THE GOLDFIELD CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
Rights Agreement
Dated as of September 18, 2002
TABLE OF CONTENTS
Page
Section 1. Certain Definitions..............................................1
Section 2. Appointment of Rights Agent......................................4
Section 3. Issue of Rights Certificates.....................................4
Section 4. Form of Rights Certificates......................................6
Section 5. Countersignature and Registration................................7
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.....................................................7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....8
Section 8. Cancellation and Destruction of Rights Certificates.............10
Section 9. Reservation and Availability of Capital Stock; Registration of
Securities......................................................10
Section 10. Capital Stock Record Date.......................................11
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights................................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................20
Section 14. Fractional Rights and Fractional Shares.........................23
Section 15. Rights of Action................................................24
Section 16. Agreement of Rights Holders.....................................24
Section 17. Rights Certificate Holder Not Deemed a Stockholder..............25
Section 18. Concerning the Rights Agent.....................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......26
Section 20. Duties of Rights Agent..........................................26
Section 21. Change of Rights Agent..........................................28
Section 22. Issuance of New Rights Certificates.............................29
Section 23. Redemption and Termination......................................29
Section 24. Notice of Certain Events........................................32
Section 25. Notices.........................................................33
Section 26. Supplements and Amendments......................................33
Section 27. Successors......................................................34
Section 28. Determinations and Actions by the Board of Directors, etc.......34
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Section 29. Benefits of this Agreement......................................35
Section 30. Severability....................................................35
Section 31. Governing Law...................................................35
Section 32. Counterparts....................................................35
Section 33. Descriptive Headings............................................36
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Rights Certificate
Exhibit C - Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 18, 2002 (the "Agreement"), between
The Goldfield Corporation, a Delaware corporation (the "Company"), and American
Stock Transfer & Trust Company, a New York corporation, as rights agent (the
"Rights Agent").
W I T N E S S E T H :
WHEREAS, on September 17, 2002 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of common stock, $0.10 par value, of
the Company (the "Common Stock") outstanding at the Close of Business on
September 18, 2002 (the "Record Date"), and has authorized the issuance of one
Right (as such number may be hereinafter adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of the Company issued or
delivered (whether originally issued or delivered from treasury) between the
Record Date and the Distribution Date (as such term is hereinafter defined) and
as otherwise provided herein, each Right initially representing the right to
purchase one one-thousandth of a share of Preferred Stock (as hereinafter
defined) upon the terms and subject to the conditions hereinafter set forth
(individually a "Right" and collectively the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of 20% or
more of the shares of Common Stock then outstanding, but shall not include (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 dividend reinvestment plan of the Company or (v) any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Stock by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20% or more
of the Common Stock of the Company then outstanding; provided, however, that if
a Person shall become the Beneficial Owner of 20% or more of the Common Stock of
the Company then outstanding by reason of such an acquisition and shall, after
such acquisition, become the Beneficial Owner of any additional shares of Common
Stock, then such Person shall be deemed to be an "Acquiring Person".
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Agreement.
(c) 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, has the right or obligation to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange rights,
rights warrants or options, or otherwise; provided, however, that a person
shall not be deemed the "Beneficial Owner" of or to "beneficially own", (A)
securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) at any time prior to
the occurrence of a Triggering Event, securities issuable upon exercise of
the Rights or (C) from and after the occurrence of a Triggering Event,
securities issuable upon exercise of Rights which were acquired by such
person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(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
General Rules and Regulations under the Exchange Act and any successor
provision thereof), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of or to "beneficially own", any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) 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), but excluding
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities until the
expiration of forty (40) days after the date of such acquisition, for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this paragraph (c)) or
disposing of any voting securities of the Company.
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(d) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the States of New York or Delaware are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 p.m., New York
time, on such date; provided, however, that if such date is not a Business Day,
it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock, $0.10 par value, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital shares of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(h) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(i) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(j) "Independent Director" shall have the meaning set forth in Section
28(b) hereof.
(k) "Independent Directors Committee" shall have the meaning set forth in
Section 28(b) hereof.
(l) "Offer Date" shall have the meaning set forth in Section 23(c)(i)
hereof.
(m) "Offeror" shall have the meaning set forth in Section 23(e) hereof.
(n) "Person" shall mean any individual, firm, corporation, partnership or
other entity.
(o) "Preferred Stock" shall mean shares of Series B Participating Preferred
Stock, $1 par value, of the Company having the rights and preferences set forth
in the form of Certificate of Designations attached to this Agreement as Exhibit
A.
(p) "Preferred Stock Fraction" shall mean one one-thousandth of a share of
Preferred Stock.
(q) "Qualifying Offer" shall have the meaning set forth in Section 23(e)
hereof.
(r) "Record Date" shall have the meaning set forth in the first Whereas
clause.
(s) "Resolution" shall have the meaning set forth in Section 23(c)(i)
hereof.
(t) "Section 11(a)(ii) Event" shall mean the event described in Section
11(a)(ii) hereof.
(u) "Section 13 Event" shall mean any event described in clause (x), (y) or
(z) of Section 13(a) hereof.
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(v) "Special Meeting" shall have the meaning set forth in Section 23(c)(i)
hereof.
(w) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person, that an Acquiring Person has become such.
(x) "Subsidiary" shall mean, with reference to any other Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power, in the absence of contingencies, to elect at least
a majority of the directors or other persons performing similar functions is
beneficially owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(y) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
(z) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(aa) "Voting Stock" shall mean the Common Stock and any other class or
series of stock of the Company entitled to vote generally in the election of
directors of the Company, disregarding votes that may be cast only by such class
or series of stock (other than Common Stock and any other class or series of
stock to the extent that such other class or series is entitled to vote together
as one class with the Common Stock) upon the happening of a contingency.
