EXHIBIT 4.1
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NEW NISOURCE INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Rights Agreement
Dated as of November 1, 2000
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TABLE OF CONTENTS
Page
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SECTION 1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . 2
SECTION 2. APPOINTMENT OF RIGHTS AGENT . . . . . . . . . . . . 5
SECTION 3. ISSUE OF RIGHT CERTIFICATES . . . . . . . . . . . . 5
SECTION 4. FORM OF RIGHT CERTIFICATE . . . . . . . . . . . . . 6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION . . . . . . . . . 7
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 . . . . . . . . . . . . . . . . . . . 11
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK . 11
SECTION 10. PREFERRED STOCK RECORD DATE . . . . . . . . . . . 13
SECTION 11. ADJUSTMENT OF PURCHASE PRICE; NUMBER OF SHARES OR
NUMBER OF RIGHTS . . . . . . . . . . . . . . . . . 13
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER . . . . . . . . . . . . . . 22
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES . . . . . 25
SECTION 15. RIGHTS OF ACTION . . . . . . . . . . . . . . . . . 26
SECTION 16. AGREEMENT OF RIGHT HOLDERS . . . . . . . . . . . . 27
SECTION 17 RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER 28
SECTION 18. CONCERNING THE RIGHTS AGENT . . . . . . . . . . . 28
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT . . . . . . . . . . . . . . . . . . . 29
SECTION 20. TERMS AND CONDITIONS TO DUTIES OF RIGHTS AGENT . . 00
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XXXXXXX 00. CHANGE OF RIGHTS AGENT . . . . . . . . . . . . . . 32
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES . . . . . . . . 33
SECTION 23. REDEMPTION. . . . . . . . . . . . . . . . . . . . 33
SECTION 24. EXCHANGE . . . . . . . . . . . . . . . . . . . . . 34
SECTION 25. NOTICE OF CERTAIN EVENTS . . . . . . . . . . . . . 35
SECTION 26. NOTICES . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 27. SUPPLEMENTS AND AMENDMENTS . . . . . . . . . . . . 37
SECTION 28. SUCCESSORS . . . . . . . . . . . . . . . . . . . . 37
SECTION 29. BENEFITS OF THIS AGREEMENT . . . . . . . . . . . . 38
SECTION 30. GOVERNING LAW . . . . . . . . . . . . . . . . . . 38
SECTION 31. COUNTERPARTS . . . . . . . . . . . . . . . . . . . 38
SECTION 32. DESCRIPTIVE HEADINGS . . . . . . . . . . . . . . . 38
SECTION 33. SEVERABILITY . . . . . . . . . . . . . . . . . . . 38
SECTION 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS. ETC . . . . . . . . . . . . . . . . . . 38
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RIGHTS AGREEMENT
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This Agreement, dated as of November 1, 2000, between New
NiSource Inc., a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited
liability company (the "Rights Agent").
W I T N E S S E T H
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WHEREAS, the Company, NiSource Inc., an Indiana corporation
("NiSource"), Columbia Energy Group, a Delaware corporation
("Columbia"), Parent Acquisition Corp., an Indiana corporation,
Company Acquisition Corp., a Delaware corporation, and NiSource
Finance Corp., an Indiana corporation, have entered into the Agreement
and Plan of Merger dated as of February 27, 2000, as amended and
restated as of March 31, 2000 (the "Merger Agreement"), pursuant to
which, among other things, NiSource and Columbia will become wholly
owned subsidiaries of the Company and the former stockholders of
NiSource and Columbia will become stockholders of the Company (the
"Merger");
WHEREAS, The Company has determined that it would be
desirable for Preferred Share Purchase Rights to be associated with
the shares of Common Stock $.01 par value of the Company (the "Common
Stock") to be issued in the Merger to the former stockholders of
NiSource and Columbia and that certificates representing such Common
Stock would also evidence the associated Rights and that the
registered holders of Common Stock would also be the registered
holders of the associated Rights;
WHEREAS, the Board of Directors of the Company has
authorized the distribution as of the Effective Time (as defined in
the Merger Agreement) of one Preferred Share Purchase Right (as such
number may hereafter be adjusted pursuant to the provisions of this
Agreement) in respect of each share of Common Stock of the Company
issued in connection with the Mergers, and authorized the issuance of
one Preferred Share Purchase Right in respect of each share of Common
Stock of the Company issued between the Effective Time (whether
originally issued or delivered from the Company's treasury) and the
Distribution Date or the Expiration Date (as such terms are
hereinafter defined), each Preferred Share Purchase Right initially
representing the right to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock (as hereinafter defined)
upon the terms and subject to the conditions hereinafter set forth
(individually a "Right" and collectively the "Rights");
WHEREAS, immediately following the Merger described above,
NiSource will merger with and into the Company, and the Company will
thereafter change its name from New Nisource Inc. to NiSource Inc.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, is or becomes the Beneficial
Owner (as such term is hereinafter defined) of a Substantial Block (as
such term is hereinafter defined), but shall not include the Company,
any subsidiary of or other Person controlled by the Company, any
employee benefit plan of the Company or of any subsidiary of the
Company or any Person appointed as trustee by the Company or such
subsidiary pursuant to the terms of any such plan in that Person's
