SOUTHWESTERN ENERGY COMPANY
AND
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
-------------------------
Amended and Restated Rights Agreement
Dated as of April 12, 1999
TABLE OF CONTENTS
Section Page
Section l. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................6
Section 3. Issue of Right Certificates.....................................................................6
Section 4. Form of Right Certificates......................................................................7
Section 5. Countersignature and Registration...............................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates........................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................9
Section 8. Cancellation and Destruction of Right Certificates.............................................10
Section 9. Reservation and Availability of Capital Stock..................................................10
Section 10. Holders of Record.............................................................................12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights............................12
Section 12. Certification of Adjusted Purchase Price or Number of Shares..................................20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..........................20
Section 14. Fractional Rights and Fractional Shares.......................................................23
Section 15. Rights of Action..............................................................................24
Section 16. Agreement of Right Holders....................................................................24
Section 17. Right Certificate Holder Not Deemed a Stockholder.............................................25
Section 18. Concerning the Rights Agent...................................................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent.....................................25
Section 20. Duties of Rights Agent........................................................................26
Section 21. Change of Rights Agent........................................................................28
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Section Page
Section 22. Issuance of New Right Certificates............................................................29
Section 23. Redemption....................................................................................29
Section 24. Exchange......................................................................................30
Section 25. Notice of Certain Events......................................................................31
Section 26. Notices.......................................................................................32
Section 27. Supplements and Amendments....................................................................33
Section 28. Successors....................................................................................33
Section 29. Benefits of this Agreement....................................................................33
Section 30. Severability..................................................................................34
Section 31. Determinations and Actions by the Board of Directors, etc.....................................34
Section 32. Governing Law.................................................................................34
Section 33. Counterparts..................................................................................34
Section 34. Descriptive Headings..........................................................................35
Exhibit A Form of Right Certificate
Exhibit B Summary of Rights to Purchase Shares of Common Stock
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AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (this "Agreement or
"Amended and Restated Rights Agreement"), dated as of April 12, 1999, between
Southwestern Energy Company, an Arkansas corporation (the "Company"), and First
Chicago Trust Company of New York (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on May 5, 1989 (the "Declaration Date"), the Board of
Directors of the Company authorized and declared a dividend of one right
representing the right to purchase one share of Common Stock upon the terms and
subject to the conditions set forth in a Rights Agreement, dated May 5, 1989,
between the Company and the Rights Agent (the "1989 Rights Agreement") for each
outstanding share of common stock, $2.50 par value, of the Company outstanding
at the close of business on May 19, 1989 (the "Record Date"), and authorized the
issuance of one Right with respect to each share of Common Stock (as hereinafter
defined) that shall become outstanding between the Record Date and the earlier
of the Distribution Date and the Expiration Date (as such terms are hereinafter
defined), each Right initially representing the right to purchase one share of
Common Stock upon the terms and subject to the conditions hereinafter set forth;
WHEREAS, the Company declared a three-for-one stock split in
1993 and, in connection with such split, the number of Rights was adjusted
pursuant to Section 11 of the 1989 Rights Agreement such that each certificate
for Common Stock outstanding as of the date of this Amended and Restated Rights
Agreement also represents one Right under the 1989 Rights Agreement representing
the right to purchase one share of Common Stock upon the terms and subject to
the conditions set forth in the 1989 Rights Agreement;
WHEREAS, the Board of Directors have authorized and approved
the amendment and restatement in its entirety of the 1989 Rights Agreement in
order to extend the Expiration Date until April 11, 2009 and to make other
changes and provisions that they have determined are necessary or desirable and
do not adversely affect the interests of the holders of the Rights;
WHEREAS, in compliance with the terms of Section 26 of the
1989 Rights Agreement, the Company has (i) delivered to the Rights Agent a
certificate from an appropriate officer of the Company which states that this
Agreement has been approved by the Company's Board of Directors and is in
compliance with the terms of Section 26 of the 1989 Rights Agreement and (ii)
instructed the Rights Agent to execute this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section l. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person (as
hereinafter defined), together with all Affiliates and Associates (as such terms
are hereinafter defined) of such Person,
who or which shall, subsequent to the Declaration Date, become the Beneficial
Owner (as hereinafter defined) of 15% or more of the shares of Common Stock then
outstanding (other than as a result of an Approved Offer (as hereinafter
defined), or (ii) any Person who is an Adverse Person (as hereinafter defined)
or (iii) any Person, together with all Affiliates and Associates of such Person,
who or which is, on the Declaration Date, the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding if, subsequent to the Declaration
Date, such Person, together with all Affiliates and Associates of such Person,
shall increase its Beneficial Ownership of shares of Common Stock by an
additional 1% or more of the shares of Common Stock then outstanding; provided,
however, that (x) a Person shall not become an Acquiring Person if such Person,
together with its Affiliates and Associates, shall become the Beneficial Owner
of 15% or more (in the case of clause (i) above) or an additional 1% or more (in
the case of clause (iii) above) of the shares of Common Stock then outstanding
solely as a result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by the Company,
unless and until such time as such Person shall purchase or otherwise become (as
a result of actions taken by such Person or its Affiliates or Associates) the
Beneficial Owner of additional shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock; (y) "Acquiring Person" shall not
include any Company Entity (as defined below); and (z) "Acquiring Person" shall
not include any Person who becomes the Beneficial Owner of 15% or more (or an
additional 1% or more), of the outstanding shares of Common Stock but who
acquired beneficial ownership of shares of Common Stock inadvertently
(including, without limitation, because (i) such Person was unaware that it
Beneficially Owned 15% or more of the Common Stock or (ii) such Person was aware
of the extent of such beneficial ownership but such Person acquired beneficial
ownership of such shares of Common Stock without any plan or intention to change
or influence the control of the Company), and such Person promptly (and in any
event within ten Business Days after being so requested by the Company) enters
into an irrevocable commitment satisfactory to the Company's Board of Directors
promptly (and in any event within twenty Business Days or such shorter period as
shall be determined by the Company's Board of Directors) to divest, and
thereafter promptly divests as required by such commitment, sufficient shares of
Common Stock so that such Person (together with all of its Affiliates and
Associates) ceases to be a Beneficial Owner of 15% or more of shares of Common
Stock.
(b) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors of the Company upon a determination
that such Person, alone or together with its Affiliates and Associates, has, at
any time after the Declaration Date, become the Beneficial Owner of a number of
shares of Common Stock that the Board of Directors determines to be substantial
(which amount shall in no event be less than 10% of the shares of Common Stock
then outstanding) and a determination by a majority of the Board of Directors
after reasonable inquiry and an investigation, including consultation with such
persons as the Board of Directors shall deem appropriate, that (a) as such
Beneficial Ownership by such Person is intended to cause the Company to
repurchase the shares of Common Stock beneficially owned by such Person or to
cause pressure on the Company to take action or enter into a transaction or
series of transactions intended to provide such Person with short-term financial
gain under circumstances where the Board of Directors determines that the best
long-term interest of the Company and its shareholders would not be served by
taking such action or entering into such
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transaction or series of transactions at that time or (b) such Beneficial
Ownership is causing or reasonably likely to cause a material adverse impact on
the business or prospects of the Company. The failure by the Board of Directors
of the Company to declare a Person to be an Adverse Person following such Person
becoming the Beneficial Owner of 10% or more of the outstanding shares of Common
Stock shall not imply that such Person is not an Adverse Person or limit the
Board's right at any time in the future to declare such Person to be an Adverse
Person.