Unless otherwise specified, where reference is made in this Agreement to
sections of, and the General Rules and Regulations under, the Exchange Act, such
reference shall mean such sections and rules as amended from time to time and
any successor provisions thereto.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates. (a) Until Close of Business on the
earlier of (i) the Close of Business on the tenth day after the Stock
Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs
before the Record Date, the Close of Business on the Record Date) or (ii) the
Close of Business on the tenth Business Day (or such later date as may be
determined by the Company's Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan or employee stock plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
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provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates and (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, postage prepaid
mail, to each record holder of the Common Stock as of the Close of Business on
the Distribution Date, at the address of such holder shown on the records of the
Company, one or more Rights Certificates, in substantially the form of Exhibit B
hereto (individually a "Rights Certificate" and collectively the "Rights
Certificates"), 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(p) hereof, at the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by Rights Certificates.
(b) Following the Record Date, upon the written request of a record holder
of Common Stock, or of a holder of Rights after the Distribution Date, the
Company will send to such holder a copy of a Summary of Rights to Purchase
Preferred Stock, in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage prepaid mail, at the holder's
address shown on the records of the Company. With respect to certificates for
the Common Stock outstanding on or after the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the Common Stock
with or without a copy of the Summary of Rights attached thereto 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 with or without a copy of the Summary of Rights attached thereto in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock which
are issued after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates issued after the Record Date, but
prior to the earlier of the Distribution Date or the Expiration Date, shall also
be deemed to be Certificates for Rights and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between The Goldfield
Corporation and American Stock Transfer & Trust Company, dated as of
September 18, 2002 (as it may be amended, modified or supplemented 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 Goldfield Corporation. 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 Rights will expire on the Close of Business on September
18, 2012 unless redeemed prior thereto. The Goldfield Corporation 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
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therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (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.
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 and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of 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 (or, in the case of
Rights issued with respect to Common Stock issued by the Company after the
Record Date, as of the date of issuance of such Common Stock), shall note the
date of issuance and on their face shall entitle the holders thereof to purchase
such number of Preferred Stock Fractions as shall be set forth therein at the
price set forth therein (such exercise price per Preferred Stock Fraction, the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by: (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 plan, agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, agreement, arrangement or understanding which
has as a primary purpose or effect the avoidance 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 was or became an Acquiring Person or an Affiliate or
Associate of an
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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.
The provisions of Section 7(e) of this Agreement shall be operative whether
or not the foregoing legend is contained on any such Rights Certificates.
Section 5. Countersignature and Registration. (a) The Rights Certificates
shall be executed on behalf of the Company by its President, Vice- President or
Secretary, either manually or by facsimile signature. The Rights Certificates
shall be countersigned manually by the Rights Agent, 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 the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; 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 such purpose, 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 certificate number of each 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 may be transferred, split up, combined or exchanged for another
Rights Certificate or certificates, entitling the registered holder to purchase
(or receive) a like number of Preferred Stock Fractions (or, following a
Triggering Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then entitled
such holder or holders in the case of a transfer to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment set forth on the reverse side of each such Rights Certificate and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b),
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Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment from the holder of the
Right of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein 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 set
forth on the reverse side thereof 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 (except as provided in Section 11(q)) with respect to the
surrendered Rights for the total number of the Preferred Stock Fractions (or
Common Stock, other securities or property, as the case may be) as to which such
surrendered Rights are exercisable, at or prior to the earlier of (i) the Close
of Business on September 18, 2012 (the "Final Expiration Date") or (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) or (ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each Preferred Stock Fraction pursuant to the
exercise of a Right shall initially be $2.20, and shall be subject to adjustment
from time to time as provided in Section 11 and Section 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 set forth on the reverse side thereof and
the certificate contained therein duly executed, accompanied by payment (except
as provided in Section 11(q)), with respect to each Right so exercised, of the
Purchase Price per Preferred Stock Fraction (or Common Stock, other securities
or property, as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) and Section 14(b) 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 the shares of Preferred Stock)
certificates for the total number of Preferred Stock Fractions to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests subject to applicable law, 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
8
a depositary agent, requisition from the depositary agent depositary receipts
representing such number of Preferred Stock Fractions as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made (x)
in cash or by certified bank check or money order payable to the order of the
Company, or (y) by delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing a number of shares
of Common Stock equal to the then Purchase Price divided by the current market
price (as determined pursuant to Section 11(d) hereof) per share of Common Stock
on the date of such exercise. 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 Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to 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 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 the
Acquiring Person has any continuing plan, agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of an plan, agreement,
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 insure 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 its Affiliates, Associates or transferees hereunder.
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(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) 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; Registration of
Securities. (a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (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 treasury) the number of shares of
Preferred Stock (and following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, except 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 best efforts to cause, from and
after such time as the Rights become exercisable (and the Company reasonably
anticipates that a Right may be exercised), all shares (or other securities)
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined pursuant to this Agreement (including
in accordance with Section 11(a)(iii) hereof), or as soon as is required by law
or regulation following the Distribution Date, as the case may be, a
registration statement or statements under the Securities Act of 1933 (the
"Securities Act"), with respect to the shares of Common Stock or other
securities purchasable upon exercise of the Rights on an appropriate form or
forms, (ii) cause such registration statement or statements to become effective
as soon as practicable after such filing and (iii) cause such registration
statement or statements to remain
10
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the expiration of
the Rights. The Company will also take such action as may be appropriate under,
or to ensure compliance with, the securities or blue sky laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. 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 would be in violation of applicable law.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Stock Fractions (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, issued, fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for a number of Preferred Stock Fractions (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 Preferred Stock
Fractions (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 or to issue or deliver
any certificates for a number of Preferred Stock Fractions (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 Certificates at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Capital Stock Record Date. Each person in whose name any
certificate for a number of Preferred Stock Fractions (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
Preferred Stock Fractions (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 Preferred Stock Fraction (or Common Stock and/or other securities, as
the case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or otherwise)
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock Fraction (or Common Stock and/or other securities, as
the case may be) transfer books of
11
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares (fractional or otherwise) for
which the Rights shall be exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) 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 or other capital stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares or (D) issue any share 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 Section 11(a)(ii) 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, combination or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock, 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 and at a time when the Preferred Stock (or other capital
stock, as the case may be) transfer books of the Company were open, he or she