capacity as trustee. Notwithstanding the foregoing, no Person shall
become an Acquiring Person solely as a result of an acquisition of
Common Stock and/or other securities by the Company which, by reducing
the number of outstanding shares of Common Stock and/or other
securities, causes the share of Common Stock and/or other securities
of the Company beneficially owned by such Person to constitute a
Substantial Block; PROVIDED, HOWEVER, that if after such acquisitions
by the Company, such Person becomes the Beneficial Owner of any
additional shares of Common Stock and/or other securities of the
Company and is the Beneficial Owner of a Substantial Block, then such
Person shall be deemed to be an Acquiring Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange
Act"), as in effect on the date of this Agreement, but shall not
include the Company, any subsidiary of or other Person controlled by
the Company, any employee benefit plan of the Company or of any
subsidiary of the Company or any Person appointed as trustee by the
Company or such subsidiary pursuant to the terms of any such plan in
that Person's capacity as trustee.
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) of which such Person or any of such Person's
Affiliates or Associates directly or indirectly has
"beneficial ownership," as determined pursuant to Rule 13d-
3 and Rule 13d-5 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this
Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
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(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing and other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed, pursuant to this clause (ii), to be the Beneficial
Owner of, or to beneficially own, (I) securities tendered
pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (II) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Section
11(a)(ii) Event or a Section 13(a) Event, or (III)
securities issuable upon exercise of Rights from and after
the occurrence of a Section 11(a)(ii) Event or a Section
13(a) Event but only if such Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a)
or Section 22 hereof ("Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made
with respect to any Original Rights; or (B) the right
(whether sole or shared) to vote or dispose of pursuant to
any agreement, arrangement or understanding (whether or not
in writing); PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security under this clause (B) pursuant to an agreement,
arrangement or understanding to vote such security that (1)
arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and
the rules and regulations thereunder and (2) is not also
then required to be reported as beneficially owned on a
Schedule 13D under the Exchange Act (or any comparable or
successor statement or report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing and
other than customary agreements with and between
underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (B) of subparagraph (ii) of
this paragraph (d)) or disposing of any securities of the
Company.
Notwithstanding the foregoing, nothing in this Section 1(d) shall
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cause a Person engaged in business as an underwriter of securities to
be the Beneficial Owner of, or to beneficially own, any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date
of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State
of Illinois or the city in which the office of the Rights Agent is
located are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., New Jersey time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 P.M., Illinois time, on
the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the shares of Common Stock, $.01 par value per share, of
the Company. "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock with the greatest
aggregate voting power (or the equity securities or other equity
interests having power to control or direct the management) of such
Person or, if such Person is a subsidiary of or controlled by another
Person, the Person which ultimately controls such first-mentioned
Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(i) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(j) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(k) "Original Shares" shall have the meaning set forth in
Section 11 (a)(ii) hereof.
(l) "Person" shall mean any individual, firm, corporation,
partnership, trust, syndicate, limited liability company or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
(m) "Preferred Stock" shall mean the shares of Series A
Junior Participating Preferred Stock, $.01 par value per share, of the
Company having the rights and preferences set forth in the Amended and
Restated Certificate of Incorporation of the Company.
(n) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
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(o) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(p) "Section 13 Event" shall mean any event described in
clause (i), (ii) or (iii) of Section 13(a) hereof.
(q) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(r) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
(s) "Substantial Block" shall mean a number of shares of
Common Stock of the Company and/or a number of shares of stock or
amount of other securities of the Company which in the aggregate
represents 25% or more of the Voting Power.
(t) "Voting Power" shall mean the voting power of all
securities of the Company then outstanding generally entitled to vote
for the election of directors of the Company.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company
hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or desirable.