(c) "Affiliate" shall have the meaning ascribed to such term
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
Amended and Restated Rights Agreement.
(d) "Approved Offer" shall mean a tender or exchange offer for
all outstanding shares of Common Stock that is at a price and on terms approved,
prior to the acceptance for payment of shares under such tender or exchange
offer, by the Board of Directors of the Company based upon the prior
recommendation of a majority of its Independent Directors at a time at which
there are at least two Independent Directors.
(e) "Associate" shall include (x) any Person included in the
definition of "Associate" in Rule 12b-2 under the Exchange Act, as in effect on
the date of this Amended and Restated Rights Agreement, and (y) any Affiliate of
any such Person.
(f) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly (as
determined pursuant to Rule 13d-3 or 13d-5 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, directly or indirectly: (A) the right to
acquire (whether such right is exercisable immediately or only after
the passage of time or the satisfaction of one or more conditions or
both) pursuant to any agreement (other than customary agreements with
and between underwriters and selling group members with respect to a
bona fide public offering of securities), arrangement or understanding
(whether in writing or not), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights described herein),
warrants or options, or otherwise (provided, however, that a Person
shall not be deemed to be the Beneficial Owner of, or to beneficially
own, any security solely because such security has been tendered
pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is
accepted for payment or exchange); or (B) the right to vote or dispose
of, or to direct the vote or disposition of, alone or in concert with
others, pursuant to any agreement, arrangement or understanding
(whether in writing or not); provided, however, that a Person shall not
be deemed pursuant to this clause (ii)(B) to be the Beneficial Owner
of, or to beneficially own, any security if the agreement, arrangement
or understanding to vote, or direct the vote of, such security (1)
arises solely from a revocable proxy or
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consent given to such Person or any of such Person's Affiliates or
Associates in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act; 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 (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities),
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in clause (ii) (B) of this paragraph (c))
or disposing of any securities of the Company.
If a Person shall be deemed to be the Beneficial Owner of any
securities which are not outstanding, such securities shall be deemed
to be outstanding for purposes of determining the percentage of Common
Stock beneficially owned by such Person but all other securities
(including securities of the same class) not actually outstanding shall
not be deemed outstanding for such purposes.
(e) "Board of Directors" shall mean the Board of Directors of
the Company.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York or
Illinois are authorized or obligated by law or executive order to close.
(g) "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.
(h) "Common Stock" shall mean the common stock $0.10 par
value, of the Company (as it may be constituted from time to time during the
term of this Agreement), except that "Common Stock" when used with reference to
any Person other than the Company (or, in the case of a transaction referred to
in Section 13 hereof, if the Company is the successor to the other Person
referred to in clause (a), (b) or (c) of Section 13, or is the surviving
corporation, when thereafter used with reference to the Company) shall mean the
capital (or, in the case of a partnership or other unincorporated entity, the
equivalent equity interest) with the greatest voting power of such Person,
together with all rights and benefits (however denominated or constituted)
relating to such capital stock (including, without limitation, any rights or
warrants to acquire additional shares of such capital stock or other securities
or assets, or to participate in any trust for the benefit of holders of such
shares, or to share in the benefits of any agreements or other arrangements for
the benefit of such holders), whether or not such rights are yet exercisable,
and together with any other securities which are represented by the certificates
for such shares or are transferred in connection with transfers of such shares.
(i) "Company Entity" shall mean the Company, any wholly owned
Subsidiary (as hereinafter defined) of the Company, any employee benefit plan or
employee stock plan of
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the Company or of any of its wholly owned Subsidiaries, or any Person holding
Common Stock which was organized, appointed or established by the Company or any
of its wholly owned Subsidiaries for or pursuant to the terms of any such plan.
(j) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(k) "Stock Acquisition Date" shall mean the time and day of
the first public announcement (which for purposes of this definition, shall
include, without limitation, the filing of a report pursuant to the Exchange
Act) by the Company or an Acquiring Person containing information indicating
that an Acquiring Person has become such. For purposes hereof, in the event that
it is publicly announced that any Person has acquired beneficial ownership of
sufficient shares of Common Stock to cause such Person to become an Acquiring
Person under clause (i) or clause (iii) of the definition of Acquiring Person,
such Person shall not be deemed an Acquiring Person for up to ten Business Days
(or such shorter period as shall be determined by the Board of Directors) if
such Person advises the Company that it acquired beneficial ownership
inadvertently (within the meaning of clause (z) of the proviso to the definition
of an Acquiring Person) and the Board of Directors is continuing to determine
whether such Person qualifies for the exclusion contained in such clause (z).
(l) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity as to which such Person beneficially owns sufficient
voting securities or other ownership interests having ordinary voting power
sufficient, in the absence of contingencies, to elect at least a majority of its
directors (or individuals performing similar functions).
(m) The terms set forth below are defined in the Sections
indicated below:
Term Section
Act 7 (c)
Common Stock Equivalent 11 (a) (iv) (B)
current market price 11 (d)
Current Value 11 (a) (iv) (A)
Declaration Date Recitals
Distribution Date 3 (a)
Exchange Act 1 (c)
Exchange Ratio 24
Expiration Date 7 (a)
Final Expiration Date 7 (a)
Independent Director 23
Principal Party 13(b)
Proposed Acquiror 23
Purchase Price 7 (b)
Record Date Recitals
Redemption Price 23
Right Recitals
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Right Certificates 3 (a)
Rights Agent Recitals
Section 13 Event 13(a)
Security 11 (d) (i)
Spread 11 (a) (iv) (A)
Substitution Period 11 (a) (iv)
Summary of Rights 3 (b)
Trading Day 11(d)(i)
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 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. In the event that the
Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates. (a) Until the close of
business on the earlier of (i) the tenth Business Day after the Stock
Acquisition Date (including any such date which is after the Declaration Date
even if prior to the Record Date), and (ii) the tenth Business Day (or such
later day as may be determined by action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring Person) after the
date of the commencement of, or the first public announcement of the intent of
any Person (other than a Company Entity) to commence (which intention to
commence remains in effect for five Business Days after such announcement), a
tender or exchange offer the consummation of which would result in any person
becoming an Acquiring Person (the earlier of the dates referred to in clauses
(i) and (ii) above being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock shall also
be deemed (other than for purposes of this Section 3 and any provision of this
Agreement referring to the issuance of Rights Certificates) to be Right
Certificates (as such term is hereinafter defined)) and not by separate Right
Certificates, and (y) the Rights (and the right to receive Right Certificates)
will be transferable only simultaneously and together with the transfer of the
underlying shares of Common Stock. As soon as practicable after the Distribution
Date, subject to Section 11(a)(iii) hereof, the Company shall prepare and
execute and the Rights Agent will countersign, and the Company will send or
cause to be sent, by first-class, postage-prepaid mail, to each record holder of
the Common Stock as of the close of business on the Distribution Date, as shown
by the records of the Company, at the address of such holder shown on such
records, a right certificate, substantially in the form of Exhibit A hereto (a
"Right Certificate"), evidencing one Right for each share of Common Stock so
held, subject to adjustment as herein provided. As of and after the close of
business on the Distribution Date, the Rights will be evidenced solely by such
Right Certificates and may be transferred only by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock.