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination 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 any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan or employee stock plan of the
Company or of any Subsidiary of the Company, any dividend reinvestment plan
of the Company, or any Person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan) alone or
together with its Affiliates and Associates, shall, at any time after the
date hereof, become an Acquiring Person, unless the event causing such
threshold to be crossed is a transaction set forth in Section 13(a) hereof,
or is an acquisition of Common Stock pursuant to a tender offer or exchange
offer for all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the members of the Board of Directors
who are not officers of the Company 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 stockholders (taking into account all factors which such
members of the Board deem relevant including, without limitation, the
long-term prospects and value of the Company and the prices which could
reasonably be achieved if the Company or its
12
assets were sold on an orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of (1) the Company and its stockholders
(including the possibility that these interests may best be served by the
continued independence of the Company), (2) the Company's employees,
suppliers, creditors, customers and (3) the community in which the Company
operates, then, promptly following the first occurrence of the event
described in Section 11(a)(ii) hereof, proper provision shall be made so
that each holder of a Right (except as provided in Section 11(a)(iii) 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 Preferred Stock Fractions,
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 Preferred Stock Fractions for which a Right was exercisable
by such holder immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (such product, following
such first occurrence, shall thereafter be referred to as the Purchase
Price for each Right and for all purposes of this Agreement) by 50% of the
current market price (determined pursuant to Section 11(d) hereof) per
share of Common Stock on the date of such first occurrence (such number of
shares of Common Stock is herein called the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock which are
authorized but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess, the "Spread")
and (B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limitation, preferred
shares or Preferred Stock Fractions), which the Board of Directors of the
Company has deemed to have the same value as shares of Common Stock (such
shares, "common stock equivalents"), (4) debt securities of the Company,
(5) other assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the first occurrence of (x) a
Section 11(a)(ii) Event or (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Common Stock (to
the extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Board of Directors
of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period
set forth above may be extended by resolution of the Board of Directors of
the Company to the extent necessary, but not more than ninety
13
(90) days following the first occurrence of a Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares, to take any action to obtain any
required regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the current market price
(as determined pursuant to Section 11(d) hereof) per share of Common Stock
on the Section 11(a)(ii) Trigger Date and the value of any common stock
equivalents shall be deemed to have the same value as the Common Stock on
such date.
(iv) If the rules of the national securities exchange, registered as
such pursuant to Section 6 of the Exchange Act, or of the national
securities association, registered as such pursuant to Section 15A of the
Exchange Act, on which the shares of Common Stock are principally traded
would prohibit such exchange or association from listing or continuing to
list, or from authorizing for or continuing quotation and/or transaction
reporting through an inter-dealer quotation system, the shares of Common
Stock or other equity securities of the Company if the Rights were to be
exercised for shares of Common Stock in accordance with subparagraph (ii)
of this Section 11(a) because such issuance would nullify, restrict or
disparately reduce the per share voting rights of holders of shares of
Common Stock or for any other reason, the Company shall: (A) determine the
Spread and (B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) equity securities of the Company, including,
without limitation, "common stock equivalents", other than securities which
would have the effect of nullifying, restricting or disparately reducing
the per share voting rights of holders of shares of Common Stock or
otherwise cause the prohibition described above, (3) debt securities of the
Company, (4) other assets or (5) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following 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,
cash having an aggregate value equal to the Spread. To the extent that the
Company determines that an action needs to be taken pursuant to the first
sentence of this Section 11(a)(iv), the Company (x) shall provide, subject
to Section 7(e), that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights, but not longer
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order to
decide the appropriate form of
14
distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this Section
11(a)(iv), the value of the Common Stock shall be the current market price
(as determined pursuant to Section 11(d) hereof) per share of Common Stock
on the Section 11(a)(ii) Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common Stock on
such date.
(b) In case the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock, (or
shares having the same rights, privileges and preferences as the Preferred Stock
("equivalent Preferred Stock")) or securities convertible into Preferred Stock
or equivalent Preferred Stock at a price per share of Preferred Stock or
equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent Preferred Stock) less
than the current market price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or equivalent Preferred Stock to be
offered for subscription or purchase (or onto which the convertible securities
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 of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. 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 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
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend paid 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 capital stock other than Preferred Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock on
such record date, less the fair
15
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness 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 (as determined pursuant to Section 11(d) hereof) 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 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 price per share of Common Stock for the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) 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 price per share of Common Stock for the ten
(10) consecutive Trading Days immediately following such date; provided,
however, that in the event that the then current market price per share of
Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (i) any dividend or distribution on such Common
Stock payable in such shares of Common Stock or securities convertible into
shares of Common Stock (other than the Rights), (ii) any subdivision,
combination or reclassification of such shares of Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, 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 American Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the American Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange, the
last quoted sale price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock, the fair value
of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used 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. If the Common Stock is not publicly held or not so listed or
traded, current market price per share shall mean the fair
16
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(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 Section 11(d)(i) (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
Section 11(d)(i), the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 1,000 (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 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 Preferred Stock shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
"current market price" of a Preferred Stock Fraction shall be equal to the
"current market price" of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) to 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 one ten-thousandth of a share of Common
Stock or other share or one ten-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) three (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) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any capital shares other than Preferred Stock, thereafter
the number of such other shares receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) (m) and (q) hereof, and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Preferred Stock shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Preferred Stock
Fractions (or other consideration, as the case may be) purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
17
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Preferred Stock
Fractions (calculated to the nearest one ten-millionth) obtained by (i)
multiplying (x) the number of Preferred Stock Fractions covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Preferred Stock Fractions 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 Preferred Stock
Fractions 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
hundred-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (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 Preferred Stock Fractions issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per Preferred Stock Fraction and the number of
Preferred Stock Fractions 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 one one-thousandth of the then stated value, if any, of the
number of Preferred Stock Fractions issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly
18
and legally issue fully paid and nonassessable Preferred Stock Fractions at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer, until the occurrence of such event, the
issuance to the holder of any Right exercised after such record date the number
of Preferred Stock Fractions and other capital shares or securities of the
Company, if any, issuable upon such exercise over and above the number of
Preferred Stock Fractions and other capital shares and 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)
of Common Stock and other capital shares or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Board
of Directors shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of 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 holder 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 and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect 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 or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 26 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.
19
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement 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 which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event.
