expiration Date. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders
of the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date, the transfer of any certificates representing shares of
Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of Common
Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date and, to the extent provided in
Section 22 hereof, in respect of shares of Common Stock of the Company
issued after the Distribution Date and prior to the Expiration Date.
Certificates representing such shares of Common Stock of the Company shall
also be deemed to be certificates for Rights, and shall, as promptly as
practicable following the Record Date, bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Western Gas Resources, Inc. (the "Company") and Fleet
National Bank (f/k/a Bank Boston, NA (the "Rights Agent"),
dated as of March 22, 2001, as the same may be amended,
restated, renewed or extended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
offices of the 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. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth
in the Rights Agreement, Rights beneficially owned (as such
term is defined in the Rights Agreement) by any Person who is,
was or becomes an Acquiring Person or any Affiliate or
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, may become null and
void. The Rights shall not be exercisable, and shall be void so
long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of
Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate contained therein to be printed on the
reverse thereof) shall each be substantially in the form attached hereto as
Exhibit B and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed,
or to conform to usage. Subject to the provisions of Section 11 and Section
22 hereof, the Rights Certificates, whenever distributed, shall be dated as
of the Record Date and on their face shall entitle the holders thereof to
purchase such number of shares of one one-hundredth of a share of Preferred
Stock as shall be set forth therein at the exercise price set forth therein
(such exercise price per on one-hundredth of share, as adjusted from time
to time hereunder, the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person; (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such; or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board, in its sole
discretion, has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of the provisions of
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section
6 or Section 11 hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall contain
(to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and by the Secretary or any
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by an authorized
signatory of the Rights Agent, either manually or by facsimile signature,
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by an
authorized signatory of the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by an
authorized signatory of the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed such
Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall
be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Agreement any such person was
not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Rights Certificate or Certificates (other than Rights
Certificates representing Rights that may have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates entitling the registered
holder to purchase a like number of shares of one one-hundredth of a share
of Preferred Stock (or, following the occurrence of a Triggering Event,
Common Stock, other securities, cash or other assets, as the case may be)
as the Rights Certificate or Rights Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Rights Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split up, combined or
exchanged, with the forms of assignment and certificate contained therein
duly executed, at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate or Rights Certificates until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate or
Rights Certificates and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request. Thereupon,
the Rights Agent shall, subject to Section 4(b), Section 7(e), Section 14
and Section 24 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment from the holder of a Rights
Certificate of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination
or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Rights Certificate and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated. Without
limiting the foregoing, the Company may require the owner of any lost,
stolen or destroyed Rights Certificate, or his legal representative, to
give the Company a bond sufficient to indemnify the Company against any
claim that may be made against it on account of the alleged loss, theft or
destruction of any such Rights Certificate or the issuance of any such new
Rights Certificate.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section
23(a) hereof) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate contained therein duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of shares of one one-hundredth of a share of
Preferred Stock (or, following the occurrence of a Triggering Event, Common
Stock, other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to the
earliest of (i) the Final Expiration Date or (ii) the time at which all of
the Rights are redeemed or exchanged as provided in Section 23 or Section
24 hereof, respectively, or (iii) the time at which all of the rights
expire pursuant to Section 13(d) hereof (the earliest of (i), (ii) and
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$180, shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance with
Paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate contained therein duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price, as such amount
may be reduced pursuant to Section 11(a)(iii) hereof, per one one-hundredth
of a share of Preferred Stock (or, following the occurrence of a Triggering
Event, for Common Stock, other securities, cash or other assets, as the
case may be) to be purchased (as set forth below) and an amount equal to
any applicable transfer tax, the Rights Agent shall, subject to Sections
7(f) and 20(k) hereof, thereupon promptly (i)(A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-hundredth of a share of Preferred Stock to be
purchased, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests or (B) if the Company shall have elected
to deposit the total number of shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of one
one-hundredth of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent to comply with such request), (ii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order
of the registered holder of such Rights Certificates, registered in such
name or names as may be designated by such holder, (iii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional
shares in accordance with Section 14 hereof, and (iv) after receipt
thereof, deliver such cash, if any, to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof)
shall be made in cash or by certified check, cashier's check or bank draft
payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to this Section
7(c) or Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
The Company reserves the right to require, prior to the occurrence of a
Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all of the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after such Acquiring Person becomes such or (iii) a transferee of any such
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with such Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from such Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a
transfer which the Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise.
The Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person or any of their Affiliates, or Associates, transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of any Rights Certificate
upon the occurrence of any purported assignment or exercise as set forth in
this Section 7 unless such registered holder shall have (i) completed and
signed the certificate contained in the form of assignment or election to
purchase set forth on the reverse side of the Rights Certificate
surrendered for such assignment or exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Rights Certificates
to the Company, or shall, at the written request of the Company, destroy
such cancelled Rights Certificates and, in such case, shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that, from and after the
Distribution Date, it will cause to be reserved and kept available out of
its authorized and unissued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized and issued
shares held in its treasury), the number of shares of Preferred Stock of
the Company (and, following the occurrence of a Triggering Event, the
amount of Common Stock and/or other securities) that, as provided in this
Agreement (including Section 11(a)(iii) hereof) will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on
any national securities exchange, the Company shall use its reasonable
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its reasonable efforts to (i) file,
as soon as practicable following the earliest date after the first
occurrence of a Triggering Event in which the consideration to be delivered
by the Company upon exercise of the Rights has been determined in
accordance with this Agreement, or as soon as required by law following the
Distribution Date, as the case may be, a registration statement under the
Act on an appropriate form with respect to the Common Stock of the Company
or other securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable
after such filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "Blue Sky" laws of the various states
and other jurisdictions in connection with the exercisability of the
Rights. The Company may, acting by resolution of the Board, temporarily
suspend, for a period of time not to exceed 90 days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a public announcement at such time as the suspension is no longer in
effect. In addition, if the Company shall determine that a registration
statement is required in other circumstances following the Distribution
Date, the Company may similarly temporarily suspend the exercisability of
the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained or the
exercise thereof shall not otherwise be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-hundredth of a share
of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject
to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that, except as
set forth in Section 6(a) hereof and this Section 9(e), it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-hundredth of a
share of Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of one one-hundredth of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may
be) in respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise, nor shall
the Company be required to issue or deliver any certificates for a number
of one one-hundredth of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for a number of one one-hundredth of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of such fractional shares of Preferred
Stock (or Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment is
a date upon which the transfer books for the Preferred Stock (or Common
Stock and/or other securities, as the case may be) are closed, such Person
shall be deemed to have become the record holder of such shares (fractional
or otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books for the Preferred Stock (or Common
Stock and/or other securities, as the case may be) are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a stockholder
of the Company (or the Principal Party) with respect to shares for which
the Rights shall be exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company (or the Principal Party), except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
shares, or fractions thereof, purchasable upon exercise of each Right and
the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide or split
the outstanding Preferred Stock, (C) combine or consolidate the
outstanding Preferred Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of Preferred
Stock (or Common Stock and/or other securities, as the case may be)
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised
immediately prior to such date, whether or not such Right was then
exercisable, and at a time when the transfer books for the Preferred
Stock (or other capital stock, as the case may be) of the Company
were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, split,
combination, consolidation or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that
any Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner of 15% or more
of the shares of the Common Stock of the Company then outstanding,
unless the event causing such 15% threshold to be crossed is a
Section 13 Event, or is an acquisition of shares of Common Stock
pursuant to a tender offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms determined by at least
a majority of the members of the Board who are not officers of the
Company or any of its subsidiaries and who are not representatives,
nominees, Affiliates or Associates of an Acquiring Person, after
receiving advice from one or more investment banking firms, to be (a)
at a price which is fair to the Company's stockholders and not
inadequate (taking into account all factors which such members of the
Board deem relevant, including, without limitation, prices which
could reasonably be achieved if the Company or its assets were sold
on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its stockholders
(a "Qualifying Offer");
then proper provision shall be made so that promptly after the date of
occurrence of Section 11(a)(ii) Event, each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right
to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one
one-hundredth of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one one
hundredth of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event
(whether or not such Right was then issued or exercisable) and (y) dividing
that product (which following such first occurrence shall thereafter be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per share of Common
Stock of the Company on the date of such first occurrence (such number of
shares being hereinafter referred to as the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing Subparagraph (ii) of this Section 11(a), the Company,
acting by resolution of the Board, shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of
a Right (the "Current Value") over (2) the Purchase Price
attributable to each Right (such excess being hereinafter referred to
as the "Spread") and (B) with respect to all or a portion of each
Right (subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon the exercise of a Right
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities, if any, of the Company other than Common Stock
(including, without limitation, shares or units of shares of
Preferred Stock, which the Board has deemed to have the same value or
economic rights as shares of Common Stock (such shares of Preferred
Stock being referred to herein as "Common Stock Equivalents")), (4)
debt securities of the Company, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment
banking firm selected by the Board; provided, however, that if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within 30 days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event and (y) the
date on which the Company's right of redemption pursuant to Section
23(a) hereof, as such date may be extended pursuant to Section 23(a)
hereof or amended pursuant to Section 27 hereof, expires (the later
of (x) and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the Board shall
determine in good faith that it is likely that sufficient additional
shares of Common Stock of the Company could be authorized for
issuance upon exercise in full of the Rights, the 30-day period set
forth above may be extended to the extent necessary, but not more
than 90 days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of
such additional shares (such period, as it may be extended, being
referred to herein as the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the
first and/or third sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended and a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock of the Company shall be the
Current Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date, and the value of any Common Stock Equivalent
shall be deemed to be equal to the value of the Common Stock on such