6
(b) As soon as practicable after the date of this Amended and
Restated Agreement, the Company will mail a copy of the Summary of Rights to
Purchase Common Stock in the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of the
Common Stock as of the close of business on the Record Date, as shown by the
records of the Company, at the address of such holder shown on such records.
With respect to certificates for Common Stock outstanding as of the close of
business on the date of this Amended and Restated Agreement or issued prior to
the Distribution Date, until the Distribution Date, the Rights will be evidenced
solely by such certificates registered in the names of the holders thereof
(whether or not such certificates contain the legend contemplated by Section
3(c) of the 1989 Rights Agreement). Until the Distribution Date (or the earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificate for Common Stock outstanding as of the close of business on the
Record Date shall also constitute the transfer of the Rights associated with the
shares of Common Stock represented thereby.
The Company will mail to any record holder of a Right
(including, prior to the Distribution Date, a record holder of shares of Common
Stock) a copy of this Rights Agreement, without charge, within ten Business Days
of a written request therefor.
(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the date of this Amended and Restated
Agreement and prior to the earlier of the Distribution Date and the Expiration
Date, and all certificates for shares of Common Stock issued or which become
outstanding after the date of this Amended and Restated Agreement but prior to
the earlier of the Distribution Date and the Expiration Date, shall have
impressed on, printed on, written on or otherwise affixed to them substantially
the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Southwestern
Energy Company and First Chicago Trust Company of New York, dated as of
May 5, 1989, as amended by the Amended and Restated Rights Agreement
dated as of April 12, 1999 and as it may from time to time be further
supplemented or amended pursuant to its terms (the "Rights Agreement"),
the terms of which are hereby incorporated by reference and a copy of
which is on file at the principal executive offices of Southwestern
Energy 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. Southwestern Energy
Company will mail to the registered holder of this certificate a copy
of the Rights Agreement without charge within ten business days after
receipt of a written request therefor. Under certain circumstances
provided for in the Rights Agreement, Rights issued to, or beneficially
owned by any Person who is an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement)
or any subsequent holder of such Rights shall become null and void.
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 of Exhibit A hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may
7
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or 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 and 22
hereof, the Right Certificates, whenever distributed, shall be dated as of the
Record Date, and on their face shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth therein at the
Purchase Price (as such term is hereinafter defined), but the number and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein. To the extent
provided in Section 11(a)(iii) hereof, certain Right Certificates shall contain
the legend provided for therein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President , its Chief Executive Officer, any Vice President, its
Treasurer or its Secretary, either manually or by facsimile signature, and have
affixed thereto the Company's seal or a facsimile thereof which 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
so countersigned. In case any officer of the Company who shall have signed or
attested 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 with the same force and effect as though
the person who signed or attested such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed or attested
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 or
attest such Right Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or such other office
designated by it for such purpose, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the name(s) and
address(es) of the holder(s) of each Right Certificate, the number of Rights
evidenced on its face by each Right Certificate, the certificate number of each
Right Certificate and the date of each Right Certificate.
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)(iii) and 14 hereof, at any
time after the close of business on the Distribution Date, and at or prior to
the close of business on the Expiration Date, any 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 shares of Common Stock (or other securities, cash
and/or assets, as the case may be), as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
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 at the principal office or such
8
other office of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate unless and
until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side thereof and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Associates and Affiliates of the foregoing as the
Company shall reasonably request. 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, by the holder of Rights, 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) 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 an indemnity or security reasonably satisfactory to the Company and the
Rights Agent, and reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and 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) Subject to Sections 11(a)(iii) and (iv), the registered holder of
any Right Certificate may exercise the Rights evidenced thereby in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and certificate on the
reverse side thereof duly executed, to the Rights Agent at its principal office
or such other office designated by it for such purpose, together with payment of
the Purchase Price for each share of Common Stock (or other securities, cash
and/or assets, as the case may be) as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on April 11, 2009 (the "Final
Expiration Date"), and (ii) the date and time at which the Rights are redeemed
as provided in Section 23 hereof, (iii) the date and time at which the Rights
are exchanged as provided in Section 24 hereof, or (iv) the time at which the
rights expire pursuant to Section 13(d) (such earliest date and time being
referred to herein as the "Expiration Date").
(b) The purchase price (the "Purchase Price") for each share
of Common Stock pursuant to the exercise of a Right shall initially be $40,
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) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase and certificate duly executed, accompanied by payment of the Purchase
Price for the shares (or other securities, cash and/or assets, as the case may
be) to be purchased and an amount equal to any applicable transfer tax (as
determined by the Rights Agent) in cash, or by certified check or bank draft
payable to the order of the Company, the Rights Agent shall thereupon promptly
(i) requisition from any transfer agent of the shares of Common Stock (or make
available, if the Rights Agent is the
9
transfer agent) certificates for the number of shares of Common Stock to be
purchased and the Company hereby irrevocably authorizes such transfer agent to
comply with all such requests, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates, 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, deliver any such
cash, promptly after its receipt, to or upon the order of the registered holder
of such Right Certificate. In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or property are available for
distribution by the Rights Agent, if and when appropriate. Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of shares of Common Stock or other securities upon exercise of a Right for a
reasonable period, not in excess of 90 days, during which the Company seeks to
register under the Securities Act of 1933 (the "Act"), as amended, and any
applicable securities law of any other jurisdiction, the shares of Common Stock
or such other securities to be issued pursuant to the Rights.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the 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
Sections 7(e), 11(a)(iii) and 14 hereof.
(e) Notwithstanding any other provision of this Agreement,
neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to a registered holder of any Right Certificate upon the
occurrence of any purported transfer or exercise as set forth in this Section 7
unless and until the registered holder shall have completed and signed the
certificate contained in the form of election to purchase shares set forth on
the reverse side thereof and shall have provided such additional evidence of the
identity of the Beneficial Owner and former Beneficial Owner (and Associates and
Affiliates of the foregoing) 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 Certificate shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all 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. Reservation and Availability of Capital Stock. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and
10
unissued Common Stock or other securities or any Common Stock or other
securities held in its treasury, the number of shares of Common Stock or shares
of other securities that, as provided in this Agreement (including Section
11(a)(iv) hereof), will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all Common Stock and/or other
securities delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable shares.