(q) In the event that the Rights become exercisable following a Section
11(a)(ii) Event, the Company by action of a majority of the Board of Directors,
at its option, may provide that each Right, subject to section 7(e), shall be
exchanged for one share of Common Stock (or cash or other securities or assets
to be substituted for the Adjustment Shares pursuant to subsection 11(a)(iii))
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof, in consideration of the surrender
to the Company of the Rights so exercised and without other payment of the
Purchase Price. Upon the Company's election to provide for such exchange, all
Rights shall be terminated and the only right thereafter of a holder of such
Rights shall be to receive the above described securities. Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such exchange
at any time after any Person (other than the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding.
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) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (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 or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company, and
the
20
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o)
hereof), then, and in each such case and except as set forth in Section 13(d)
hereof, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), 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 Preferred Stock Fractions for which a Right is
exercisable by such holder immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the Section 13 Event, multiplying the Purchase Price in effect immediately
prior to the first occurrence of such Section 11(a)(ii) Event by the number
of Preferred Stock Fractions for which a Right was exercisable immediately
prior to such first occurrence) and dividing that product (such product,
following the first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the current market price (determined pursuant to
Section 11(d)(i) hereof with respect to the Common Stock) per share of
Common Stock of such Principal Party on the date of consummation of such
Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may
be necessary to insure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Stock
thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
21
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions; provided, however, that in any such case,
(1) if the Common Stock of such Person is not at such time and has not been
continuously over the preceding twelve (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) in case
such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stock 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) in case 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 ventures 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 such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
authorized shares of 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
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense will:
(i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the Blue Sky laws
of such jurisdictions as may be necessary or appropriate; and
22
(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 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations 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).
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired shares of Common Stock pursuant to a tender offer or exchange offer
for all outstanding shares of Common Stock that complies with the provisions of
Section 11(a)(ii) hereof (or a wholly owned Subsidiary of any such Person or
Persons), (ii) the price per Common Share offered in such transaction is not
less than the price per share of Common Stock paid to all holders of Common
Stock whose shares were purchased pursuant to such tender offer or exchange and
(iii) the form of consideration being offered to the remaining holders of Common
Stock pursuant to such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights, except prior to the Distribution
Date as provided in Section 11(p) hereof, or to distribute Rights Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the American Stock Exchange or, if the Rights
are not listed or admitted to trading on the American Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading, or if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used and shall be conclusive for
all purposes.
23
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than integral multiples of Preferred Stock Fractions)
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than integral multiples of Preferred
Stock Fractions). In lieu of fractional shares of Preferred Stock that are not
Preferred Stock Fractions or integral multiples thereof, 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 a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one share of Preferred Stock shall be the
closing price of a share of Preferred Stock (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 a share of Common Stock (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 the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except those rights of action vested in the Rights Agent pursuant to
Sections 18 through 20 inclusive, 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 his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement. Holders of Rights shall be
entitled to recover the reasonable costs and expenses, including attorneys'
fees, incurred by them in any action to enforce the provisions of this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
24
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall, subject to the last sentence of Section
7(e) hereof, 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 any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a 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 Preferred Stock
Fractions or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any 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 24 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, 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 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
25
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 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, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
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 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. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent 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.
26
(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 prices) 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 or the
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 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 or 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 and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); 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
Section 11 or Section 13 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 actual notice of 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 Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any Common Stock or Preferred Stock 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 any of
the Chairman of the Board, the President, any Vice President, the Treasurer and
the Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
27
(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 or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other 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 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 Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise of 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 thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (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, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (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 any registered
holder of a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized, doing
business and in good standing under the laws of the United States or of the
States of New York or Delaware (or of any other state of the United States so
long as such corporation is authorized to do business in the State of New York
or Delaware), having a principal office in the State of New York or Delaware,
which is authorized
28
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (b) an affiliate of any such corporation
described in clause (a) above. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates or, prior to the Distribution
Date, the registered holders of shares of Common Stock. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (a) shall, with respect to Common Stock 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
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
Section 23. Redemption and Termination. (a) The Rights may be redeemed by
action of the Board of Directors pursuant to subparagraph (b) of this Section 23
or by shareholder action pursuant to subparagraph (c) of this Section 23 and
shall not be redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option, at any time
prior to the earlier of (i) the date on which a Section 11(a)(ii) Event occurs
or (ii) the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.001 per Right, as such amount
shall 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"); and the Company may, at its
option, pay the Redemption
29
Price either in cash or securities or both having a current market price, as of
a date determined by the Board of Directors, of $0.001.
(c) (i) In the event the Company receives a Qualifying Offer (as defined in
subparagraph (e) of this Section 23), the Board of Directors of the Company
shall call a special meeting of shareholders (the "Special Meeting") for the
purpose of voting on a resolution (i) accepting such Qualifying Offer, as such
Qualifying Offer may be amended or revised by the Offeror (as defined in
subparagraph (e) of this Section 23) from time to time to increase the price per
share to be paid to holders of shares of Voting Stock, and (ii) authorizing the
redemption of all but not less than all the then outstanding Rights at the
Redemption Price pursuant to subparagraph (c)(ii) of this Section 23 (the
"Resolution"). The Special Meeting shall be held on a date selected by the Board
of Directors, which date shall not be less than 90 or more than 120 days after
the later of (A) the date such Qualifying Offer is received by the Company (the
"Offer Date") and (B) the date of any previously scheduled meeting of
shareholders to be held within 60 days after the Offer Date; provided, however,
that if (x) such other meeting shall have been called for the purpose of voting
on a resolution with respect to another Qualifying Offer and (y) the Offer Date
is not later than 15 days after the date such other Qualifying Offer was
received by the Company, then both the Resolution and such other resolution
shall be voted on at such meeting (in addition to any other matters or
resolutions to be considered at such meeting) and such meeting shall be deemed
to be the Special Meeting; provided, however, that in any 12-month period the
Company shall not be required to hold more than one Annual Meeting and one
Special Meeting; and provided further, that if the Company shall publicly
announce that the Board of Directors has determined that it is in the best
interest of shareholders to seek an alternative transaction so as to obtain
greater value for shareholders than that provided by such Qualifying Offer, then
such vote shall be postponed to a meeting called by the Board of Directors which
shall occur within 90 days after the date of such announcement. The Board of
Directors shall set a date for determining the shareholders of record entitled
to notice of and to vote at the Special Meeting in accordance with the Company's
Restated Certificate of Incorporation, By-Laws and applicable law. At the
Offeror's request, the Company shall include in any proxy soliciting material
prepared by it in connection with the Special Meeting proxy soliciting material
submitted by the Offeror; provided, however, that the Offeror, by written
agreement with the Company contained in or delivered with such request, shall
have indemnified the Company against any and all liabilities resulting from any
statements found to be defamatory, misstatements, misleading statements or
omissions contained in or omitted from the Offeror's proxy soliciting materials
and have agreed to pay the Company's incremental costs incurred as a result of
including such material in the Company's proxy soliciting material.