date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
45 calendar days after such record date) Preferred Stock (or shares having
the same rights, privileges and preferences as the shares of Preferred
Stock (such shares being referred to herein as the "Equivalent Preference
Stock")) or securities convertible into Preferred Stock or Equivalent
Preference Stock at a price per share of Preferred Stock or per share of
Equivalent Preference Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preference Stock)
less than the Current Market Price per share of Preferred Stock on such
record date, except as otherwise provided in Section 11(a) and Section 7(e)
hereof, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the sum of
(i) the number of shares of Preferred Stock outstanding on such record date
and (ii) the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preference Stock so to be offered (or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall
be the sum of (i) the number of shares of Preferred Stock outstanding on
such record date and (ii) the number of additional shares of Preferred
Stock and/or Equivalent Preference Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith
by the Board, which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. Shares of
Preferred Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of the
earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), except as otherwise
provided in Section 11(a) and Section 7(e) hereof, the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price per
share of Preferred Stock on such record date, less the fair market value
(as determined in good faith by the Board, which determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price per share of
Preferred Stock. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof, the
Current Market Price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common
Stock for the 10 consecutive Trading Days immediately following such date;
provided, however, that in the event that the Current Market Price per
share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the
Rights) or (B) any subdivision, combination, consolidation, reverse stock
split or reclassification of such Common Stock, and prior to the expiration
of the requisite 30-Trading Day or 10-Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination, consolidation, reverse stock
split, or reclassification, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated
transaction reporting system or as quoted by The Nasdaq National Market
with respect to securities listed or admitted to trading on another
national securities exchange or quoted by The Nasdaq National Market,
respectively, or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange or quoted by The Nasdaq
National Market, 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 Nasdaq Stock Market or such other quotation system then in
use or, if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board. If on any such date the Common Stock is not
publicly held or not so listed, admitted to trading or quoted, and no
market maker is making a market in such Common Stock, Current Market Price
shall mean the fair value of such shares on such date as determined in good
faith by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in Paragraph (i) of
this Section 11(d) (other than the last sentence thereof). If the Current
Market Price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in Paragraph (i) of this Section
11(d), the Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, Current Market Price per share of the
Preferred Stock shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For
all purposes of this Agreement, the Current Market Price of one
one-hundredth of a share of Preferred Stock shall be equal to the Current
Market Price of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, 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
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-hundredth of a
share of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) 3 years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock
other than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof (or
the number of Rights) shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Stock contained in Sections 11(a), (b), (c),
(e), (g), (h), (i), (j), (k), (l) and (m) hereof, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock of
the Company shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-hundredth of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredth of a share of Preferred
Stock (calculated to the nearest one-millionth of a share) obtained by (i)
multiplying (x) the number of one one-hundredth of a share of Preferred
Stock covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-hundredth of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-hundredth of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-hundredth of a Right) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights
to which such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredth of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per one one-hundredth of a share of Preferred Stock and the number of
one one-hundredth of a share of Preferred Stock which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the number of
one one-hundredth of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall use all reasonable efforts to take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue, fully paid and
nonassessable, such number of one one-hundredth of a share of Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date of the number of one one-hundredth of a share of Preferred
Stock or other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of one one-hundredth of a
share of Preferred Stock 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 xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in its good faith judgment the
Board shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof) or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale or transfer, the
stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received
a distribution of Rights previously owned by such Person or any of its
Associates and Affiliates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any
such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such
event by a fraction, the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior the occurrence of the
event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such
event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate and (c) if a Distribution Date has occurred, mail or cause the
Rights Agent to mail a brief summary thereof to each record holder of a
Rights Certificate (or, if prior to the Distribution Date, to each record
holder of a certificate representing shares of Common Stock) in accordance
with Section 26 hereof. Notwithstanding the foregoing sentence, the failure
of the Company to prepare such certificate or statement or make such
filings or mailings shall not affect the validity of, or the force or
effect of, the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow or Earning Power.
(a) In the event (a "Section 13 Event") that, directly or
indirectly, (x) the Company shall consolidate or otherwise combine with, or
merge with or into, any other Person or Persons (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof) and
the Company shall not be the continuing or surviving corporation of such
consolidation, combination or merger, (y) any Person or Persons (other than
a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate or otherwise combine with, or merge with or
into, the Company and the Company shall be the continuing or surviving
corporation of such consolidation, combination or merger and, in connection
with such consolidation, combination or merger, all or part of the
outstanding shares of Common Stock of the Company shall be changed into or
exchanged for stock or other securities of any other Person or Persons or
cash or any other property or the shares of Common Stock held by
stockholders of the Company immediately prior to the consummation of the
transaction which remain outstanding shall constitute less than 50% of the
total number of shares of Common Stock outstanding immediately following
consummation of the transaction, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets,
cash flow or earning power aggregating more than 50% of the assets, cash
flow or earning power of the Company and its Subsidiaries (taken as a whole
and calculated on the basis of the Company's most recent regularly prepared
financial statements) to any Person or Persons (other than the Company or
any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof); then, and in each such case (except as
may be contemplated by Section 13(d) hereof), proper provision shall be
made so that: (i) each holder of a Right, except as provided in Section
7(e) hereof, shall, on or after the later of (A) the date of the first
occurrence of any such Section 13 Event or (B) the date of the expiration