(c) The Company 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
any Common Stock and/or other securities, as the case may be, upon the exercise
of Rights. The Company shall not however, be required to pay any transfer tax
which may be payable in respect of any transfer involved in the transfer or
delivery of Right Certificates or the issuance or delivery of certificates or
depositary receipts for Common Stock and/or other securities, as the case may
be, in a name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates or depositary receipts for Common Stock and/or other securities, as
the case may be, upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
(d) So long as the Common Stock (and/or other securities)
issuable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(e) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after occurrence of the Stock
Acquisition Date as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iv) hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act and the rules and regulations thereunder) until the earlier of (A) the date
as of which the Rights are no longer exercisable for such securities and (B) the
expiration of the Rights. The Company will also take such action as may be
appropriate to ensure compliance with the securities or "blue sky" laws of the
various states. The Company may temporarily suspend, in accordance with
applicable law, for a period of time not to exceed 90 days after the date set
forth in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the
11
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
Section 10. Holders of Record. Each person in whose name any
certificate for Common Stock and/or other securities, as the case may be, is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Common Stock and/or other securities, as the
case may be, represented thereby on, and such 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 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 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
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number and kind of securities, or
fractions thereof, covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare or pay a dividend on the Common Stock,
payable in shares of Common Stock, (B) subdivide the outstanding shares of
Common Stock, (C) combine or consolidate the outstanding shares of Common Stock
into a smaller number of shares of Common Stock or (D) issue any shares of its
capital stock in a reclassification of the Common 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, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
split, combination, consolidation or reclassification, and the number and kind
of shares of capital stock issuable upon exercise of a Right on such date, shall
be proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
transfer books of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
split, combination, consolidation or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
12
(ii) In the event that a Stock Acquisition Date
occurs, proper provision shall be made so that each holder of a Right
(except as otherwise provided in clause (iii) below) thereafter shall
have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of shares of Common Stock for which a Right is then
exercisable and (y) dividing that product by 50% of the current market
price per share of the Common Stock (determined pursuant to Section
11(d) hereof) on the Stock Acquisition Date, and, at the time such
provision is made the Company shall cause to be reserved out of its
authorized but unissued (or treasury) shares of Common Stock, the
lesser of (m) the number of shares of Common Stock that will be
sufficient to permit the exercise in full of all outstanding Rights
(other than those referred to in clause (iii) below) and (n) the number
of shares of Common Stock which are authorized by the Company's
certificate of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights.
(iii) Notwithstanding any provision of this
Agreement, from and after the Stock Acquisition Date, any Rights
beneficially owned by (p) an Acquiring Person or any Associate or
Affiliate thereof, (q) a transferee of an Acquiring Person (or
Associate or Affiliate thereof) who becomes the transferee of such
Rights concurrently with such Acquiring Person becoming such or at any
time thereafter, or (r) a transferee of an Acquiring Person (or
Associate or Affiliate thereof) who becomes a transferee prior to the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether not for consideration) by the Acquiring
Person to holders of its stock or other equity or to any Person with
whom the Acquiring Person has any continuing agreement, arrangement or
understanding, whether or not in writing, regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding, whether
or not in writing, which has as a primary purpose or effect the
avoidance of this Section 11(a)(iii), shall become null and void, and
any existing or subsequent holder of such Rights shall thereafter have
no right to exercise such Rights under any provision of this Agreement.
Any Right Certificate issued pursuant to Section 3 or Section 22 hereof
that represents Rights beneficially owned by any Person referred to in
clause (p), (q) or (r) above, and any Right Certificate issued pursuant
to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who is, was or be came an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person (as those
terms are defined in the Rights Agreement). This Right Certificate and
the Rights represented hereby may be or may become null and void in the
circumstances specified in the Rights Agreement.
The Company shall use all reasonable efforts to comply with this clause (iii),
but neither it nor the Rights Agent shall have any liability to any Person as a
result of the failure to make any
13
determination with respect to an Acquiring Person, or its Associates, Affiliates
or to transferees of the foregoing.
(iv) In the event that the number of shares of Common
Stock which are authorized by the Company's articles of incorporation
but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing clause (ii) of this
Section 11(a), the Company shall:
(A) determine the excess of (1) the value (the "Current
Value") of the shares of Common Stock issuable upon the exercise of a
Right pursuant to the foregoing clause (ii) of this Section 11(a)
(assuming that there were a sufficient number of authorized but
unissued shares to permit exercise in full of all outstanding Rights
for Common Stock) over (2) the then current Purchase Price (such excess
being referred to herein as the "Spread"), and
(B) with respect to each Right, to the extent permitted by
applicable law and any contractual restrictions binding on the Company,
make adequate provision to substitute for such shares of Common Stock
issuable upon exercise of a Right pursuant to the foregoing clause (ii)
of this Section 11(a), upon payment of the Purchase Price, (1) Common
Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the
Board of Directors of the Company has deemed to have the same value as
shares of Common Stock (such shares of preferred stock being referred
to herein as "Common Stock Equivalents")), (2) debt securities of the
Company, (3) cash, (4) other assets, or (5) any combination of the
foregoing (provided, that in making any such provision, Rights shall,
to the fullest extent feasible in view of the number of shares of
authorized Common Stock not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights, be exercisable for
Common Stock), in each case having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors
of the Company;
provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
Stock Acquisition Date, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread.