The Rights Agent shall have no duty to supervise, and in no event
shall be liable for, the acts or omissions of any such Co-Rights
Agent.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth business day after
the Stock Acquisition Date, or (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after
the commencement of, or first public announcement of the intent of any
Person (other than the Company or any of its subsidiaries or any
employee benefit plan of the Company or of any subsidiary of the
Company or any Person appointed as trustee by the Company or such
subsidiary pursuant to the terms of any such plan in such Person's
capacity as trustee) to commence, a tender or exchange offer which
would result in such Person becoming an Acquiring Person (the earlier
of such days being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced by the certificates for the Common Stock
of the Company registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also to be
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Right Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Stock. As soon as practicable
after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage prepaid mail, at the expense of the
Company, to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate, in substantially
the form of Exhibit A hereto, evidencing one Right for each share of
Common Stock so held. As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) Rights shall be issued in respect of all shares of
Common Stock which are issued after the Effective Time but prior to
the earlier of the Distribution Date or the Expiration Date or, in
certain circumstances provided in Section 22 hereof, after the
Distribution Date. Certificates representing such shares of Common
Stock shall be deemed to be certificates for Rights and shall have
impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between New NiSource Inc. and ChaseMellon Shareholder
Services, L.L.C. (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of
NiSource Inc. 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. NiSource Inc. will mail to the holder of
this certificate a copy of the Rights Agreement without
charge promptly upon receipt of a written request therefor.
Under certain circumstances, Rights beneficially owned by
any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether then held by or on behalf of
such Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing legend,
until the earlier of the Distribution Date or the Expiration Date, the
Rights associated with the shares of Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the shares of
Common Stock represented by such certificate.
SECTION 4. FORM OF RIGHT CERTIFICATE.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse
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thereof) shall be substantially the same as Exhibit A hereto and may
have printed thereon such marks of identification or designation and
such legends, summaries or endorsements (which shall not affect the
duties and responsibilities of the Rights Agent) as the Company may
deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates, whenever
issued, shall be dated as of the Effective Time, and on their face
shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as shall be set forth
therein at the Purchase Price (as defined in Section 7(b)), but the
number of such one one-hundredths of a share and the Purchase Price
shall be subject to adjustments as provided herein.
(b) Any Right Certificate that represents Rights
beneficially owned by an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, or any transferee of an Acquiring
Person or any Associate or Affiliate of an Acquiring Person under the
circumstances set forth in Section 7(e), and any Right Certificate
issued 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 Certificate are or were
beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in Section 7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of
the Company by the Chairman, the President or any Vice President of
the Company, 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 countersigned by the Rights Agent manually or by facsimile
and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the 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, issued and delivered with the same force and
effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person who, at the
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actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date and receipt by the
Rights Agent of all necessary information, the Rights Agent will keep
or cause to be kept, at its shareholder services offices in Ridgefield
Park, New Jersey, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES, MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Section 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Right
Certificate or Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or, following the
occurrence of an event set forth in Section 11(a)(ii) or Section
13(a), shares of Common Stock and/or other securities) 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 of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates. The Rights Agent shall have no duty or obligation
under this Section unless and until it is satisfied that all such
taxes and/or charges have been paid or provided for.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruc-
tion or mutilation of a Right Certificate, and, in case of loss, theft
or destruction, of indemnity or security satisfactory to them (if
requested by the Company), 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 delivery to
the registered owner in lieu of the Right Certificate so lost, stolen,
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destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date,
upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly and properly executed, to
the Rights Agent at the office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a share of
Preferred Stock as to which the Rights are exercised, at or prior to
the Close of Business on the earliest of (i) March 10, 2010 (the
"Final Expiration Date"), (ii) the date on which the Rights are
redeemed pursuant to Section 23, (iii) consummation of a transaction
pursuant to Section 13(g) (such earliest date being herein referred to
as the "Expiration Date") or (iv) the time at which such Rights are
exchanged pursuant to Section 24.
(b) The purchase price for each one one-hundredth of a
share of Preferred Stock (the "Purchase Price") pursuant to the
exercise of a Right shall initially be $60, shall be subject to
adjustment from time to time as provided in Section 11 and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt by the Rights Agent of a Right Certificate
representing exercisable Rights, with the form of election to purchase
duly and properly executed, accompanied by payment of the Purchase
Price for the shares to be purchased, and an amount equal to any
applicable tax or charge in cash, or by certified check or bank draft
payable to the order of the Company, the Rights specified in the
election shall be exercised, and the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the number of whole shares of Preferred Stock to be
purchased (and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests) or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent for the Preferred Stock
depositary receipts representing such number of one one-hundredths of
a share of Preferred Stock as are to be purchased (and the Company
hereby irrevocably authorizes its depositary agent to comply with all
such requests), in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent
with the depositary agent, (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, (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
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and (iv) when appropriate, after receipt promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate.
