1
--------------------------------------------------------------------------------
Amended and Restated Rights Agreement
BJ Services Company
and
First Chicago Trust Company of New York,
as Rights Agent
Dated as of September 26, 1996
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . 2
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . 9
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . 9
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . 12
Section 5. Countersignature and Registration . . . . . . . . . . . . 13
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8. Cancellation and Destruction of Right Certificates . . . . 18
Section 9. Availability of Shares of Preferred Stock . . . . . . . . 19
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . 21
Section 11. Adjustment of Purchase Price, Number of Shares and Number
of Rights . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earnings Power . . . . . . . . . . . . . . . . . . . . . . 42
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . 50
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . 53
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . 54
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . 54
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . 55
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 56
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . 57
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . 62
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . 65
- i -
3
Page
----
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . 69
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . 71
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . 73
Section 30. Determinations and Actions by the Board of Directors . . . 73
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . 74
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . 74
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 74
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . 74
- ii -
4
AMENDED AND RESTATED
RIGHTS AGREEMENT
Amended and Restated Rights Agreement, dated as of September 26,
1996 between BJ Services Company, a Delaware corporation (the "Company"), and
First Chicago Trust Company of New York, a New York corporation (the "Rights
Agent").
The Company and the Rights Agent have heretofore entered into a
Rights Agreement dated as of January 12, 1994 (as amended, the "Original Rights
Agreement"). In connection therewith, the Board of Directors of the Company
authorized and declared a dividend of one preferred share purchase right (the
"Original Right") for each share of Common Stock (as hereinafter defined) of
the Company outstanding as of the close of business on January 17, 1994 (the
"Record Date"), and the Board of Directors further authorized and directed the
issuance of one Original Right (subject to adjustment as provided herein) with
respect to each share of Common Stock that became outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date (as such terms are hereinafter defined), with each
Original Right having the rights assigned to it under the Original Rights
Agreement. Pursuant to Section 27 of the Original Rights Agreement, the
parties hereto hereby amend and restate the Original Rights Agreement to read
in its entirety in the form hereof. The Board of Directors of the Company has
approved the amendment and restatement such that each Original Right shall be
deemed to be a preferred share purchase right (a "Right") having the rights
assigned to it pursuant to this Rights Agreement. The Board of
5
2
Directors has also authorized the issuance of one Right (as such number may be
adjusted hereafter pursuant to the terms of this Rights Agreement) with respect
to each share of Common Stock that shall become outstanding between the date of
this Rights Agreement and the earliest to occur of the Distribution Date, the
Redemption Date or the Final Expiration Date. Each Right shall represent the
right to purchase one one-thousandth (1/1000) of a share of Preferred Stock.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the shares of Common
Stock then outstanding, but shall not include an Exempt Person (as such
term is hereinafter defined); provided, however, that if the Board of
Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person" has become such inadvertently
(including, without limitation, because (i) such Person was unaware that
it beneficially owned a percentage of Common Stock that would otherwise
cause such Person to be a "Acquiring Person" or (ii) such Person was
aware of the extent of its Beneficial Ownership of Common Stock but had
no actual knowledge of the
6
3
consequences of such Beneficial Ownership under this Rights Agreement)
and without any intention of changing or influencing control of the
Company, and such Person, as promptly as practicable after being advised
of such determination divested or divests himself or itself of
Beneficial Ownership of a sufficient number of shares of Common Stock so
that such Person would no longer be an Acquiring Person, then such
Person shall not be deemed to be or to have become an "Acquiring Person"
for any purposes of this Agreement. Notwithstanding the foregoing, (i)
if a Person would be deemed an Acquiring Person upon the adoption of
this Agreement because of Beneficial Ownership of between 15% and 20% of
the shares of Common Stock then outstanding on such date, such Person
will not be deemed an Acquiring Person for any purposes of this
Agreement unless and until such Person acquires Beneficial Ownership of
any additional shares of Common Stock after the adoption of this
Agreement unless upon the consummation of the acquisition of such
additional shares of Common Stock such Person does not beneficially own
15% or more of the shares of Common Stock then outstanding, and (ii) no
Person shall become an "Acquiring Person" as the result of an
acquisition of shares 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 15% or more of the shares of
Common Stock then outstanding, provided, however, that if a Person shall
become the Beneficial Owner
7
4
of 15% or more of the shares of Common Stock then outstanding by reason
of such share acquisitions by the Company and thereafter become the
Beneficial Owner of any additional shares of Common Stock, then such
Person shall be deemed to be an "Acquiring Person" unless upon the
consummation of the acquisition of such additional shares of Common
Stock such Person does not own 15% or more of the shares of Common Stock
then outstanding. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage of
such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(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, shall
be deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to beneficially own,
8
5
directly or indirectly within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, (x) securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or (y) securities which such Person has a right to
acquire on the exercise of Rights at any time prior to the time a
Person becomes an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security by
reason of such agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such
9
6
security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange
Act and (2) is not also then reportable 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 with which such Person or any of
such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or disposing
of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York,
or the State in which the principal office of the Rights Agent is
located, 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 City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City time,
on the next succeeding Business Day.