Notwithstanding the immediately preceding sentence, if the Board of Directors of
the Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not to more than ninety (90) days after
the Stock Acquisition Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period, as may be
extended, being referred to herein as the "Substitution Period"). To the extent
that the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iv), the
14
Company (x) shall provide, subject to the foregoing clause (iii) of this Section
11(a), 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 first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iv), the terms of any Common Stock Equivalent shall be
determined so that such Common Stock Equivalent shall have the same value as the
Common Stock on the Stock Acquisition Date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase shares of Common Stock (or shares having the same
rights, privileges, and preferences as the Common Stock ("equivalent common
shares")) or securities convertible into Common Stock or equivalent common
shares at a price per share of Common Stock or equivalent common share (or
having a conversion price per share, if a security convertible into Common Stock
or equivalent common shares) less than the current market price per share of
Common Stock (as defined in Section 11(d) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the number of shares of Common
Stock and equivalent common shares outstanding on such record date plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock and/or equivalent common shares to be so
offered (and/or the aggregate initial conversion price of the convertible
securities to be so offered) would purchase at such current market price an of
which the denominator shall be the number of shares of Common Stock and
equivalent common shares outstanding on such record date plus the number of
additional shares of Common Stock and/or equivalent common shares to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
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. Common Stock owned by or held for the account of
the Company or any of its Subsidiaries shall not be deemed outstanding for the
purpose of any 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 the 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 Common 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 periodic cash dividend at a rate per share not
in excess of the greater of (x) 200% of the rate of the last periodic cash
dividend theretofore paid and (y) $0.10 per quarter (as such amount may be
appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction) or a dividend payable in shares of
15
Common Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current market price per share of Common Stock (as defined in 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
rights or warrants applicable to one share of Common Stock and of which the
denominator shall be such current market price per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" for any security (a "Security" for purposes of this
Section 1l(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current market price per
share of the Security is determined during a period following the announcement
by the issuer of such Security of a dividend or distribution on such Security
payable in shares of such Security or securities convertible into (or
exercisable or exchangeable for) shares of such Security, or any subdivision,
split, combination, consolidation or reclassification of such Security, and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution or the record date for such subdivision, split,
combination, consolidation or reclassification, then, and in each such case, the
current market price shall be appropriately adjusted to reflect ex-dividend or
ex-distribution trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the 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 shares of the Security are listed or admitted to trading or, if the
shares of the Security are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
or any successor ("NASDAQ") or such other system then in use, or, if on any such
date the shares of the Security 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 Security selected by the Board of Directors
of the Company. If on such date no such market maker is making a market in the
Security, the fair value of such shares on such date as determined in good faith
by the Board of Directors of the Company shall be used, such determination to be
described in a statement filed with the Rights Agent. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of the Security are listed or admitted to trading is open for the
transaction of business or, if the shares of the Security are not listed or
admitted to trading on any
16
national securities exchange but are quoted on NASDAQ, a day on which NASDAQ is
in operation or if the shares of the Security are neither listed nor admitted to
trading on any national securities exchange nor quoted on NASDAQ, a Business
Day.
(ii) For the purpose of any computation hereunder, the
"current market price" of the Common Stock shall be determined in accordance
with the method set forth in Section 11(d)(i), except that if the Common Stock
is not publicly traded, the "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 and shall be conclusive for all purposes.
(e) Notwithstanding anything herein to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; provided, however
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one-thousandth of a share of Common Stock.
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 mandates such adjustment and (ii)
the date of the expiration of the right to exercise any Rights.
(f) In the event that at any time, as a result of an
adjustment made pursuant to Section 11(a) or Section 13(a), the holder of any
Right thereafter exercised shall become entitled to receive any securities other
than Common Stock, thereafter the number or amount of such other securities so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the securities contained in Sections 11(a), (b), (c),
(e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 of this Agreement with respect to the Common Stock shall apply on like
terms to any such other securities.
(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 shares of Common 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) of this Agreement, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b) and (c) of
this Agreement, 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 shares of Common Stock (calculated to the nearest
one-thousandth of a share of Common Stock) obtained by (i) multiplying (x) the
number of shares of Common Stock 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.
17
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights held by each
holder of Rights, in substitution for any adjustment in the number of shares of
Common 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 shares of Common Stock for which it was exercisable
immediately prior to such adjustment. Each holder of a Right held of record
prior to such adjustment of the number of Rights shall become the holder of that
number of Rights (calculated to the nearest one hundredth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made, and information
as to the manner in which such adjustment is to be effected. 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 not been
issued, in the case of a stock split, stock dividend or similar event, such
adjustment in the number of Rights held by each existing holder of Rights shall
be effected (unless the Board of Directors otherwise elects), by allocating the
adjusted number of Rights proportionately among all shares held by such holder
immediately after such stock split, stock dividend or other event. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date, Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of 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 shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share of Common Stock and the number of shares of
Common 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 Common
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 Common Stock
at such adjusted Purchase Price.
(1) 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
18
elect to defer until the occurrence of such event the issuing to the holder of
any Right exercised after such record date of the Common Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the Common 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 of Common Stock 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 the Company's Board of Directors shall, in
its sole discretion, determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance wholly for cash
of any Common Stock at less than the current market price, (iii) issuance wholly
for cash of Common Stock or securities which by their terms are convertible into
or exercisable or exchangeable for Common Stock, (iv) Common Stock dividends or
(v) issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a wholly-owned Subsidiary of the Company in a transaction which does not
violate Section 11(o) hereof), (ii) merge with or into any other Person (other
than a wholly-owned Subsidiary of the Company in a transaction which does not
violate Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which does not violate Section 11(o)
hereof), if (x) at the time of or immediately after such consolidation, merger,
sale or transfer there are any charter or by-law provisions or any rights,
warrants or other instruments or securities outstanding or agreements in effect
or other actions taken, which would materially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
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 and
Associates. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after a Stock
Acquisition Date it will not, except as permitted by Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action the purpose of which
is to, or if at the time such action is taken it is reasonably foreseeable that
the effect of such action is to, materially diminish or eliminate the benefits
intended to be afforded by the Rights.
19
Section 12. Certification of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment and
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event (a "Section 13 Event") that, following
the Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any Person or Persons, (y) the Company
shall consolidate with or merge with and into, any Person or Persons, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger (other than, in a case of any transaction described in (x) or (y), a
merger or consolidation which would result in all of the securities generally
entitled to vote in the election of directors ("voting securities") of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the voting securities of Company or such surviving entity
outstanding immediately after such merger or consolidation and holders of such
securities not having changed as a result of such merger or consolidation), or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole and
calculated on the basis of the Company's most recent regularly prepared
financial statements) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which does not
violate Section 11(o) hereof), then, and in each such case (except as provided
in Section 13(d) hereof), proper provision shall be made so that (i) each holder
of a Right, except as provided in Section 11(a)(iii) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement Common Stock and
other securities or assets of the Company, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of Common Stock
of the Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (A) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 13 Event (without taking into account
any adjustment previously made pursuant to Section 11(a)(ii)) and (y) dividing
that product by 50% of the current market price per share of the Common Stock of
such Principal Party (determined pursuant to Section 11(d) hereof) on the date
of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; and (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock in accordance with Section 9 hereof (applying the provisions thereof with
respect to Common Stock of the Company to the Common Stock of such Principal
Party)) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter
20
be applicable, as nearly as reasonably may be possible, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section 13(a):
(A) the Person that is the issuer of any securities into which
Common Shares of the Company are converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer of Common Stock of which has the greatest aggregate