of the period within which the Rights may be redeemed pursuant to Section
23 hereof (as the same may be extended pursuant to Section 23(a) hereof or
amended pursuant to Section 27 hereof), thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable
shares of Common Stock of the Principal Party, not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-hundredth of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of one
one-hundredth of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to such
first occurrence), and (2) dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by
50% of the Current Market Price per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; (ii)
the shares of Common Stock of such Principal Party received by each holder
of a Right upon exercise of that Right shall be fully paid and
nonassessable; (iii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (iv) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a
Section 13 Event; (v) such Principal Party shall take such steps
(including, without limitation, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the exercise of the
Rights; and (vi) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a) hereof, (A)
the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted, changed or exchanged in
such merger, consolidation or combination (or, if there is more than
one such issuer, the issuer the Common Stock of which has the
greatest market value) or (B) if no securities are so issued, the
Person that is the other party to such merger (and survives the
merger), consolidation or combination (or, if there is more than one
such Person, the Person the Common Stock of which has the greatest
market value), or if the other party to the merger does not survive
the merger, the Person that does survive the merger (including the
Company, if it survives); and
(ii)in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets, cash
flow or earning power transferred pursuant to such transaction or
transactions or, if each Person that is a party to such transaction
or transactions receives the same portion of the assets, cash flow or
earning power so transferred or if the Person receiving the greatest
portion of the assets, cash flow or earning power cannot be
determined, whichever of such Persons is the issuer of Common Stock
having the greatest market value;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer
to such other Person; (2) if the Common Stock of such Person is not and has
not been so registered and such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value; and (3) if the Common Stock of such Person
is not and has not been so registered and such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
(1) and (2) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a Subsidiary of both
or all of such joint venturers, and the Principal Parties in each such
chain shall bear the obligations set forth in this Section 13 in the same
ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement confirming that the requirements of Section 13(a) and Section
13(b) hereof shall promptly be performed in accordance with their terms and
that such Section 13 Event shall not result in a default by the Principal
Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Section 13(a), Section 13(b) hereof and further
providing that, as soon as practicable after the date of any such Section
13 Event, the Principal Party will:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its
best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date and to similarly comply with
applicable state securities laws;
(ii) use its best efforts to list or obtain quotation
of (or continue the listing or quotation of) the Rights and the
securities purchasable upon exercise of the Rights on a national
securities exchange or by an automated quotation service;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange
Act; and
(iv) use its best efforts to obtain waivers of any
rights of first refusal or preemptive rights in respect of the shares
of Common Stock of the Principal Party subject to purchase upon
exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, combinations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
Subparagraph (x) or (y) of this Section 13(a) if (i) such transaction is
consummated with a Person or Persons, or a wholly owned subsidiary of any
such Person or Persons, who acquired shares of Common Stock pursuant to a
Qualifying Offer (as such term is defined in Section 11(a)(ii) hereof),
(ii) the price per share of Common Stock offered in such transaction is not
less than the price per share of Common Stock paid to all holders of shares
of Common Stock whose shares were purchased pursuant to such Qualifying
Offer and (iii) the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such transaction is the same
as the form of consideration paid pursuant to such Qualifying Offer. Upon
consummation of any such transaction contemplated by this Section 13(d),
all Rights hereunder shall expire.
(e) The Company covenants and agrees not to consummate a
transaction constituting a Section 13 Event, unless a Distribution Date
shall have occurred as a result of the actions described in clauses (i) or
(ii) of Section 3(a) hereof or as a result of the Board taking all actions
as may be necessary to cause Rights Certificates to be distributed as
contemplated by clause (iii) of Section 3(a) hereof.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Sections 11(i)
and (p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of any such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any Trading
Day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system or The Nasdaq National
Market with respect to securities listed on another principal national
securities exchange or quoted by The Nasdaq National Market, respectively,
or if the Rights are not listed or admitted to trading on any national
securities exchange or quoted by The Nasdaq National Market, 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 Nasdaq
Stock Market or such other quotation system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board. If on any such date no
such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board, shall be
used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock, unless, at
the Company's option, the Company issues depositary receipts therefor) upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock, unless, at the Company's option, the
Company issues depositary receipts therefor. In lieu of issuing fractional
shares of Preferred Stock, the Company may, at its election, issue
depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that the holders of such depositary receipts shall have all of
the rights, privileges and preferences to which they would be entitled as
beneficial owners of Preferred Stock. With respect to fractional shares
that are not integral multiples of one one-hundredth of a share of
Preferred Stock, if the Company does not issue such fractional shares or
depositary receipts in lieu thereof, there shall be paid to the registered
holders of Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of the current
market value of one one-hundredth of a share of Preferred Stock. For
purposes of this Subsection 14(b), the current market value of one
one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (or, if unavailable, the
appropriate alternative price (in each case, as determined pursuant to
Section 11(d)(ii) hereof)) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one share of
Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price of one share of
Common Stock, or if unavailable, the appropriate alternative price (in each
case, as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of that Right
expressly waives such holder's right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in the holder's own behalf and for the holder's own benefit,
enforce, and may institute and maintain, any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, the
holder's right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock
of the Company;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates contained therein duly
executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
certificate for Common Stock) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificate or the associated
certificate for Common Stock made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be
required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or by reason of any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its reasonable best efforts to
have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
one one-hundredth of a share of Preferred Stock or any other securities of
the Company which may at any time be issuable upon the exercise of the
Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, reimbursement for its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without gross negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in good faith in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company or upon any instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document