10
7
(f) "Common Stock" when used with reference to the Company
shall mean the common stock, par value $.10, of the Company. "Common
Stock" when used with reference to any Person other than the Company
shall mean the capital stock (or, in the case of an unincorporated
entity, the equivalent equity interest) with the greatest voting power
of such other Person or, if such other Person is a subsidiary of another
Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "equivalent preferred shares" shall have the meaning set
forth in Section 11(b) hereof.
(i) "Exempt Person" shall mean the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, in each case
including, without limitation, in its fiduciary capacity, or, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity or trustee holding Common Stock for or pursuant
to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or
of any Subsidiary of the Company.
(j) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(k) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
11
8
(l) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(m) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, $1.00 par value, of the Company having
the rights and preferences set forth in the Form of Amended Certificate
of Designation attached to this Agreement as Exhibit A.
(n) "Record Date" shall have the meaning set forth in the
preamble to this Agreement.
(o) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(p) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(q) "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) of
the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority of
the Board of Directors shall become aware of the existence of an
Acquiring Person.
(r) "Subsidiary" of any Person shall mean any corporation or
other entity of which securities or other ownership interests having
ordinary voting power sufficient to elect a majority of the board of
directors or other persons performing similar functions are beneficially
owned,
12
9
directly or indirectly, by such Person, and any corporation or other
entity that is otherwise controlled by such Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of Common Stock) 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 Right Certificates. (a) Until the earlier
of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth
business day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
of the first public announcement of the intention of such Person (other than an
Exempt Person) to commence, a tender or exchange offer the consummation of
which would result in any Person (other than an Exempt Person) becoming the
Beneficial Owner of shares of Common Stock aggregating 15% or more of the
Common Stock then outstanding (including any such date which is after the date
of this Agreement and prior to the issuance of the Rights), the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the names of the holders thereof
and
13
10
not by separate Right Certificates, and (y) the Rights will be transferable
only in connection with the transfer of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Stock as of the close of business on the
Distribution Date (other than any Acquiring Person or any Associate or
Affiliate of an Acquiring Person), at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held. As of
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) Attached hereto as Exhibit C is a Summary of Rights to
Purchase Shares of Preferred Stock (the "Summary of Rights"). With respect to
certificates for Common Stock outstanding as of the date hereof, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with the Summary of Rights. Until
the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Stock outstanding os of the date hereof, with or without a copy of the Summary
of Rights, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.
14
11
Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of Common
Stock out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the date hereof but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in an Amended and Restated Rights
Agreement between BJ Services Company and First Chicago Trust
Company of New York, dated as of September 26, 1996 as the same
may be amended 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 executive offices of BJ
Services Company. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
BJ Services Company will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a
written request therefor. Under certain circumstances, as set
forth in the Rights Agreement, Rights owned by or transferred to
any Person who becomes an Acquiring Person (as defined in the
Rights Agreement) and certain transferees thereof will become
null and void and will no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights
15
12
associated with the Common Stock represented thereby. In the event that the
Company purchases or otherwise acquires any Common Stock after the date hereof
but prior to the Distribution Date, any Rights associated with such Common
Stock shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Stock which are no
longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially in the form set forth in Exhibit
B hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of 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 the New York
Stock Exchange or of any other stock exchange or automated quotation system on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 11, 13 and 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at
the price per one one-thousandth of a share of
16
13
Preferred Stock set forth therein (the "Purchase Price"), but the number of
such one one-thousandths of a share of Preferred Stock and the Purchase Price
shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by the Chairman of the
Board of Directors, the President, any of the Vice Presidents, the Treasurer or
the Controller of the Company, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the Person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the
17
14
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 an office or agency designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 7(e), 11(a)(ii) and 14 hereof, at any
time after the close of business on the Distribution Date, and prior to the
close of business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged
18
15
at the office or agency of the Rights Agent designated for such purpose.
Thereupon the Rights Agent shall countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at
any time after the Distribution Date and prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to them, and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration Date
of Rights. (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right
19
16
Certificate may, subject to Section 11(a)(ii) hereof and except as otherwise
provided herein, exercise the Rights evidenced thereby in whole or in part upon
surrender of the Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the office or
agency of the Rights Agent designated for such purpose, together with payment
of the Purchase Price for each one one-thousandth of a share of Preferred Stock
as to which the Rights are exercised, at any time which is both after the
Distribution Date and prior to the earliest of (i) the close of business on
January 17, 2004 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption Date") or
(iii) the time at which such Rights are exchanged as provided in Section 24
hereof.