market value or (B) if no securities are so issued, the Person
that is the other party to such merger or consolidation, or,
if there is more than one such Person, the Person the Common
Stock of which has the greatest aggregate market value
(including, if applicable, the Company if it is the surviving
corporation); and
(ii) in the case of any transaction
described in clause (z) of the first sentence of Section
13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to
such transaction or transactions or if the Person receiving
the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons which is the issuer of
Common Stock having the greatest aggregate market value;
provided, however, that in any of the cases described in 13(b)(i) or (b)(ii)
above, (1) if the shares of Common Stock of such Person are not at such time and
have not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the shares of Common Stock of which are
and have been so registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the shares of Common Stock of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the shares of Common Stock having the greatest aggregate market value;
and (3) in case such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint ventures and the Principal
Parties in each such chain shall bear the obligations set forth in this Section
13 in the same ratio as their direct or indirect interests in such Person bear
to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of its authorized shares of Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and that all rights of first refusal or preemptive rights in respect
of the issuance of shares of Common Stock of the Principal Party upon exercise
of the outstanding Rights have been waived and that such
21
transaction shall not result in a default by the Principal Party under this
Agreement, and further providing that, as soon as practicable after the date of
any consolidation, merger, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration
statement under the Act with respect to the Rights and the
securities purchasable upon the exercise of the Rights on an
appropriate form, and use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or
register the Rights and the securities purchasable upon
exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate;
(iii) 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 under the Exchange Act; and
(iv) use its best efforts to list (or
continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirement for
quotation on NASDAQ.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a Stock
Acquisition Date, the Rights which have not theretofore been exercised pursuant
to Section 11(a)(ii) shall thereafter become exercisable in the manner described
in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if: (i) such transaction is
consummated with a Person or Persons who acquired Common Stock pursuant to an
Approved Offer (or an Affiliate of any such Person or Persons) as promptly as
reasonably practical (and in any event within one year) following consummation
of such Approved Offer; (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of Common Stock whose shares were purchased pursuant to such Approved
Offer; and (iii) the form of consideration offered in such transaction is the
same as the form of consideration paid pursuant to such Approved Offer. Upon
consummation of any such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
(e) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate 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, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of
22
Common Stock of such Principal Party at less than the then current market price
per share (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 (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special payment, tax or
similar provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13, then, in such event,
the Company shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights (except, prior to the
Distribution Date, as provided in Section 11 hereof) or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market 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 of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the 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, as selected by the
Board of Directors of the Company. If on any such date the Rights are not quoted
by any such organization and no professional market maker is making such 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) Following the occurrence of the Stock Acquisition Date or
a Section 13 Event, the Company shall not be required to issue fractions of
shares of its Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of its Common Stock. In lieu of
fractional shares of its Common Stock, the Company may 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 Common Stock. For purposes of this Section 14(b), the
current market value of a share of Common Stock shall be the closing price of
one share of Common Stock of the Company (as determined pursuant to the
23
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance thereof expressly
waives any 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, other than the rights of action vested in the Rights Agent
pursuant to Section 18, 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, any holder of the Common Stock), may, on his own behalf and
for his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate 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 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 simultaneously and together with the transfer of
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 principal office or such other office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6, Section 7(e) and Section 11(a)
hereof, the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Stock certificate made by anyone
other than the 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; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as
24
a result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its best efforts to have any such
injunction, order, decree or ruling lifted, dissolved or otherwise overturned as
soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of shares of Common Stock or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 of this Agreement), or to receive
dividends or other distributions or to exercise any preemptive or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
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 Agreement, including the costs and expenses of
defending against any claim of liability.
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 shares of Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. 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,
25
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 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 Certificate 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 Certificate
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 Certificate shall have
the full force provided in the Right Certificate and in this Agreement.
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 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 expressly set forth in this Agreement, and
no implied duties or obligations shall be read into this Agreement against the
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:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person or any Affiliate or Associate thereof) be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, President and Chief Executive Officer or the
Vice President-Treasurer and Secretary or the Assistant Treasurer or
the Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates
26
(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 Rights
becoming null and void pursuant to Section 11(a)(iii) hereof); nor
shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of Common Stock or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to
whether any Common Stock or other securities will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will inform the Rights Agent
promptly upon the Company's determination that a Person has become an
Acquiring Person and the Rights Agent will not be responsible for
determining the status of a Person as an Acquiring Person prior to such
notification except as such status may be indicated in the assignment
or election to purchase of a Right Certificate. The Company agrees that
it will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, President and Chief Executive
Officer, or the Vice President-Treasurer and Secretary of the Company,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(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.
27
(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.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to any item therein, 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 by registered or certified mail, and to the
holders of the Right Certificates by first class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent:, as the case may be, and
to each transfer agent of the Common Stock by registered or certified mail, and
to the holders of the Right Certificates by first class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after 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 (i) a corporation, bank or trust company organized and doing business
under the laws of the United States or of any state thereof, in good standing,
having its principal office in the United States of America, which is authorized
under applicable 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 $50,000,000 or (ii) an Affiliate of a corporation described
in clause (i) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall, upon payment of its charges, deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be. Notwithstanding the foregoing provision, in the
28
event of resignation, removal or incapacity of the Rights Agent, the Company
shall have the authority to act as the Rights Agent until a successor Rights
Agent shall have assumed the duties of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date (other than upon exercise or
exchange of a Right) and prior to the Expiration Date, the Company, subject to
Section 11(a)(iii) hereof, (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) the Company shall not be
obligated to issue any Right Certificate if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Company may, by resolution of
its Board of Directors, at its option, at any time prior to the earlier of (x)
the Stock Acquisition Date or (y) the close of business on the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Amended and Restated Rights Agreement (such
redemption price being hereinafter referred to as the "Redemption Price");
provided, however, that in the event that a redemption of the Rights is
proposed, requested or considered at a time at which any Person (a "Proposed
Acquiror") has proposed or publicly announced an intention to propose a
transaction that, if consummated, would cause a Stock Acquisition Date or any of
the events listed in Sections 13(a), (b) or (c) to occur, the Board of Directors
may only act to redeem the rights upon the prior recommendation of a majority of
its Independent Directors at a time at which there are at least two Independent
Directors. "Independent Director" shall mean any member of the Board of
Directors of the Company who is not a proposed Acquiror or an Affiliate,
Associate, representative or nominee of a Proposed Acquiror and who is not an
officer or employee of the Company or any of its Subsidiaries. The redemption of
Rights by the Board of Directors shall 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", as defined in
Section
29
11(d)(i) hereof, of the Common Stock at the time of such Board resolution) or
any other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon adoption of an effective resolution of
the Board of Directors of the Company ordering the redemption of the Rights in
compliance with Section 23(a) (or upon the subsequent satisfaction of all
conditions to such redemption established by such resolution), evidence of which
shall have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within 10 Business Days after the action of the Board of Directors
ordering the redemption of the Rights (or such subsequent satisfaction of all
such conditions), the Company shall give notice of such redemption to the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase any Rights at any time
in any manner other than that specifically set forth in this Section 23, and
other than in connection with the repurchase of Common Stock of the Company
prior to the Distribution Date.