Notwithstanding anything to the contrary contained this Agreement, if the Board
of Directors determines that it is in the best interests of shareholders to seek
an alternative transaction so as to obtain greater value for shareholders than
that provided by any Qualifying Offer, the Company shall be entitled to include
information relating to such alternative transaction in the proxy soliciting
material prepared by it in connection with the Special Meeting.
(ii) If at the Special Meeting the Resolution, or a resolution with
respect to another Qualifying Offer, receives the affirmative vote of a
majority of the shares of Voting Stock outstanding as of the record date of
the Special Meeting, not giving effect to any affirmative votes cast by the
Offeror or any of its Affiliates, then all of the Rights shall be redeemed
by such shareholder action at the Redemption Price, effective
30
immediately prior to the consummation of the Qualifying Offer (provided
that the Qualifying Offer is consummated prior to 60 days after the date of
the Special Meeting).
(iii) Nothing contained in this subparagraph (c) shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duties. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any offer, or to recommend that
holders of shares of Voting Stock reject any tender offer, or to take any
other action (including, without limitation, the commencement, prosecution,
defense or settlement of any litigation and the submission of additional or
alternative offers or other proposals to the Special Meeting) with respect
to any Qualifying Offer or any tender offer that the Board of Directors
believes is necessary or appropriate in the exercise of such fiduciary
duties.
(iv) Nothing in this subparagraph (c) shall be construed as limiting
or prohibiting the Company or any Offeror from proposing or engaging in any
acquisition, disposition or other transfer of any securities of the
Company, any merger or consolidation involving the Company, any sale or
other transfer of assets of the Company, any liquidation, dissolution or
winding-up of the Company, or any other business combination or other
transaction, or any other action by the Company or such Offeror; provided,
however, that the holders of Rights shall have the rights set forth in this
Rights Agreement with respect to any such acquisition, disposition,
transfer, merger, consolidation, sale, liquidation, dissolution,
winding-up, business combination, transaction or action.
(d) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to subparagraph (b) of this
Section 23, or upon effectiveness of the redemption of the Rights pursuant to
subparagraph (c) of this Section 23, 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 of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. Any notice 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. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in connection with the purchase of shares of Common
Stock prior to the Distribution Date.
(e) A "Qualifying Offer" shall mean any written proposal delivered to the
Company by any Person (an "Offeror", which includes any other Person controlling
such Person), provided: (i) the Qualifying Offer is for all of the outstanding
shares of Common Stock not already beneficially owned by such Offeror, (ii) the
same per share price and consideration is
31
offered for all shares of Common Stock in the Qualifying Offer, provided that
such per share price and consideration is no less than the then current market
price for shares of Common Stock (iii) the consideration is at least 80 percent
cash and is to be paid upon consummation of the Qualifying Offer for all
tendered or exchanged shares of Common Stock in the Qualifying Offer, (iv) the
Qualifying Offer is accompanied by a written opinion, in customary form, of a
nationally recognized investment banking firm which is addressed to the holders
of the then outstanding shares of the Company's capital stock entitled to vote
generally in the election of directors, other than such Offeror and its
Affiliates, and states that the price to be paid to such holders pursuant to the
offer is fair to such holders and which includes any written presentation, if
one exists, of such firm showing the range of values underlying such conclusion,
(v) the Qualifying Offer is accompanied by written financing commitments,
subject only to customary conditions which are likely to be fulfilled, from
recognized financing sources, and/or has on hand cash or cash equivalents, for
the full amount of all financing necessary to consummate the Qualifying Offer
together with copies of all written materials, if any exist, prepared by such
Offeror for its lenders for use in their credit decision, (vi) requests the
Company to call a special meeting of the holders of Voting Stock for the purpose
of voting on a resolution accepting such offer and authorizing the redemption of
the Rights, and contains a written agreement of the Offeror to pay (or share
with any other Offeror) at least one-half of the Company's costs of such special
meeting (exclusive of the Company's costs of preparing and mailing proxy
material solely for its own solicitation); provided that the Offeror files the
written proposal delivered to the Company as a tender offer pursuant to Section
14(d) of the Exchange Act at least five days prior to the date of mailing by the
Company of any proxy statement for the Special Meeting, (vii) the Qualifying
Offer by its terms remains open for at least 20 Business Days plus 10 Business
Days after any change in price and (viii) on or prior to the date that the
Qualifying Offer is commenced within the meaning of Rule 14d-2 of the General
Rules and Regulations under the Exchange Act, such Offeror makes an irrevocable
written commitment to the Company to consummate a transaction or series of
transactions within 30 Business Days upon completion of the Qualifying Offer,
pursuant to which all shares of Common Stock not beneficially owned by such
Offeror at the time of consummation of the Qualifying Offer will be acquired at
the same price, and for the same consideration, per share, as paid in the
Qualifying Offer for shares of Common Stock.
Section 24. 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 shares of any class of capital stock to the holders of Preferred
Stock or to make any other distribution to the holders of Preferred Stock (other
than a regular quarterly cash dividend paid out of earnings or retained earnings
of the Company), or (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, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any consolidation or merger into or with any
other Person (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 series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person (other than the Company and/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
32
each holder of a Rights Certificate, to the extent feasible, and in accordance
with Section 25 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such share dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Stock, whichever shall be
the earlier.