reasonably believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer or other
stockholder 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, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. If at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and if
at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and if at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all
such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of Current Market Price) be proved
or established by the Company prior to taking or suffering 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 the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates, nor shall it be required to verify the same
(except as to its countersignature on such Rights Certificates), but all
such statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereon); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Sections 11, 13 or 24 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock of the Company to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any
shares of Common Stock or Preferred Stock of the Company will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent 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 the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer. 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 by, or omission
of, the Rights Agent under this Agreement and the date on or after which
such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken 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 5 Business Days after the date the Company actually receives such
application, unless the Company shall have consented in writing to an
earlier date) unless, prior to taking any such action (or prior to 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 or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company, become pecuniarily interested in any
transaction in which the Company may be interested, contract with or lend
money to the Company or otherwise act as fully and freely as though the
Rights Agent were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, however, reasonable
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other than
internal costs incurred by the Rights Agent in providing services to the
Company in the ordinary course of its business as Rights Agent) or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
or clause 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock and Preferred Stock of the Company,
by registered or certified mail and to the holders of the Rights
Certificates, if any, by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing
mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock and Preferred Stock of the
Company, by registered or certified mail and to the holders of the Rights
Certificates, if any, 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
holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. If no successor
Rights Agent shall have been appointed within 30 days from the
effectiveness of such removal, resignation or incapacity and no registered
holder of any Rights Certificate has applied pursuant to this Agreement for
the appointment of a new Rights Agent, the Company automatically shall be
designated as successor Rights Agent. Any successor Rights Agent appointed
by the Company or by such a court shall be (a) a corporation organized and
doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the
State of New York), in good standing, having a principal office in the
State of New York, which is authorized to do business as a banking
institution in such state, is authorized under such laws to exercise
corporate trust powers, is subject to supervision or examination by federal
or state authority and has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an Affiliate
of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder and shall execute and deliver, if
applicable, any further assurance, conveyance, act or deed necessary for
that purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock and the Preferred
Stock of the Company and shall mail a notice thereof in writing to the
registered holders of the Rights Certificates, if any. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights Certificates 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 and the number or kind or
class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock of the Company following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock of the Company so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement
or upon the exercise, conversion or exchange of securities hereafter issued
by the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if
and to the extent that the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate
would be issued and (ii) no such Rights Certificate shall be issued if and
to the extent that appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by the Board
before the Rights cease being redeemable) following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior to the
Record Date, the Close of Business on the tenth Business Day following the
Record Date) or (ii) the Final Expiration Date, direct the Company to, and
if directed, the Company shall, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
The Company may, at its option, pay the Redemption Price in shares of
Common Stock of the Company (based on the Current Market Price of the
Common Stock of the Company at the time of redemption), cash or any other
form of consideration deemed appropriate by the Board. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board directing the
Company to make the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the
Board directing the Company to make the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to each such
holder at such holder's last address as it appears upon the registry books
of the Rights Agent, or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made,
unless notice is mailed together with such payment.
Section 24. Exchange
(a) The Board may, at its option, at any time after the first
occurrence of a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary,
or any entity holding Common Stock for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Stock (or Equivalent Preferred
Stock, as such term is defined in paragraph (b) of Section 11 hereof) for
Common Stock exchangeable for Rights, at the initial rate of one
one-hundredth of a share of Preferred Stock (or Equivalent Preferred Stock)
for each share of Common Stock, as appropriately adjusted to reflect stock
splits, stock dividends and other similar transactions after the date
hereof.
(d) In the event that the number of shares of Common Stock
which are authorized by the Company's Certificate of Incorporation, as
amended, but which are not outstanding or reserved for issuance for
purposes other then upon exercise of the Rights is not sufficient to permit
any exchange of Rights as contemplated in accordance with this Section 24,
the Board shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the
purposes of this Subsection (e), the current market value of a whole share
of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular periodic cash dividend out
of earnings or retained earnings of the Company), (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Stock (other than a reclassification
involving only the subdivision or split of outstanding shares of Preferred
Stock), (iv) to effect any consolidation, combination or merger into or
with any other Person or Persons (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one transaction or a series of
related transactions, of 50% or more of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company or any of its Subsidiaries in one
or more transactions each of which complies with Section 11(o) hereof) or
(v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
combination, merger, sale, transfer, liquidation, dissolution or winding up
is to take place and the date of participation therein by the holders of
the shares of Common Stock or Preferred Stock of the Company, if any such
date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the shares of Common Stock or
Preferred Stock of the Company for purposes of such action, and in the case
of any such other action, at least 20 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders
of the shares of Common Stock or Preferred Stock of the Company, whichever
shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then (i) the
Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible in accordance with Section 26
hereof, a notice of the occurrence of such event which notice shall specify
the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding
Paragraph to Preferred Stock of the Company shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, to other securities.