(b) The Purchase Price shall be initially $150 for each one
one-thousandth of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of one one-thousandths of a share of
Preferred Stock or other securities or property to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares of
20
17
Preferred Stock to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 9 hereof, in cash or by certified check, cashier's check or money
order payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Stock
certificates for the number of shares of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) requisition from the depositary agent depositary receipts
representing interests in such number of one one-thousandths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) promptly 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 Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less
21
18
than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the exercisable Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to Section
6 hereof or this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of assignment or
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such transfer or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right 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
22
19
and retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or any shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that 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 time that a Person becomes an Acquiring Person, shares of Common Stock and
other securities) issuable upon the exercise of Rights may be listed or
admitted to trading on the New York Stock Exchange or listed on any other
national securities exchange or quotation system, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed or admitted to
trading on the New York Stock Exchange or listed on any other exchange or
quotation system upon official notice of issuance upon such exercise.
(c) From and after such time as the Rights become exercisable,
the Company shall use its best efforts, if then necessary to permit the
issuance of shares of Preferred Stock
23
20
(and following the time that a Person first becomes an Acquiring Person, shares
of Common Stock and other securities) upon the exercise of Rights, to register
and qualify such shares of Preferred Stock (and following the time that a
Person first becomes an Acquiring Person, shares of Common Stock and other
securities) under the Securities Act and any applicable state securities or
"Blue Sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer
exercisable for such securities and the Final Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act 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 unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have been declared
effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of
24
21
Preferred Stock (and, following the time that a Person becomes an Acquiring
Person, shares of Common Stock and other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates therefor (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
(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 Right
Certificates or of any shares of Preferred Stock (or shares of Common Stock or
other securities) 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 Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Stock (or shares of Common Stock or other securities) in a name other than that
of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates or depositary
receipts for Preferred Stock (or shares of Common Stock or other securities)
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by that holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for Preferred Stock is issued upon
25
22
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Preferred Stock represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends or
other distributions, 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 of Shares and
Number of Rights. The Purchase Price, the number of shares of Preferred Stock
or other securities or property purchasable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Xxxxxxxxx
00
00
Xxxxx, (X) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of
Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, the holder would have
owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Company issuable
upon exercise of one Right.
27
24
(ii) Subject to Section 24 of this Agreement, in the
event that any Person becomes an Acquiring Person, then (A) the
Purchase Price shall be adjusted to be the Purchase Price in
effect immediately prior to such Person becoming an Acquiring
Person multiplied by the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately
prior to such Person becoming an Acquiring Person, whether or not
such Right was then exercisable, and (B) each holder of a Right,
except as otherwise provided in this Section 11(a)(ii) and
Subsection 11(a)(iii), hereof, shall thereafter have the right to
receive, upon exercise at a price equal to the Purchase Price (as
so adjusted), in accordance with the terms of this Agreement and
in lieu of shares of Preferred Stock, such number of shares of
Common Stock (or at the option of the Company, such number of one
one-thousandths of shares of Preferred Stock) as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share
market price of the Company's Common Stock (determined pursuant
to Section 11(d) hereof) on the date such Person became an
Acquiring Person; provided, however, that the Purchase Price and
the number of shares of Common Stock so receivable upon
28
25
exercise of a Right shall thereafter be subject to further
adjustment as appropriate in accordance with Section 11(f)
hereof. Notwithstanding anything in this Agreement to the
contrary, however, from and after the time (the "invalidation
time") when any Person first becomes an Acquiring Person, any
Rights that are beneficially owned by (x) any Acquiring Person
(or any Affiliate or Associate of any Acquiring Person), (y) a
transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the invalidation time
or (z) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee prior to or
concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has
determined is part of a plan, arrangement or understanding which
has the purpose or effect of avoiding the provisions of this
paragraph, and subsequent transferees of such Persons, shall be
void without any further action and any holder of such Rights
shall thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company shall
use all reasonable efforts to ensure that the provisions of
29
26
this Section 11(a)(ii) are complied with, but shall have no
liability to any holder of Right 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. From and after the invalidation time, no
Right Certificate shall be issued pursuant to Section 3 or
Section 6 hereof that represents Rights that are or have become
void pursuant to the provisions of this paragraph, and any Right
Certificate delivered to the Rights Agent that represents Rights
that are or have become void pursuant to the provisions of this
paragraph shall be cancelled. From and after the occurrence of
an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of Preferred Stock having an aggregate
current market value equal to the current per share market price
of a share of Common Stock. In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit the exercise in full
30
27
of the Rights in accordance with the foregoing subparagraph (ii),
the Board of Directors shall, to the extent permitted by
applicable law and any material agreements then in effect to
which the Company is a party (A) determine the excess of (1) the
value of the shares of Common Stock issuable upon the exercise of
a Right in accordance with the foregoing subparagraph (ii) (the
"Current Value") over (2) the then current Purchase Price
multiplied by the number of one one-thousandths of shares of
Preferred Stock for which a Right was exercisable immediately
prior to the time that the Acquiring Person became such (such
excess, the "Spread"), and (B) with respect to each Right (other