(b) Upon the occurrence of a Section 11(a)(ii) Event, (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 25 hereof, a notice of the
occurrence of such event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock
and/or, if appropriate, other securities.
Section 25. 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 with
the Rights Agent) as follows:
The Goldfield Corporation
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
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 certificates representing 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 26. Supplements and Amendments. Prior to the Distribution Date and
subject to the next to last sentence of this Section 26, the Company may, by
resolution of its Board of
33
Directors and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing Common Stock. From and after the Distribution Date and
subject to the next to last sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights 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 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) or (iv) to shorten or
lengthen any time period hereunder; provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iv) of this sentence,
(A) a time period relative to when the Rights may be redeemed at such time as
the Rights are not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. 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
26, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of Preferred Stock Fractions for which a Right is
exercisable. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 27. 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 28. Determinations and Actions by the Board of Directors, etc. (a)
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect as of the date hereof. The Board of Directors of the
Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board or the Company, or as may be necessary or advisable in the administration
of this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of Clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
(b) It is understood that the Independent Directors Committee (as defined
below) of the Board of Directors of the Company shall review and evaluate this
Agreement in order to
34
consider whether the maintenance of this Agreement continues to be in the
interests of the Company, its shareholders and any other relevant constituencies
of the Company, within three (3) years of the date hereof and at least every
three (3) years thereafter, or sooner than that if any Person shall have made a
proposal to the Company, or taken any such other action, that, if effective,
could cause such Person to become an Acquiring Person hereunder, if a majority
of the members of the Independent Directors Committee shall deem such review and
evaluation appropriate after giving due regard to all relevant circumstances.
Following each such review, the Independent Directors Committee will communicate
its conclusions to the full Board of Directors, including any recommendation in
light thereof as to whether this Agreement should be modified or the Rights
should be redeemed. The "Independent Directors Committee" shall be comprised of
the Directors of the Company who shall have been determined to be independent by
reference to the following criteria. A Director shall be deemed to be an
"Independent Director" for the purposes of this Agreement if he or she shall
meet all of the following criteria: Such Person shall not be an employee (or
spouse of an employee) of the Company, nor shall such Person be substantially
dependent on the Company (or any Affiliate thereof) for his or her livelihood,
nor shall such Person be an Acquiring Person or representative, nominee,
Associate or Affiliate of an Acquiring Person.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 30. 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 of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth day following the date of such determination by the Board of Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the state of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 32. 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.
35
Section 33. 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.
* * *
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: THE GOLDFIELD CORPORATION
By /s/ Xxxxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxxx
--------------------- -------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxx X. Xxxxxxx
Title: Vice President Title: Chairman, President and Chief
Executive Officer
Attest: AMERICAN STOCK TRANSFER & TRUST COMPANY
By /s/ Xxxxx Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
--------------------- ---------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
37
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
OF
THE GOLDFIELD CORPORATION
Pursuant to Section 151(g) of the General Corporation Law of the State of
Delaware
THE GOLDFIELD CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware, (the "Corporation")
in accordance with the provisions of Section 151(g) thereof, DOES HEREBY
CERTIFY:
FIRST: The name of the Corporation is The Goldfield Corporation.
SECOND: Pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the Corporation,
the Board of Directors on September __, 2002 duly adopted the following
resolution creating a series of Preferred Stock designated as Series B
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 Restated 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 B Participating Preferred Stock" and the number of shares
constituting such series shall initially be one hundred thousand (100,000),
$1.00 par value, such number of shares to be subject to increase or decrease by
action of the Board of Directors as evidenced by a certificate of designations.
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 B Participating Preferred
Stock with respect to dividends, the holders of shares of Series B 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 last day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $10 or (b) subject to the provision for adjustment hereinafter set forth,
1000 times the aggregate per share amount of all cash dividends, and 1000 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, $0.10 par value, 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 B Participating
Preferred Stock. In the event the Corporation shall at any time after September
__, 2002 (the "Rights 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 B
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
B Participating Preferred Stock as provided in paragraph (a) above 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 B
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 B Participating Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series B Participating
Preferred Stock, unless the date of issue of such share 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 B
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 B 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 B 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.
A-2
Section 3. Voting Rights. The holders of shares of Series B Participating
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Series B Participating Preferred Stock shall entitle the holder thereof
to 1000 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
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 number of votes per share to which holders of shares of Series B
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, the holders of shares of
Series B 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.
Section 4. Certain Restrictions. (a) Whenever quarterly dividends or other
dividends or distributions payable on the Series B 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
B 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 B 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 B Participating
Preferred Stock, except dividends paid ratably on the Series B
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 B 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 B
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series B Participating Preferred Stock, or any shares of stock ranking on a
parity with the Series B
A-3
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 B Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
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 stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series B Participating Preferred Stock unless, prior thereto, the holders of
shares of Series B Participating Preferred Stock shall have received $1000 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series B
Liquidation Preference"). Following the payment of the full amount of the Series
B Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series B 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 B Liquidation Preference by (ii) 1,000 (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 B Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series B Participating Preferred Stock and
Common Stock, respectively, holders of Series B 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 B Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series B 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.
A-4
(c) In the event the Corporation shall at any time after the Rights
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 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 B 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 1,000 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
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 set forth in the preceding sentence with respect to the exchange or
change of shares of Series B 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 B Participating Preferred
Stock shall not be redeemable.
Section 9. Ranking. The Series B 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. The Restated Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series B
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds (2/3) or more of the outstanding
shares of Series B Participating Preferred Stock, voting separately as a class.
Fractional Shares. Series B 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 B Participating Preferred Stock;
THIRD: The Corporation's Restated Certificate of Incorporation is
amended so that the rights, preferences and limitations of the Series B
Participating Preferred Stock are as stated in the foregoing resolution.
A-5
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designations on behalf of the Corporation this ___ day of September 2002.