The payment of the Purchase Price may be made (x) in cash or by
certified bank check or bank draft payable to the order of the
Company, or (y) at the Company's option, by delivery of a certificate
or certificates (with appropriate share powers executed in blank
attached thereto) evidencing a number of shares of Common Stock equal
to the then Purchase Price divided by the closing price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock on the
Trading Day immediately preceding the date of such exercise. In the
event that the Company is obligated to issue other securities
(including shares of Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any 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 Section 14.
(e) Notwithstanding the foregoing, upon the occurrence of a
Section 11(a)(ii) Event or a Section 13(a) Event, any Rights that are
or were on or after the Distribution Date beneficially owned by (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or such Associate
or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person (or such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or such Associate or Affiliate) has any agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which is part of a plan,
arrangement or understanding (whether or not in writing) which has as
a primary purpose or effect avoidance of this Section 7(e), shall
become null and void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of this
Agreement. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) are complied with, but shall
have no liability to any holder of a Right Certificate or to any other
Person as a result of its failure to make any determinations with
respect to any Acquiring Person or any of their respective Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, the Rights shall not be effectively exercised and neither
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the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7, unless such
registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof
as the Company or the Rights Agent 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 canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates 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 canceled
Right Certificates to the Company, or shall at the written request of
the Company, destroy such canceled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the
Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED
STOCK.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available, and not reserved for other purposes,
out of its authorized and unissued shares of Preferred Stock or its
authorized and issued shares of Preferred Stock held in its treasury
(and, following the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and
issued shares of Common Stock and/or other securities held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event,
shares of Common Stock and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) If and so long as the Preferred Stock (or depositary
receipts therefor) (and, following the occurrence of a Section
11(a)(ii) Event or a Section 13(a) Event, shares of Common Stock
and/or other securities) issuable upon the exercise of Rights may be
listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after the Distribution Date, all
shares reserved for such issuance (or depositary receipts therefor) to
be listed on such exchange upon official notice of issuance upon such
exercise.
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(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all shares of Preferred
Stock (and, following the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, shares of 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.
(d) The Company further covenants and agrees that it will
pay when due and payable any and all taxes and charges which may be
payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock (and, following the
occurrence of a Section 11 (a)(ii) Event or a Section 13(a) Event,
shares of Common Stock and/or other securities) upon the exercise of
Rights. The Company shall not, however, be required to pay any tax or
charge 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 Preferred Stock 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 shares of Preferred Stock upon
the exercise of any Rights until any such tax or charge shall have
been paid (any such tax or charge being payable by the holder of such
Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax or charge
is due.
(e) The Company shall use its best efforts (i) to file, as
soon as practicable following the first occurrence of a Section
11(a)(ii) Event for which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance
with Section 11(a)(ii) or (iii), or as soon as is required by law
following the Distribution Date, as the case may be, a registration
statement under the Securities Act of 1933 (the "Act"), with respect
to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) to cause such registration statement to become
effective as soon as practicable after such filing, and (iii) to cause
such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration Date. The Company shall use its
best efforts to take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of the first
sentence of this paragraph, the exercisability of the Rights in order
to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such
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time as the suspension is no longer in effect in either case, with
prompt notice thereof to the Rights Agent. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in
whose name any certificate for shares of Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Stock represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable taxes or charges) was made in
accordance with Section 7; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed
to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which
the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a 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 of shares
covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare or pay a dividend on the
Preferred Stock payable in Preferred Stock, (B) effect a subdivision,
combination or consolidation of the Preferred Stock (by
reclassification or otherwise than by payment of dividends in
Preferred Stock) into a greater or lesser number of shares of
Preferred Stock or (C) effect a reclassification or recapitalization
of the Preferred Stock into another class of capital shares (including
any such reclassification or recapitalization in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination, reclassification or recapitalization, and the number and
kind of capital shares issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time
shall be entitled to receive the aggregate number and kind of capital
shares, other securities and/or property which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, such holder
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would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, reclassification or
recapitalization. If an event occurs which would require an
adjustment under both 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).