(c) In the event that the Board of Directors adopts an
effective resolution ordering the redemption of the Rights in compliance with
Section 23(a), the Company may, at its option, discharge all of its obligations
with respect to the Rights by (i) issuing a press release announcing the manner
of redemption of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent of
the Common Stock, and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the Company.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after the Stock Acquisition Date
exchange all or part of the then-outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(iii) hereof) for Common Stock (or Common Stock Equivalents) 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
of this Amended and Restated Rights Agreement (such exchange ratio being
hereinafter referred to as the "Exchange Ratio") (provided that if there is then
a Proposed Acquiror, the Rights may not be exchanged without the prior
recommendation of a majority of its Independent Directors at a time at which
there are at least two Independent Directors). Notwithstanding the foregoing,
the Board of Directors of the Company shall not be empowered to effect such
exchange at any time after any Person (other than a Company Entity), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of Rights pursuant to and in compliance with
subsection (a) of this Section
30
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, which excludes Rights that have become void pursuant to the provisions
of Section 11(a)(iii) hereof, shall be to receive that number of shares of
Common Stock, or Common Stock Equivalents, equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
file notice of such Board action with the Rights Agent and 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 such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 11(a)(iii)) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required, pursuant to this
Section 24, to issue shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. 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. For the purposes of this
paragraph (d), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24, and the value of any
Common Stock Equivalent shall be deemed to have the same current market value as
the Common Stock on such date.
Section 25. Notice of Certain Events. In case the Company
shall propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Common Stock or to make any
other distribution described to the holders of its Common Stock (other than a
regular quarterly cash dividend at a rate per share not in excess of the greater
of (x) 200% of the rate of the last quarterly dividend theretofore paid and (y)
$0.10 per quarter (as such amount may be appropriately adjusted to reflect any
stock split, stock dividend, or similar transaction)), or (b) to offer to the
holders of its Common Stock rights, options or warrants to subscribe for or to
purchase any additional Common Stock or securities convertible into Common
Stock, or (c) to effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding Common Stock) or
any other event described in Section 11(a)(i) hereof, or (d) to effect any
merger, consolidation or other combination into or with any Person (other than a
Subsidiary of the Company in a transaction which does not violate Section 11(o)
hereof), or to effect any sale or other transfer (or to permit
31
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which does not violate Section 11(o) hereof), or (e) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 26
hereof, a notice of such proposed action to the extent feasible and file a
certificate with the Rights Agent to that effect, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or Rights,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of Common 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 (a) or (b) above at least twenty (20) days prior to the record date for
determining holders of the Common Stock for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of Common Stock, whichever shall be earlier.
(b) The Company shall, on the Stock Acquisition Date, or as
soon as practicable thereafter, give each holder of a Right, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe the event and the consequences of such event to holders of Rights under
Sections 11(a)(ii), (iii) and (iv) hereof. The failure to give notice required
by this Section 25 or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.
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:
Southwestern Energy Company
0000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any 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 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Corporate Actions Administration
32
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 (or, if prior
to the Distribution Date, to the holder of any certificate for shares of Common
Stock) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. The Company and the
Rights Agent shall, if the Company so directs, from time to time supplement or
amend this Agreement without the approval of any holders of Rights in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein
(provided that any amendment made pursuant to clause (i) or (ii) hereof after a
Stock Acquisition Date or at any time that there is a Proposed Acquiror, shall
not materially adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person, a Proposed Acquiror or any
Affiliate or Associate thereof)), (iii) prior to the Stock Acquisition Date, to
effect any other change or modification which the Company may deem necessary or
desirable (provided that if there is then a Proposed Acquiror, this Agreement
may not be amended pursuant to this Section 27(iii) without the prior
recommendation of a majority of Independent Directors at a time at which there
are at least two Independent Directors), or (iv) after the Stock Acquisition
Date or at any time that there is a Proposed Acquiror, to make any other
provisions in regard to matters or questions arising hereunder which the Company
may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person,
a Proposed Acquiror or any Affiliate or Associate thereof). Notwithstanding
anything contained in this Agreement to the contrary, this Agreement may not be
amended or supplemented (x) to reinstate a right of redemption if the Rights are
not then redeemable or (y) to decrease the Redemption Price. Upon the delivery
of a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment has been approved by the Company's Board of
Directors and is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment; provided, however, that the
Rights Agent may, but shall not be obligated to, enter into any such supplement
or amendment that adversely affects its rights, duties or immunities under this
Agreement. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed to coincide with the interests of holders of shares of
Common Stock (other than an Acquiring Person, an Adverse Person, a Proposed
Acquiror or any Affiliate or Associate thereof).
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 or corporation other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, of the Common Stock of the Company) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, of the Common Stock of the Company).
33
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement or the Rights is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of this Agreement and the Rights shall remain in full force and effect
and shall in no way be affected, impaired or invalidated; provided, however,
that notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to
be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth Business Day following
the date of such determination by the Board of Directors.
Section 31. Determinations and Actions by the Board of
Directors, etc. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors 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 to redeem the Rights pursuant to
Section 23 hereof or to supplement or amend the Agreement and whether any
proposed supplement or amendment adversely affects the interests of the holders
of Right Certificates and comports with the requirements of Section 27 hereof or
to find or to announce publicly that any Person has become an Acquiring Person,
an Adverse Person or Proposed Acquiror). For all purposes of this Agreement, any
calculation of the number of shares of Common Stock or other securities
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock or any other
securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. All such actions, calculations, interpretations and determinations
(including for purpose of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors of the Company in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors or any director to any liability to the holders
of the Rights.
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 Arkansas 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.
34
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the date and the year first above
written.
35
Attest: SOUTHWESTERN ENERGY COMPANY
By: /s/XXXX XXXXXXX By: /s/XXXX X. XXXXXX
--------------------- ---------------------
Xxxx Xxxxxxx Xxxx X. Xxxxxx
Assistant Secretary Senior Vice President and
Chief Financial Officer
Attest: FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By: By: /s/XXXXXX GOROSIOLA
--------------------- ---------------------
Title: Xxxxxx Xxxxxxxxxx
Assistant Vice President
36
EXHIBIT A
(Form of Right Certificate)
Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER APRIL 11, 2009 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO IS, WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON (AS THOSE TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT.]1
Right Certificate
SOUTHWESTERN ENERGY 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
Amended and Restated Rights Agreement dated as of April 12, 1999 (the "Rights
Agreement") between Southwestern Energy Company, an Arkansas corporation (the
"Company"), and The First National Bank of Chicago (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date and prior to
5:00 P.M. (New York City time) on the Expiration Date (as such terms are defined
in the Rights Agreement) at the principal office or such other office of the
Rights Agent designated for such purpose, or of its successors as Rights Agent,
one fully-paid, nonassessable share of Common Stock, $0.10 par value (the
"Common Stock") of the Company, at a purchase price of $40 per share of Common
Stock (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the appropriate Form of Election to Purchase Shares duly
executed. The number of Rights evidenced by this Right Certificate and the
number of shares which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, have been determined as of April 7,
1999.
--------
The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Common Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events, and in
certain circumstances may be exercised to purchase securities of issuers other
than the Company.
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 above mentioned office of the
Rights Agent and are available free of charge upon written request from the
Company at:
Southwestern Energy Company
0000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Common 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 Right Certificate may be redeemed by the Company at a
redemption price of $.01 per Right (payable in cash, shares of Common Stock or
other consideration), appropriately adjusted to reflect any Common Stock split,
Common Stock dividend or similar transaction occurring after the date hereof.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (and the Rights Agreement itself) may be
amended by action of the Company's Board of Directors.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, 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
shares of Common Stock or of any other
A-2
securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this 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.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______________, _____.