THE GOLDFIELD CORPORATION
By:
--------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman, President and Chief
Executive Officer
EXHIBIT B
Form of Rights Certificate
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY OR BY SHAREHOLDER ACTION, AT $0.001 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.] (1)
Rights Certificate
THE GOLDFIELD CORPORATION
This certifies that ____________________________, or registered assigns, is
the registered holder 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 September ___, 2002 (as it may be amended,
modified or supplemented from time to time, the "Rights Agreement"), between The
Goldfield Corporation, a Delaware corporation (the "Company"), and American
Stock Transfer & Trust Company, a New York corporation (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 p.m. (New York time) on the
Expiration Date (as defined in the Rights Agreement), which shall not be later
than September ___, 2012 at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-thousandth of a
share of the Company's Series B Participating Preferred Stock, $1.00 par value
(the "Preferred Stock"), at a purchase price of $2.20 (the "Purchase Price") per
one one-thousandth of a Preferred Stock (such fraction, a "Preferred Stock
Fraction"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase set forth on the reverse hereof and the Certificate
contained therein duly executed. Except as otherwise provided in Section 11(q)
of the Rights Agreement, the Purchase Price shall be paid at the election of the
holder in cash or by certified bank check or money order payable to the order of
the Company. The number of Rights evidenced by this Rights Certificate and the
number of Preferred Stock Fractions which may be purchased upon exercise thereof
and the Purchase Price per Preferred Stock Fraction,
set forth above, are the number of Rights, number of one Preferred Stock
Fractions and Purchase Price as of ___________, 2012,(2) based on the Preferred
Stock as constituted at such date.
Except as otherwise provided in the Rights Agreement, upon the 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 any Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, concurrently
with or after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any rights with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of 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 holder of the Rights Certificate, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the office of the Rights Agent as
set forth in the Rights Agreement and are also available upon written request to
the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Stock Fractions 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 (i) by the Board of Directors of the Company at
its option at a redemption price of $0.001 per Right at any time prior to the
earlier of (A) the date on which a Section 11(a)(ii) Event occurs and (B) the
Final Expiration Date, or (ii) by shareholder action taken at a Special Meeting
with respect to a Resolution relating to an Offer (as such terms are defined in
the Rights Agreement).
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-thousandth
B-2
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.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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 __________, 20__
ATTEST: THE GOLDFIELD CORPORATION
__________________________________ By_____________________________________
Name: Name:
Title: Title:
Countersigned: AMERICAN STOCK TRANSFER & TRUST COMPANY
By________________________________ By_____________________________________
Name: Name:
Title: Title:
(1) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
(2) Insert the Distribution Date.
B-3
Form of Reverse Side of Rights Certificate
FORM OF 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 therein, and does
hereby irrevocably constitute and appoint ___________ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company with full
power of substitution.
Dated: ____________________, 20__
--------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate is not being sold, assigned and transferred by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it did
not acquire the Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: __________________, 20__ _________________________________
Signature
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.
B-4
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Rights Certificate.)
To: THE GOLDFIELD CORPORATION
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 upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
--------------------------------------------------------------------
(Please print name and address)
Please insert social security or other identifying number:
___________________________________
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 print name and address)
Please insert social security or other identifying number:
___________________________________
Dated: __________________, 20__ _________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate are not being exercised
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it did
not acquire the Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: __________________, 20__ _________________________________
Signature
B-5
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On September ___, 2002, the Board of Directors of The Goldfield
Corporation, a Delaware corporation (the "Company"), declared a dividend
distribution of one Right for each outstanding share of common stock, $0.10 par
value, of the Company (the "Common Stock"), to stockholders of record at the
close of business on September ___, 2002 (the "Record Date"). Each Right
entitles the record holder to purchase from the Company one one-thousandth of a
share ("Preferred Stock Fraction") of the Company's Series B Participating
Preferred Stock, $1 par value (the "Preferred Stock") at a price of $2.20 (the
"Purchase Price"), subject to adjustment in certain circumstances. Except as
otherwise provided in the Rights Agreement, the Purchase Price may be paid, at
the election of the registered holder, in cash or by certified bank check or
money order payable to the order of the Company. The description and terms of
the Rights are set forth in a Rights Agreement, dated as of September ___, 2002
(as it may be amended, modified or supplemented from time to time, the "Rights
Agreement"), between the Company and American Stock Transfer & Trust Company, as
Rights Agent.
Initially, the Rights will be attached to the certificates representing
outstanding shares of Common Stock, and no Rights Certificates will be
distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earlier of:
o the close of business on the tenth day after the date of a public
announcement that a person or group of affiliated or associated
persons (with certain exceptions, an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Common Stock (the "Stock Acquisition
Date"), or
o the close of business on the tenth Business Day (or such later date as
may be determined by the Company's Board of Directors prior to such
time as any person becomes an Acquiring Person) after the commencement
of a tender offer or exchange offer if, upon consummation thereof, the
person or group making such offer would be the beneficial owner of 20%
or more of the outstanding shares of Common Stock.
Until the Distribution Date:
o the Rights will be evidenced by the Common Stock certificates and will
be transferred with and only with such Common Stock certificates,
o new Common Stock certificates issued after the Record Date will
contain a notation incorporating the Rights Agreement by reference,
and
o 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.
As soon as practicable following 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, such separate Rights
Certificates alone will evidence the Rights. Except in certain limited
circumstances, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on September ___, 2012 unless earlier redeemed by the
Company as described below.
Except in the circumstances described below, after the Distribution Date
each Right will be exercisable into a Preferred Stock Fraction. Each Preferred
Stock Fraction carries voting and dividend rights that are intended to produce
the equivalent of one share of Common Stock. The voting and dividend rights of
the Preferred Stock are subject to adjustment in the event of dividends,
subdivisions and combinations with respect to the Common Stock of the Company.
In lieu of issuing certificates for fractions of shares of Preferred Stock
(other than fractions which are integral multiples of Preferred Stock
Fractions), the Company may pay cash in accordance with the Rights Agreement.
In the event that, at any time following the Distribution Date, a Person
becomes an Acquiring Person (other than pursuant to an offer for all outstanding
shares of Common Stock at a price and on terms which the majority of the
independent Directors determine to be fair to, and otherwise in the best
interests of, stockholders), the Rights Agreement provides that proper provision
shall be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
(2) times the exercise price of the Right. In lieu of requiring payment of the
Purchase Price upon exercise of the Rights following any such event, the Company
may provide that each Right be exchanged for one share of Common Stock (or cash,
property or other securities, as the case may be). The only right of a holder of
Rights following the Company's election to provide for such exchange shall be to
receive the above described securities. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, any
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by an Acquiring Person shall immediately
become null and void.