than Rights which have become void pursuant to Section
11(a)(ii)), make adequate provision to substitute for the shares
of Common Stock issuable in accordance with subparagraph (ii)
upon exercise of the Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3)
shares of Preferred Stock or other equity securities of the
Company (including, without limitation, shares or fractions of
shares of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those
of the shares of Common Stock, are deemed in good faith by the
Board of Directors to have substantially the same value as the
shares of Common Stock (such shares of preferred stock
31
28
and shares or fractions of shares of preferred stock are
hereinafter referred to as "Common Stock equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having a value which, when added to
the value of the shares of Common Stock actually issued upon
exercise of such Right, shall have an aggregate value equal to
the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined
by the Board of Directors upon the advice of a nationally
recognized investment banking firm selected in good faith by the
Board of Directors; provided, however, if the Company shall not
make adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the date that the
Acquiring Person became such (the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, to the
extent permitted by applicable law and any material agreements
then in effect to which the Company is a party, upon the
surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of
shares of Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If, upon the date any Person becomes an
32
29
Acquiring Person, the Board of Directors 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, then, if the Board of Directors so elects,
the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the second and/or third sentence of this Section
11(a)(iii), the Company (x) shall provide, subject to Section
11(a)(ii) hereof and the last sentence of this Section 11(a)(iii)
hereof, that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
second sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a
33
30
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 shares of Common Stock shall be the current per share market
price (as determined pursuant to Section 11(d)(i)) on the Section
11(a)(ii) Trigger Date and the per share or fractional value of
any "Common Stock equivalent" shall be deemed to equal the
current per share market price of the Common Stock. The Board of
Directors of the Company may, but shall not be required to,
establish procedures to allocate the right to receive shares of
Common Stock upon the exercise of the Rights among holders of
Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock (or
shares having similar rights, privileges and preferences as the
Preferred Stock ("equivalent preferred shares")) or securities
convertible into Preferred Stock or equivalent preferred shares at a
price per share of Preferred Stock or equivalent preferred shares (or
having a conversion price per share, if a security convertible into
shares of Preferred Stock or equivalent preferred shares) less than the
then current per share market price of the Preferred Stock (determined
pursuant to Section 11(d) hereof) on such record date, the
34
31
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock and equivalent preferred shares
outstanding on such record date plus the number of shares of Preferred
Stock and equivalent preferred shares which the aggregate offering price
of the total number of shares of Preferred Stock and/or equivalent
preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock and equivalent
preferred shares outstanding on such record date plus the number of
additional shares of Preferred Stock and/or equivalent preferred shares
to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of
such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent.
35
32
Shares of Preferred Stock and equivalent preferred shares owned by or
held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Stock (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be
the then current per share market price of the Preferred Stock
(determined pursuant to Section 11(d) hereof) on such record date, less
the fair market value (as determined in good faith by the Board of
Directors of the Company whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription
36
33
rights or warrants applicable to one share of Preferred Stock, and the
denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock;
provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon exercise of
one Right. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been
fixed.
(d) (i) Except as otherwise provided herein, for the purpose of
any computation hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of
the Security is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the
37
34
expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security.
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 by the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is 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 Security
is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on
38
35
which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market price"
of the Preferred Stock shall be determined in accordance with the method
set forth in Section 11(d)(i). If the Preferred Stock is not publicly
traded but the Common Stock is publicly traded, the "current per share
market price" of the Preferred Stock shall be conclusively deemed to be
the current per share market price of the Common Stock as determined
pursuant to Section 11(d)(i) multiplied by one thousand (appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof). If neither the Common
Stock nor the Preferred Stock is publicly traded, "current per share
market price" 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.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be
carried
39
36
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 Preferred Stock or share
of Common Stock or other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise
any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than the Preferred Stock, thereafter the Purchase Price and the number
of such other shares so receivable upon exercise of a Right shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h),
11(i) and 11(m) 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 one
one-thousandths
40
37
of a share of Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), 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 one one-thousandths of a share of Preferred Stock
(calculated to the nearest one ten-thousandth of a share of Preferred
Stock) obtained by (i) multiplying (x) the number of one one-thousandths
of a share covered by a Right immediately prior to such adjustment by
(y) the Purchase Price in effect immediately prior to such adjustment of
the Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-thousandths of
a share of Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment.
41
38
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company may, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Right Certificates
42
39
so to be distributed shall be issued, executed and countersigned in the
manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price and the number of one one-thousandths of a share of Preferred
Stock which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
Preferred Stock or other shares of capital stock issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of
Preferred Stock or other such shares 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 issuing to the holder of any Right
exercised after such
43
40
record date of the Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Stock, issuance wholly for
cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash or Preferred Stock or securities which
by their terms are convertible into or exchangeable for Preferred Stock,
dividends on Preferred Stock payable in shares of Preferred Stock or
issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred
Stock shall not be taxable to such stockholders.