(c) The failure of the Company to give any notice provided for
in this Section 25, or any defect therein, shall not (i) relieve the
Company of any of its other obligations under this Agreement or (ii) affect
the legality or validity of the action for which notice was hereby
required.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights 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 by the Rights Agent with the Company) as
follows:
Western Gas Resources, Inc.
00000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq. and
Xxxxxxx X. Xxxxxxxx, Esq.
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Rights Agent
with the Company) as follows:
Fleet National Bank
c/o EquiServe, L.P.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry books of
the Company.
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, and subject to the
penultimate sentence of this Section 27(a), the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including, without limitation, any extension of the period in which the
Rights may be redeemed, any increase in the Purchase Price and any
extension of the Final Expiration Date) without the approval of any holders
of certificates representing shares of Common Stock. From and after the
Distribution Date, and subject to the penultimate sentence of this Section
27(a), the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement, so long as the duties, liabilities and
indemnification of the Rights Agent are not affected, without the approval
of any holders of Rights Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, that
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed, or to modify the ability (or inability) of the
Board to redeem the Rights, in either case at such time as the Rights are
not then redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than an Acquiring
Person or any Affiliate or Associate of an Acquiring Person).
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment to this Agreement shall be made which changes the
Redemption Price or the number of one one-hundredth of a share of Preferred
Stock for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
(b) Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock of the Company outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of the Company of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right
and power to (a) interpret the provisions of this Agreement and (b) make
all determinations deemed necessary or advisable for the administration of
this Agreement (including, without limitation, a determination to redeem or
not redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, without
limitation, for purposes of clause (y) below, all omissions with respect to
the foregoing) which are done or made by the Board or the Company in good
faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board to any liability to the holders of the Rights or
otherwise.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common
Stock of the Company) any legal or equitable right, remedy or claim under
this Agreement, but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock of the Company).
Section 31. 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; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth Business Day following the date of such
determination by the Board. Without limiting the foregoing, if any
provision of this Agreement requiring that a determination be made by less
than the entire Board (or at a time or with the concurrence of a group of
directors consisting of less than the entire Board) is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the entire Board in
accordance with applicable law and the certificate of incorporation and
bylaws of the Company, each as then in effect.
Section 32. Governing Law. The validity, enforceability,
interpretation and performance of this Agreement, each Right and each
Rights Certificate issued hereunder shall be governed by and construed in
accordance with the laws of the State of Delaware, applicable to contracts
made and to be performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts, and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. 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, all as of the day and year first above
written.
Attest: WESTERN GAS RESOURCES, INC .
By /s/ Xxxxx X. Xxxxxxx By /s/ Xxxx X. Xxxxxx
-------------------------- -------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxx
Title: Assistant Secretary Title: Executive Vice President
FLEET NATIONAL BANK
Attest: as Rights Agent
By /s/ Xxxxxx Xxxxxxx By /s/ Xxxxxxx X. Xxxxxx
-------------------------- -------------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Account Manager Title: Managing Director
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
WESTERN GAS RESOURCES, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned officers of Western Gas Resources, Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware (the "Corporation"), in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation, as amended, of the said
Corporation (the "Certificate of Incorporation"), the said Board of
Directors on March 22, 2001, adopted the following resolution creating a
series of 500,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" and
the number of shares constituting such series shall be 500,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par value
$.10 per share, of the Corporation (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 Series A Junior Participating Preferred
Stock. In the event the Corporation shall at any time after March 22, 2001
(the "Rights Dividend Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Junior Participating Preferred Stock as provided in Paragraph
(A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares
of Common Stock); provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share on the Series A Junior
Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series A Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
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 Series A Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to 100 votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the Corporation shall
at any time after the Rights Dividend Declaration Date (i) declare or pay
any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of Series A Junior
Participating 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 by law or by the
provisions of the Certificate of Incorporation, as amended from time to
time, the holders of shares of Series A Junior Participating Preferred
Stock and the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal
to six (6) quarterly dividends thereon, the occurrence of such
contingency shall xxxx the beginning of a period (herein called a
"default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to
elect two (2) directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders
of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of directors shall be exercised
unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy.
The absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such voting
right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default
period, they shall have the right, voting as a class, to elect
directors to fill such vacancies, if any, in the Board of Directors
as may then exist up to two (2) directors or, if such right is
exercised at an annual meeting, to elect two (2) directors. If the
number which may be so elected at any special meeting does not amount
to the required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of directors as shall
be necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised their
right to elect directors in any default period and during the
continuance of such period, the number of directors shall not be
increased or decreased except by vote of the holders of Preferred
Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right to
elect directors, the Board of Directors may order, or any stockholder
or stockholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of the holders of Preferred Stock, which meeting shall thereupon be
called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at
which holders of Preferred Stock are entitled to vote pursuant to
this Paragraph (C)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last
address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days and not
later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request,
such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%)
of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this Paragraph (C)(iii), no such
special meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting of
the stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of directors until
the holders of Preferred Stock shall have exercised their right to
elect two (2) directors voting as a class, after the exercise of
which right (x) the directors so elected by the holders of Preferred
Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as
provided in Paragraph (C)(ii) of this Section 3) be filled by vote of
a majority of the remaining directors theretofore elected by the
holders of the class of stock which elected the director whose office
shall have become vacant. References in this Paragraph (C) to
directors elected by the holders of a particular class of stock shall
include directors elected by such directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
directors shall cease, (y) the term of any directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of directors shall be such number as may be provided for in
the certificate of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of Paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change thereafter
in any manner provided by law or in the certificate of incorporation
or by-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining directors.