For example, at an exercise price of $2.20 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 $4.40
worth of Common Stock (or other consideration, as noted above) for $2.20.
Assuming that the Common Stock had a per share value of $0.44 at such time, the
holder of each valid Right would be entitled to purchase ten shares of Common
Stock for $2.20. Alternatively, the Company could permit the holder to surrender
each Right in exchange for one share of Common Stock (with a value of $0.44)
without the payment of any consideration other than the surrender of the Right.
C-2
In the event that, at any time following the Stock Acquisition Date:
o the Company engages in a merger or consolidation in which the Company
is not the surviving corporation
o the Company engages in a merger or consolidation with another person
in which the Company is the surviving corporation, but in which all or
part of its Common Stock is changed or exchanged, or
o 50% or more of the Company's assets or earning power is sold or
transferred (except with respect to the first two bullet points above,
a merger or consolidation which follows an offer described in the
second preceding paragraph and in which the amount and form of
consideration is the same as was paid in such offer),
the Rights Agreement provides that proper provision shall be made so that each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon the exercise thereof,
common stock of the acquiring company having a value equal to two (2) 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".
The Purchase Price payable, and the number of Preferred Stock Fractions or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution under the following
circumstances:
o in the event of a stock dividend on the Preferred Stock or other
capital stock, or a subdivision, combination or reclassification of
the Preferred Stock,
o upon the grant to holders of the Preferred Stock of certain rights or
warrants to subscribe for Preferred Stock or securities convertible
into Preferred Stock at less than the current market price of the
Preferred Stock, or under the following circumstances: upon the
distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends or
dividends payable in Preferred Stock) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock (other than
fractions which are integral multiples of Preferred Stock Fractions) will be
issued upon exercise of the Rights and, in lieu thereof, a cash payment will be
made based on the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time prior to the earlier of the date on which a Section 11(a)(ii)
Event (as defined in the Rights Agreement) occurs and September ___, 2012, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $0.001 per Right, payable in cash or securities or both (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Company ordering redemption of the Rights, the Rights will
C-3
terminate and the only right of the holders of Rights will be to receive the
Redemption Price. However, in the event the Company receives a Qualifying Offer
(as defined below), the rights may be redeemed by way of shareholder action
taken at a special meeting of shareholders called by the Board for the purpose
of voting on a resolution accepting the Qualifying Offer and authorizing the
redemption of the Rights pursuant to the provisions of the Rights Agreement. The
special meeting must be held not less than 90 and more than 120 days after the
date the Qualifying Offer is received. Such an action by shareholders requires
the affirmative vote of a majority of all shares of Common Stock and any other
stock entitled to vote in the election of directors and management affairs of
the Company, and is effective immediately prior to the consummation of any
Qualifying Offer consummated within 60 days after the special meeting. A
"Qualifying Offer" is a written proposal that is delivered to the Company by any
person and meets the following conditions:
o the Qualifying Offer is for all of the outstanding shares of Common
Stock not already beneficially owned by such Person,
o the same per share price and consideration is offered for all shares,
is no less than the then current market price for shares of Common
Stock, is at least 80 percent cash, and is to be paid upon
consummation of the Qualifying Offer,
o the Qualifying Offer is accompanied by a written opinion of a
nationally recognized investment banking firm, stating that the price
to be paid to holders pursuant to the Qualifying Offer is fair and
including any written presentation of such firm showing the range of
values underlying such conclusion,
o the Qualifying Offer is accompanied by written financing commitments
and/or has on hand cash or cash equivalents, for the full amount of
all financing necessary to consummate the Qualifying Offer,
o the Qualifying Offer requests that the Company call a special meeting
of shareholders to accept the Qualifying Offer and contains a written
agreement of the person making the Qualifying Offer to pay at least
50% of the Company's costs of the special meeting,
o the Qualifying Offer by its terms remains open for at least 20
Business Days plus 10 Business Days after any change in price, and
o on or before the date the Qualifying Offer is commenced, such Person
makes an irrevocable written commitment to the Company to acquire,
within 30 Business Days upon completion of the Qualifying Offer, all
shares of Common Stock then not beneficially owned by such Person at
the same price, and for the same consideration, per share as paid in
the Qualifying Offer.
In the determination of the fairness of any offer, the Board retains the
authority to reject, advise the shareholders to reject, or take other action in
response to any offer necessary to the exercise of its fiduciary duties.
C-4
Immediately upon action of the Board of Directors of the Company ordering
the redemption of the Rights or upon the effectiveness of a redemption of the
Rights pursuant to shareholder adoption of a resolution accepting a Qualifying
Offer and authorizing the redemption of the Rights, the only existing right of a
holder shall be to receive the redemption price for the Rights.
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 as set forth above.
Any of the provisions of the Rights Agreement, other than certain
provisions relating to the principal economic terms of the Rights, may be
amended by the Board of Directors of the Company prior to the Distribution Date.
Thereafter, the provisions, other than certain provisions relating to the
principal economic terms of the Rights, of the Rights Agreement may be amended
by the Board in order: to cure any ambiguity, defect or inconsistency; to
shorten or lengthen any time period under the Rights Agreement; or in any other
respect that will not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person); provided that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
At least every three years, an Independent Directors Committee of the
Board, consisting of all Board members who are not employees (or spouses of
employees) of the Company, substantially dependent on the Company (or any of its
Affiliates) for their livelihood, an Acquiring Person or representative,
nominee, Associate or Affiliate of an Acquiring Person, will review and evaluate
the Rights Agreement in order to consider whether maintenance of the Rights
Agreement continues to be in the interests of the Company, its shareholders and
any other relevant constituencies. Following each such review, the Independent
Directors Committee will communicate its conclusions to the full Board,
including any recommendation as to whether the Rights Agreement should be
modified or the Rights should be redeemed.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement of the Company on
Form 8-A. A copy of the Rights Agreement is available free of charge from the
Company upon written request therefor. 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.
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