44
41
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Stock payable in Common Stock
or (ii) effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of a dividend
payable in Common Stock) into a greater or lesser number of Common
Stock, then in any such case, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered
thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following
any such event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Sections 23, 24 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that
45
42
such action will diminish substantially or eliminate the benefits
intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Stock or the Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof (if so required under Section 25 hereof). The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earnings Power. (a) In the event, directly or indirectly, at any time after
any Person has become an Acquiring Person, (i) the Company shall merge with and
into any other Person, (ii) any Person shall consolidate with the Company, or
any Person shall merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Stock shall be changed into or exchanged for
stock or other securities of any other Person (or of the Company) or cash or
any other property, or (iii) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or
46
43
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly-owned Subsidiaries), then upon the first occurrence
of such event, proper provision shall be made so that: (A) each holder of
record of a Right (other than Rights which have become void pursuant to Section
11(a)(ii)) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable (whether or not such Right was then exercisable) immediately
prior to the time that any Person first became an Acquiring Person (each as
subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b), 11(c),
11(h), 11(i) and 11(m)), in accordance with the terms of this Agreement and in
lieu of Preferred Stock, such number of validly issued, fully paid and non-
assessable and freely tradeable shares of Common Stock of the Principal Party
(as defined herein) not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the time that any Person first became an Acquiring Person
(as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(h), 11(i) and 11(m)) and (2) dividing that product by 50% of the then
47
44
current per share market price of the Common Stock of such Principal Party
(determined pursuant to Section 11(d)(i) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; provided that the Purchase Price
and the number of shares of Common Stock of such Principal Party issuable upon
exercise of each Right shall be further adjusted as provided in Section 11(f)
of this Agreement to reflect any events occurring in respect of such Principal
Party after the date of the such consolidation, merger, sale or transfer; (B)
such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (D) such Principal
Party shall take such steps (including, but not limited to, the reservation of
a sufficient number of its shares of Common Stock in accordance with Section 9
hereof) in connection with such consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights; provided that, upon the
subsequent occurrence of any consolidation, merger, sale or transfer of assets
or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Purchase Price as provided in this Section 13(a), such
cash, shares, rights, warrants and other
48
45
property which such holder would have been entitled to receive had such holder,
at the time of such transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13(a), and
such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of the securities into which the shares of Common Stock
are converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than
one such Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the
Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the Company
if it survives) or (z) the Person resulting from the consolidation; and
49
46
(ii) in the case of any transaction described in (iii)
of the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the issuer of
Common Stock having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or
has not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one
Person, and the Common Stocks of all of such persons have been so registered,
the term "Principal Party" shall refer to whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value of shares
outstanding, or (3) if 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 clauses (1) and (2)
above shall apply to
50
47
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless prior
thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such consolidation, merger, sale or
transfer of assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the Principal Party
pursuant to Sections 13(a) and (b) hereof and providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
51
48
Securities Act) until the Final Expiration Date, and similarly comply
with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on the New York Stock
Exchange or such securities exchange, or, if the Common Stock of the
Principal Party shall not be listed or admitted to trading on the New
York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be
reported by such other system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its
authorized securities or in its certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue (other than to holders
of
52
49
Rights pursuant to this Section 13), in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of Section 13, then,
in such event, the Company hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any
time after a Person first becomes an Acquiring Person enter into any
transaction of the type contemplated by (i) - (iii) of Section 13(a) hereof if
(x) at the time of or immediately after such consolidation, merger, sale,
transfer or other transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect
53
50
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights, (y) prior to, simultaneously with or immediately
after such consolidation, merger, sale, transfer of other transaction, the
stockholders of the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates or
Associates or (z) the form or nature of organization of the Principal Party
would preclude or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights (except prior to the
Distribution Date in accordance with Section 11(n) hereof). In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the 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 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
54
51
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Interests in fractions of Preferred Stock in
integral multiples of one one-thousandth of a share of Preferred Stock may, at
the election of the Company, be evidenced
55
52
by depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company shall pay to the
registered holders of Right 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 Preferred Stock. For the purposes of this Section
14(b), the current market value of a share of Preferred Stock shall be the
closing price of a share of Preferred Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock upon the exercise or exchange of Rights. In lieu of
such fractional shares of Common Stock, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole share of Common Stock (as
determined in
56
53
accordance with Section 14(a) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Stock); and any registered holder of any Right 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 Right Certificate (or, prior to
the Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Stock) in the manner provided in such Right
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 will be entitled to specific performance of the
obligations under, and
57
54
injunctive relief against actual or threatened violations of, the obligations
of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the 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 be affected by any notice
to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any
58
55
purpose the holder of the Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in this Agreement), or to receive dividends or subscription rights,
or otherwise, until the Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder in accordance with a fee schedule to be mutually
agreed upon and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees 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 administration of this
59
56
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
Right Certificate or certificate for the Preferred Stock or Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, instruction, 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, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or 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, 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
60
57
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name and in all such cases such Right
Certificates shall have the full force provided in the Right 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 Right
Certificates, by their acceptance thereof, shall be bound:
61
58
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter 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 any one of the Chairman of the Board of Directors, the President, any
Vice President, the Treasurer, the Controller 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 to the Company
and any other Person only for its own negligence, bad faith or wilful
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 Right Certificates
62
59
(except its countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of
the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant to
Section 12, describing such change or adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Preferred Stock or other
securities
63
60
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person reasonably believed by the Rights Agent to be
one of the Chairman of the Board of Directors, the President, the Chief
Financial Officer or 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 by it in good
faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company may, at
the option of the Rights Agent, set forth in writing any action proposed
to be taken or omitted by the Rights Agent under this Agreement and the
date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date
64
61
specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company 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 reasonable care was exercised in the selection and continued
employment thereof.