Attest: SOUTHWESTERN ENERGY COMPANY
By:________________________ By:________________________
Secretary Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By:________________________
Authorized Signature
A-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Right Certificate)
FOR VALUE RECEIVED _____________________________ hereby sells,
assigns and transfers unto______________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
DATED: ________________, ________
___________________________________
Signature
Signature Guaranteed:
A-4
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:__________________, ________ ________________________________
Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
A-5
FORM OF ELECTION TO PURCHASE SHARES
(To be executed if holder desires to
exercise the Right Certificate)
To Southwestern Energy Company:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Right Certificate to purchase the Common
Stock of the Company (or such other securities of the Company or any other
person) and requests that certificates for such Common Stock be issued in the
name of:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:_______________________, _____
_______________________________
Signature
Signature Guaranteed:
A-6
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:______________________, ______ ________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-7
Exhibit B
SOUTHWESTERN ENERGY COMPANY
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On April 7, 1999, the Board of Directors of Southwestern
Energy Company (the "Company") adopted an Amended and Restated Rights Agreement,
dated as of April 12, 1999 (the "Rights Agreement"), between the Company and
First Chicago Trust Company of New York as Rights Agent, that amends the terms
of the outstanding rights (the "Rights") previously issued. The Rights are
currently evidenced (on the basis of one right for each outstanding share) by
the existing certificates for outstanding shares of common stock, $0.10 par
value, of the Company (the "Common Stock") and are not exerciseable and do not
trade separately from such shares. This Summary describes the Rights as so
amended.
Each Right, when exercisable, will entitle the registered
holder to purchase from the Company one share of the Company's Common Stock at a
price of $40 per share (the "Purchase Price"), subject to adjustment.
Until the close of business on the earliest of: (i) the tenth
day after a public announcement that (A) a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire, beneficial
ownership ("Beneficial Ownership") of 15% or more of the outstanding shares of
Common Stock of the Company (other than pursuant to a tender offer for all
outstanding shares of Common Stock at the price and on terms approved by the
Board of Directors based upon a prior recommendation of the Independent
Directors at a time when there are at least two Independent Directors or solely
as a result of a reduction of the number of shares of Common Stock outstanding
due to a repurchase of shares by the Company), (B) any person or group which
beneficially owned 15% of the outstanding shares on the date of the Rights
Agreement, or which acquired beneficial ownership of 15% of the outstanding
shares as a result of any repurchase of shares by the Company, thereafter
acquired beneficial ownership of additional shares constituting 1% or more of
the outstanding shares of Common Stock or (C) the Board of Directors determines
that a holder of 10% or more of the Common Stock is an Adverse Person (each, an
"Acquiring Person"); and (ii) the tenth Business Day (or such later day as may
be determined by action of the Board of Directors of the Company prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement of, or the first public announcement of the intent of any person
(other than a Company Entity (as defined in the Rights Agreement)) to commence
(which intention to commence remains in effect for five business days after such
announcement) a tender or exchange offer by any Person (other than a Company
Entity) to acquire (when added to any shares as to which such Person is the
Beneficial Owner immediately prior to such commencement) beneficial ownership of
15% or more of the issued and outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Company's Common Stock certificates outstanding as of
the Record Date, by such Common Stock certificate and this Summary.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Stock. New
Common Stock certificates issued after the Record Date upon transfer or new
issuance of the Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date, the surrender for transfer
of any of the Common Stock certificates outstanding as of the date of the Rights
Agreement (whether or not containing a notation contemplated by the original
Rights Agreement dated May 5, 1989) will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate and the
number of Rights associated with each share of Common Stock shall be
proportionately adjusted in the event of any dividend in Common Stock on the
Common Stock or subdivision, combination or reclassification of the Common Stock
(except as otherwise provided in the Rights Agreement). 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
certificates alone will evidence Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on April 11, 2009, unless earlier redeemed by the Company
as described below or unless further extended pursuant to an amendment in the
Rights Agreement as described below.
The Purchase Price payable, and the number of shares of Common
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
Common Stock, (ii) upon the grant to holders of Common Stock of certain rights
or warrants to subscribe for shares of Common Stock or convertible securities at
less than the current market price of the Common Stock or (iii) upon the
distribution to holders of Common Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in Common Stock)
or of subscription rights or warrants (other than those referred to above).
In the event that, at any time after the Rights become
exercisable, the Company is acquired in a merger or other business combination,
proper provision shall be made so that each holder of a Right shall 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
surviving company (or its parent company or other controlling entity) which at
the time of such transaction would have a market value of two times the exercise
price of the Right. In the event that any person becomes an Acquiring Person,
the Rights Agreement provides that proper provision would be made so that each
holder of a Right, other than the Acquiring Person (whose Rights would
thereafter be null and void) and certain of its transferees, would thereafter
have the right to receive upon exercise that number of shares of the Common
Stock having a market value of two times the exercise price of the Right.
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 will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
2
At any time prior to the close of business on the date that
Rights holders become entitled to purchase Common Stock of the Company (or of
the surviving entity after a merger with the Company) with a market value of
twice the Purchase Price (as described above), the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (payable in cash, shares of Common Stock or other consideration),
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "Redemption Price"). In the
event, however, that any person or group (a "Proposed Acquiror") has proposed or
publicly announced an intention to propose a transaction that, if consummated,
would cause an Acquiring Person to become such or cause the Company to be
acquired in a merger or other business combination, the Board of Directors may
only redeem the Rights after receiving a recommendation from a majority of its
Independent Directors. Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (unless otherwise specified in such
Board action), the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Upon the first public announcement (including, without
limitation, the filing of a report pursuant to the Securities Exchange Act of
1934) by the Company or an Acquiring Person containing information indicating
that an Acquiring Person has become such and prior to the acquisition by an
Acquiring Person of 50% or more of the Common Stock then outstanding, the Board
of Directors may, at its option and after receiving the prior recommendation of
its Independent Directors, exchange all or part of the then outstanding and
existing Rights (other than Rights owned by such Acquiring Person which shall
become void) for Common Stock at an Exchange Ratio of one share of Common Stock
per Right (subject to adjustment) (the "Exchange Ratio"). Immediately upon the
action of the Board of Directors of the Company electing to exchange the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive that number of shares of Common Stock or
Common Stock equivalents equal to the number of Rights held by such holder
multiplied by the Exchange Ratio.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
no right to vote or to receive dividends.
At any time prior to the time that an Acquiring Person or a
Potential Acquiror has become such, the Company may amend the Rights Agreement
and the terms of the Rights in any manner deemed necessary or desirable.
Thereafter, the Rights Agreement and the terms of the Rights may be amended by
the Company under certain circumstances, but not in any manner that adversely
affects the interests of the holders of the Rights (other than an Acquiring
Person or a Proposed Acquiror).
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement will be available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
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