(D) Except as set forth herein, or as otherwise provided by
law, holders of Series A Junior Participating 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 Series A Junior Participating 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 Series A Junior Participating Preferred Stock outstanding shall have
been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on 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
Series A Junior Participating Preferred Stock, except dividends paid
ratably on the Series A Junior Participating 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 on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under Paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating 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 in the Certificate of
Incorporation or in any Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
capital stock of the Company ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares
of Series A Junior Participating Preferred Stock shall have received an
amount equal to $100 per share of Series A Participating Preferred Stock,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series
A Liquidation Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by
(ii) 100 (as appropriately adjusted as set forth in subparagraph (C) below
to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series A Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred
Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Junior Participating
Preferred Stock, then such remaining assets shall be distributed ratably to
the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Dividend Declaration Date (i) declare or pay any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such
Adjustment 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.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Junior Participating Preferred
Stock shall at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after the Rights Dividend Declaration Date
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 than
by payment of a dividend in shares of Common Stock) 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 Series A Junior Participating 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. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred
Stock as to the payment of dividends and the distribution of assets, unless
the terms of any such series shall provide otherwise.
Section 10. Amendment. At any time when any shares of Series A
Junior Participating Preferred Stock are outstanding, neither the
Certificate of Incorporation nor this Certificate of Designation shall be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating
Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding shares of Series A
Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Junior Participating
Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury this ___ day of ______, 2001.
WESTERN GAS RESOURCES, INC.
___________________________
Name:
Title:
Attest:
____________________________
Name:
Title:
Exhibit B
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER March 22, 2011, SUBJECT TO EARLIER REDEMPTION OR
EXPIRATION PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. THE RIGHTS EVIDENCED BY THIS CERTIFICATE
SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN
ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION FOR THE ISSUANCE TO SUCH
HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION
SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RENEWED
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO IS, WAS OR BECAME AN ACQUIRING PERSON OR
AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RENEWED RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(E) OF SUCH AGREEMENT.]*
------------
* The portion of the legend in brackets shall be inserted only if
applicable, shall be modified to apply to an Acquiring Person, as
applicable, and shall replace the preceding sentence.
RIGHTS CERTIFICATE
WESTERN GAS RESOURCES, INC.
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the
Rights Agreement, dated as of March 22, 2001, as amended, restated, renewed
or extended from time to time (the "Rights Agreement"), between Western Gas
Resources, Inc., a Delaware corporation (the "Company"), and Fleet National
Bank (f/k/a Bank Boston, NA) (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M., New York City time, on March 22,
2011 at the office or offices of the Rights Agent, or its successors as
Rights Agent, designated for such purpose, one one-hundredth of a fully
paid, nonassessable share of Series A Junior Participating Preferred Stock
of the Company (the "Preferred Stock"), at a purchase price of $180 per
share (the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and included
Certificate duly completed and executed. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of March 22, 2001, based on the
Preferred Stock as constituted at such date. The Company reserves the right
to require prior to the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement) that a number of Rights be exercised so
that only whole shares of Preferred Stock will be issued. The holder of the
Right evidenced hereby consents and agrees that, subject to the terms of
the Rights Agreement, the Company and the Rights Agent may deem and treat
the person in whose name this Rights Certificate is registered as the
absolute owner hereof and of the Rights evidenced hereby (notwithstanding
any notations of ownership or writing on this Rights Certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be required
to be affected by any notice to the contrary.
As more fully set forth in the Rights Agreement, from and after
the first occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person (as such terms are defined in
the Rights Agreement), which is determined to have been involved in or
caused or facilitated, directly or indirectly, such Section 11(a)(ii)
Event, (ii) a transferee of such Acquiring Person (or of any such Associate
or Affiliate), or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of such Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with such
Acquiring Person becoming such, such Rights shall become null and void
without any further action, and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event, whether under the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events (as such term is defined in
the Rights Agreement).
This Rights 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 Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Reference is also made to
the Rights Agreement for definitions of capitalized terms used and not
defined herein. Copies of the Rights Agreement are on file at the principal
office of the Rights Agent and are also available upon written request to
the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one
one-hundredth of a share of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right at any time prior to the earlier of
(i) the Close of Business on the tenth Business Day following the Stock
Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement) and (ii) the Final Expiration Date (as such term is
defined in the Rights Agreement). In addition, under certain circumstances
following the Stock Acquisition Date, the Rights may be exchanged, in whole
or in part, for shares of the Common Stock, or shares of preferred stock of
the Company having essentially the same value or economic rights as such
shares. Immediately upon the action of the Board of Directors of the
Company authorizing any such exchange, and without any further action or
any notice, the Rights (other than Rights which are not subject to such
exchange) will terminate and the Rights will only enable holders to receive
the shares issuable upon such exchange.