65
62
(j) At any time and from time to time after the Distribution
Date, upon the request of the Company, the Rights Agent shall promptly
deliver to the Company a list, as of the most recent practicable date
(or as of such earlier date as may be specified by the Company) of the
holders of record of the Rights.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in
the form of assignment or the form of election to purchase set forth on
the reverse thereof, as the case may be, has not been completed to
certify the holder is not an Acquiring Person (or an Affiliate or
Associate thereof), the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock or Preferred Stock by registered or
certified mail. The Company shall promptly notify the holders of the Right
Certificates by first-class mail of any such resignation. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock or Preferred Stock by
registered or
66
63
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the resigning, removed,
or incapacitated Rights Agent shall remit to the Company, or to any successor
Rights Agent designated by the Company, all books, records, funds, certificates
or other documents or instruments of any kind then in its possession which were
acquired by such resigning, removed or incapacitated Rights Agent in connection
with its services as Rights Agent hereunder, and shall thereafter be discharged
from all duties and obligations hereunder. Following notice of such removal,
resignation or incapacity, the Company shall appoint a successor to such Rights
Agent. If the Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be either (A)
a corporation organized and doing business under the laws of the United States
or of the State of New York or Texas (or any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of New York or Texas), in
67
64
good standing, having an office or an affiliate with an office in the State of
New York which is authorized 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 $50 million or (B) an affiliate of a
corporation described in clause (A) of this sentence which is a corporation
organized and doing business under the laws of the United States or of the
State of New York or Texas (or any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of New York or Texas), in good standing, having a principal office in the
State of New York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
Federal or state authority. 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 or Preferred Stock, and, following the Distribution
Date, mail a notice thereof in writing to the registered holders
68
65
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right 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 earlier of the Redemption Date and the Final Expiration
Date, the Company may with respect to shares of Common Stock so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company or (iv) a contractual obligation of
the Company in each case existing prior to the Distribution Date, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at any time prior to such time as any Person first becomes an
Acquiring Person, redeem all but not less than
69
66
all the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the current market price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23 (or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), 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.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after such action of
the Board of Directors ordering the redemption of the Rights (or such later
time as the Board of Directors may establish for the effectiveness of such
redemption), the Company shall mail a notice of redemption to all the holders
of the then outstanding Rights at their last addresses as they appear upon
70
67
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 shall state
the method by which the payment of the Redemption Price will be made.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Person first becomes
an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have not become
effective or that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
amount per Right being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than an Exempt
Person), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock then outstanding. From and after the occurrence of an
event specified in Section 13(a) hereof, any Rights that theretofore have not
been exchanged pursuant to this Section 24(a) shall thereafter be exercisable
only in accordance with Section 13 and may not be
71
68
exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all of the holders
of the Rights so exchanged at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
72
69
(c) The Company may at its option and, in the event that there
shall not be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit an exchange of Rights as contemplated in
accordance with this Section 24, the Company shall substitute to the extent of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock or
fractions thereof (or equivalent preferred shares as such term is defined in
Section 11(b)) such that the current per share market price (determined
pursuant to Section 11(d) hereof) of one share of Preferred Stock (or
equivalent preferred share) multiplied by such number or fraction is equal to
the current per share market price of one share of Common Stock (determined
pursuant to Section 11(d) hereof) as of the date of such exchange).
Section 25. Notice of Certain Events. (a) In case the Company
shall at any time after the earlier of the Distribution Date or the Stock
Acquisition Date propose (i) to pay any dividend payable in stock of any class
to the holders of its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of
73
70
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of the Common Stock
and/or Preferred Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least 10 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 10 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Stock and/or
Preferred Stock, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or Section
13 shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such
74
71
event and the consequences of such event to holders of Rights under Section
11(a)(ii) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
BJ Services Company
0000 X.X. Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx Xx. 0000
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Except as otherwise
provided in this Section 27, for so long as the Rights
75
72
are then redeemable, the Company may in its sole and absolute discretion, and
the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of the Rights. At any time when the Rights are no longer redeemable, except as
otherwise provided in this Section 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein, (iii) shorten or
lengthen any time period hereunder, or (iv) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable;
provided that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person), and no such amendment may
cause the rights again to become redeemable or cause the Agreement again to
become amendable other than in accordance with this sentence. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or
amendment shall be made which decreases the Redemption Price. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment.
76
73
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common 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 Right Certificates (and, prior to the Distribution Date, the
Common Stock).
Section 30. Determinations and Actions by the Board of
Directors. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise the rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
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,
without limitation, a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or
77
74
made by the Board of Directors of the Company in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement or applicable to this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right
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 to
be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
78
75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the day and year first above
written.
Attest: BJ Services Company
By By
-------------------------- -------------------------
Name: Name:
Title: Title:
Attest: First Chicago Trust Company
of New York
By By
------------------------- --------------------------
Name: Name:
Title: Title:
79
EXHIBIT A
FORM OF AMENDED
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
BJ SERVICES COMPANY
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
--------------------
BJ Services Company, a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolution was duly adopted by
the Board of Directors of the Company as required by Section 151 of the General
Corporation Law of the State of Delaware at a meeting duly called and held on
September 26, 1996:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Company's
Certificate of Incorporation, as amended to date (hereinafter called the
"Certificate of Incorporation"), the Board of Directors on January 5, 1994
adopted a resolution creating a series of shares of Preferred Stock, par value
$1.00 per share, designated as Series Two Junior Participating Preferred Stock
and filed such designation with the Secretary of State of Delaware on January
6, 1994, no shares of which have been issued as of September 26, 1996; and the
Board of Directors on September 26, 1996 adopted the following resolution to
amend and restate the terms of such Preferred Stock; and be it further
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the Delaware
General Corporation Law and the Certificate of Incorporation, the Series Two
Junior Participating Preferred Stock of the Corporation heretofore created be,
and that the designation thereof and the powers, designations, preferences and
relative, participating, optional or other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are hereby
amended and restated as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 200,000. Such number of shares may be increased or
decreased by
A-1
80
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Company convertible
into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock of the Company (the "Preferred Stock") (or any
similar stock) ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock, par value $.10 per share, of the
Company (the "Common Stock") and of any other stock of the Company ranking
junior to the Series A Preferred Stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of January,
April, July, and October in each year (each such date being referred to herein
as a "Dividend Payment Date"), commencing on the first Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A
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, declared on the Common Stock since the immediately
preceding Dividend Payment Date or, with respect to the first Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Company shall at any time after September
26, 1996 declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A 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 Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a
A-2
81
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 Dividend Payment Date and the next subsequent Dividend
Payment Date, a dividend of $10 per share on the Series A Preferred Stock shall
nevertheless be payable, when, as and if declared, on such subsequent Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on outstanding shares of Series A Preferred Stock
from the Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for the
first 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 Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from
such Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights;
(A) Subject to the provision for adjustment hereinafter set
forth and except as otherwise provided in the Certificate of
Incorporation or required by law, each share of Series A Preferred Stock
shall entitle the holder thereof to 1000 votes on all matters upon which
the holders of the Common Stock of the Company are entitled to vote. In
the event the Company shall at any time after September 26, 1996 declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A
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
A-3
82
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or in any other Certificate of Designations creating a
series of Preferred Stock or any similar stock, and except as otherwise
required by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock and any other capital stock of the
Company having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not earned or declared, on
shares of Series A Preferred Stock outstanding shall have been paid in
full, the Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (as to
dividends) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as to
dividends) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Company may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the Company
ranking junior (as to dividends and upon dissolution, liquidation
or winding up) to the Series A Preferred Stock or rights,
warrants or options to acquire such junior stock;
A-4
83
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
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 Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their retirement 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 any conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of the Common Stock or of shares of any other stock of
the Company ranking junior, upon liquidation, dissolution or winding up, to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned
or declared, to the date of such payment, provided that the holders of shares
of Series A Preferred Stock shall be entitled to receive an aggregate amount
per share, subject to the provision for adjustment hereinafter set forth, equal
to 1000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (B) to the holders of shares of stock ranking on a
parity upon liquidation, dissolution or winding up with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and
all such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up. In the event, however, that there are not sufficient assets available to
permit payment in full of the Series A liquidation preference and the
liquidation preferences of all other classes
A-5
84
and series of stock of the Company, if any, that rank on a parity with the
Series A Preferred Stock in respect thereof, then the assets available for such
distribution shall be distributed ratably to the holders of the Series A
Preferred Stock and the holders of such parity shares in the proportion to
their respective liquidation preferences. In the event the Company shall at
any time after September 26, 1996 declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in clause (A) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are converted into, exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly converted into, exchanged for or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1000
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 converted, exchanged or converted. In the event the Company
shall at any time after September 26, 1996 declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
conversion, exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable from any holder.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding
A-6
85
up of the Company, junior to all other series of Preferred Stock and senior to
the Common Stock.
Section 10. Amendment. If any proposed amendment to the
Certificate of Incorporation (including this Certificate of Designations) would
alter, change or repeal any of the preferences, powers or special rights given
to the Series A Preferred Stock so as to affect the Series A Preferred Stock
adversely, then the holders of the Series A Preferred Stock shall be entitled
to vote separately as a class upon such amendment, and the affirmative vote of
two-thirds of the outstanding shares of the Series A Preferred Stock, voting
separately as a class, shall be necessary for the adoption thereof, in addition
to such other vote as may be required by the General Corporation Law of the
State of Delaware.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
A-7
86
IN WITNESS WHEREOF, this Certificate of Designations is executed
on behalf of the Company by its President and attested by its Secretary this
26th day of September, 1996.