If the Company so determines, no fractional shares of Preferred
Stock will be issued upon the exercise of any Right or Rights evidenced
hereby, (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts), but in lieu thereof, a
cash payment will be made, as provided in the Rights Agreement. The
Company, at its election, may require that a number of Rights be exercised
so that only whole shares of Preferred Stock would be issued.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the
holder of shares of Common Stock or Preferred Stock or of any other
securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
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 consent to or withhold consent from 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 Rights Certificate shall have been exercised as provided
in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company.
Dated as of ____________, ____
ATTEST: WESTERN GAS RESOURCES, INC.
___________________________ By ______________________________
Secretary Name:
Title:
Countersigned:
FLEET NATIONAL BANK,
as Rights Agent
By ________________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ________________________________________________________
hereby sells, assigns and transfers unto __________________________________
___________________________________________________________________________
(Please print name and address of transferee)
___________________________________________________________________________
this Rights Certificate, together with all right, title and interest
herein, and does hereby irrevocably constitute and appoint ____ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _____________, ____
___________________________
Signature
Signature Medallion Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person, or an Associate or Affiliate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Associate or Affiliate of an
Acquiring Person.
Dated: ____________, ______ _____________________________
Signature
Signature Medallion Guaranteed:
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: Western Gas Resources, Inc.
The undersigned hereby irrevocably elects to exercise _________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person which may be issuable or
such other assets which may be deliverable upon the exercise of the Rights)
and requests that certificates for any such shares or securities be issued
in the name of and delivered to:
Please insert social security
or other identifying number _____________________
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number _______________
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
Dated: ____________, ______
_________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Associate or Affiliate of any such Acquiring Person
(as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Associate or Affiliate of an Acquiring Person.
Dated: __________, _________ _____________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On March 22, 2001, the Board of Directors of Western Gas
Resources, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Company Common Stock to stockholders of
record at the close of business on April 9, 2001 (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company a unit
consisting of one one-hundredth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $.10 per share (the "Preferred
Stock"), at a Purchase Price of $180 per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement"), dated as of March 22, 2001, between the Company
and Fleet National Bank (f/k/a Bank Boston, NA), as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified
in the Rights Agreement, the Rights will separate from the Common Stock and
a Distribution Date will occur upon the earliest of (i) the tenth business
day following the date (the "Stock Acquisition Date") of the first public
announcement by the Company that any person or group has become the
beneficial owner of 15% or more shares of the Common Stock then outstanding
(other than the Company, any subsidiary of the Company, and any employee
benefit plan of the Company or any subsidiary, certain persons who
inadvertently beneficially own more than 15% of the Common Stock), (ii) the
tenth business day following the commencement of a tender or exchange offer
if, upon its consummation, the offeror would become the beneficial owner of
15% or more of the Common Stock then outstanding, or (iii) a merger or
other business combination transaction involving the Company. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for
Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. Pursuant
to the Rights Agreement, the Company reserves the right to require prior to
the occurrence of a Triggering Event (as defined below) that, upon any
exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M. New York City time on March 22, 2011, unless
earlier redeemed, exchanged, extended or terminated by the Company as
described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person (except
pursuant to an offer for all outstanding shares of Common Stock which the
disinterested directors determine to be fair and not inadequate to and to
otherwise be in the best interests of the Company and its stockholders,
after receiving advice from one or more investment banking firms (a
"Qualifying Offer")), each holder of a Right will thereafter have the right
to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to
two times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this
Paragraph, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person
will be null and void. However, Rights are not exercisable following the
occurrence of the event set forth above until such time as the Rights are
no longer redeemable by the Company as set forth below.
For example, at an exercise price of $180 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding Paragraph would entitle its holder to
purchase $360 worth of Common Stock (or other consideration, as noted
above) for $180. Assuming that the Common Stock had a per share value of
$60 at such time, the holder of each valid Right would be entitled to
purchase 6 shares of Common Stock for $180.
In the event that (i) the Company is acquired in a merger
(other than a "clean-up" merger which follows a Qualifying Offer) or other
business combination transaction (x) in which the Company is not the
surviving entity, (y) in which the Company is the surviving entity and the
Common Stock is changed or exchanged or the Common Stock remains
outstanding but constitutes less than 50% of the shares outstanding
immediately following the merger, or (ii) 50% or more of the Company's
assets, cash flow or earning power is sold or transferred, each holder of a
Right (except Rights which have previously been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of
the acquiring company having a value equal to two times the exercise price
of the Right. The events set forth in this Paragraph and in the second
preceding Paragraph are referred to as the "Triggering Events."
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or
more of the outstanding Common Stock, the Board may exchange the Rights
(other than Rights owned by such person or group which have become void),
in whole or in part, at an exchange ratio of one share of Common Stock, or
one one-hundredth of a share of Preferred Stock (or of a share of a class
or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
At any time until 10 business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately
upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 redemption price.
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. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company or in the event of the redemption of the Rights as set
forth above.
Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights, or to shorten
or lengthen any time period under the Rights Agreement. The foregoing
notwithstanding, no amendment may be made at such time as the Rights are
not redeemable.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