-----------------------------------
[Title]
Attest:
------------------------------
Secretary
A-8
87
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
---- ---
NOT EXERCISABLE AFTER JANUARY 17, 2004 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON
(AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
BJ SERVICES COMPANY
This certifies that ___________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of September 26, 1996 as the same may be amended
from time to time (the "Rights Agreement"), between BJ Services Company, a
Delaware corporation (the "Company"), and First Chicago Trust Company of New
York (the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M., New York City time, on January 17, 2004 at the office or agency
of the Rights Agent designated for such purpose, or of its successor as Rights
Agent, one one-thousandth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), of the Company, at a purchase price of $150 per one one-thousandth of
a share of Preferred Stock (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of one one-thousandths of a share of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of September 26, 1996 based
on the Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price, the number of one one-thousandths of a share of
Preferred Stock (or other securities or property) which may be purchased upon
the exercise of the Rights and the number of Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
B-1
88
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for shares of Preferred Stock or shares of the Company's Common Stock, par
value $.10 per share.
No fractional shares of Preferred Stock or Common Stock will be
issued upon the exercise or exchange of any Right or Rights evidenced hereby
(other than fractions of Preferred Stock which are integral multiples of one
one-thousandth 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 Right Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of the
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise or exchange 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
B-2
89
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-3
90
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ______.
ATTEST: BJ Services Company
By By
------------------------------ ------------------------------
Countersigned:
------------------------------,
as Rights Agent
By
------------------------------
Authorized Signature
B-4
91
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfer unto
-----------------------------------------------------
------------------------------------------------------------------------------
Please print name and address of transferee)
------------------------------------------------------------------------------
Rights represented by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated:
-----------------
--------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program
--------------------------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being assigned to, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
--------------------------------------
Signature
B-5
92
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To BJ Services Company:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the
shares of Preferred Stock (or other securities or property) issuable upon the
exercise of such Rights and requests that certificates for such shares of
Preferred Stock (or such other securities) be issued in the name of:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivery to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
--------------------
-----------------------------------
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program.
B-6
93
Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement)
-----------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
B-7
94
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On January 5, 1994 the Board of Directors of BJ Services Company
(the "Company") declared a dividend of one preferred share purchase right (an
"Original Right") for each outstanding share of common stock, par value $.10
per share of the Company (the "Common Stock"). The dividend was paid to the
stockholders of record as of the close of business on January 17, 1994. On
September 26, 1996 the Board of Directors amended the Original Rights in their
entirety to represent a right (a "Right") to purchase one one-thousandth of a
share of Series A Junior Participating Preferred Stock, $1.00 par value
("Preferred Stock"), of the Company at a price of $150 (as the same may be
adjusted, the "Purchase Price"). The description and terms of the Rights are
set forth in an Amended and Restated Rights Agreement (as the same may be
amended from time to time, the "Rights Agreement") dated as of September 26,
1996, between the Company and First Chicago Trust Company of New York, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (with
certain exceptions an "Acquiring Person") have acquired beneficial ownership of
15% or more of the outstanding shares of Common Stock or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 15% or more of
the outstanding shares of Common Stock (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced by such Common Stock
certificate.
The Rights Agreement provides that, until the Distribution Date
(or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption or expiration of the Rights), Common Stock certificates
will contain a notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for shares of Common Stock
outstanding as of September 26, 1996, even without such notation or a copy of
this Summary of Rights, will also constitute the transfer of the
95
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on January 17, 2004 (the "Final Expiration Date"), unless
the Final Expiration Date is advanced or extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock or (iii) upon
the distribution to holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The Rights are also subject to adjustment in the event of a stock
dividend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled, when,
as and if declared, to a minimum preferential quarterly dividend payment of $10
per share but will be entitled to an aggregate dividend of 1000 times the
dividend declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Preferred Stock
will be entitled to a minimum preferential liquidation payment of $100 per
share (plus any accrued but unpaid dividends) but will be entitled to an
aggregate payment of 1000 times the payment made per share of Common Stock.
Each share of Preferred Stock will have 1000 votes, voting together with the
Common Stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of Common Stock are converted or exchanged, each
share of Preferred Stock will be entitled to receive 1000 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions.
2
96
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest in
a share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right and payment
of the Purchase Price, that number of shares of Common Stock having a market
value of two times the Purchase Price.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of shares
of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent), which number of shares at the time of
such transaction will have a market value of two times the Purchase Price.
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or a fractional share of Preferred Stock (or of a share of a class or series of
the Company's preferred stock having similar rights, preferences and
privileges) of equivalent value, per Right (subject to adjustment).
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 will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such,
the Board of Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (the "Redemption Price"). The redemption
of the Rights may
3
97
be made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
For so long as the Rights are then redeemable, the Company may,
except with respect to the redemption price, amend the Rights in any manner.
After the Rights are no longer redeemable, the Company may, except with respect
to the redemption price, amend the Rights in any manner that does not adversely
affect the interests of holders of 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.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A/A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as the same may be amended from time to time, which is hereby incorporated
herein by reference.
4