(ii) In the event any Person shall, at any time after
the date of this Agreement, become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13 hereof, or is an acquisition of
Common Stock pursuant to a tender offer or exchange offer by such
Person that (1) is for all outstanding shares of Common Stock and (2)
is at a price and on terms determined by the Board of Directors, after
receiving advice from one or more investment banking firms, to be (I)
at a price which is fair to stockholders (taking into account all
factors which the Board deems relevant including, without limitation,
prices which could reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to realize maximum value) and
(II) otherwise in the best interests of the Company and its
stockholders, then proper provision shall be made so that each holder
of a Right, except as provided below, shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a
share of Preferred Stock for which a Right is then exercisable, 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 one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the current market
price per share of Common Stock of the Company (determined pursuant to
Section 11(d)) on the date of such occurrence (such number of shares
issuable upon exercise of all outstanding Rights being herein referred
to as the "Adjustment Shares"); PROVIDED, HOWEVER, that if the
transaction that would otherwise give rise to the foregoing adjustment
is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be
made pursuant to this Section 11(a)(ii); PROVIDED FURTHER that, if the
Common Stock of the Company shall have been reclassified or
recapitalized in a transaction described in Section 11(a)(i) or
converted or otherwise changed in any manner from the capital stock of
the Company that was shares of Common Stock of the Company on the date
of this Agreement (such Common Stock prior to any such
reclassification, recapitalization, conversion or other change being
referred to as the "Original Shares"), then each holder of a Right
thereafter shall have a right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, at the election of the holder, either the number of shares
of Common Stock of the Company determined pursuant to clauses (x) and
(y) above or such number of shares of capital stock, other securities
and/or property into which the Original Shares were reclassified,
-14-
recapitalized, converted or changed, adjusted to reflect changes in
the market price of such capital stock or other securities and in the
fair market value of such property since the date of such
reclassification, recapitalization, conversion or other change, as
determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company, so that the holder of any
Right exercised thereafter shall be entitled to receive the aggregate
number and kind of capital stock, other securities and/or property
(adjusted for changes in market price and fair market value) which, if
such Section 11(a)(ii) Event (and the related adjustment of the number
of Common Stock to be received upon exercise of a Right) had occurred
prior to the date of such reclassification, recapitalization,
conversion or other change and such Right as so adjusted 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
reclassification, recapitalization, conversion or change.
(iii) In the event that there shall not be sufficient
authorized but unissued shares of Common Stock and authorized and
issued shares of Common Stock held in the treasury and not reserved
for other purposes to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company shall
take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exercise of the Rights;
PROVIDED, HOWEVER, that if the Company is unable to, or for any reason
does not promptly, cause the authorization of a sufficient number of
additional shares of Common Stock, then, in the event the Rights
become exercisable as provided in Section 7(a), the Company, with
respect to each Right and to the extent necessary under and permitted
by applicable law and any agreements or instruments in effect on the
Stock Acquisition Date to which it is a party, shall make adequate
provision to substitute for that number of the Adjustment Shares as to
which additional shares of Common Stock have not been authorized for
issuance: (A) an amount in cash equal to the excess of (1) the product
of (x) the number of Adjustment Shares, multiplied by (y) the current
market price (determined pursuant to Section 11(d)) per share of
Common Stock on the date on which the Section 11(a)(ii) Event occurs
(such product being hereinafter referred to as the Current Value),
over (2) the Purchase Price, in lieu of issuing shares of Common Stock
and requiring payment therefor, (B) debt or equity securities (other
than shares of Common Stock) having a value equal to the Current
Value, where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by the Board of
Directors of the Company, and requiring the payment of the Purchase
Price, (C) a number of shares of Preferred Stock equal to the number
of Adjustment Shares where a nationally recognized investment banking
firm selected by the Board of Directors of the Company shall have
determined such shares to have the same value as the shares of Common
Stock (a common stock equivalent), and requiring the payment of the
Purchase Price, or (D) any combination of cash, property, common stock
equivalents and/or other securities having the requisite value
-15-
pursuant to Section 11 as determined by a nationally recognized
investment banking firm selected by the Board of Directors of the
Company and requiring the payment of all or any requisite portion of
the Purchase Price; PROVIDED FURTHER, HOWEVER, that if the Company
shall not have made adequate provision to deliver value pursuant to
clauses (A), (B), (C) or (D) of the first proviso to the first
sentence of this Section 11(a)(iii) within 60 days following the date
of the occurrence of the Section 11(a)(ii) Event, then the Company
shall be obligated to deliver cash in accordance with clause (A)
above. To the extent that the Company determines that some action need
be taken pursuant to clauses (A), (B), (C) or (D) of the first proviso
to the first sentence of this Section 11(a)(iii), the Company may
suspend the exercisability of the Rights for a period of up to 60 days
following the date of the occurrence of the Section 11(a)(ii) Event,
in order to decide the appropriate form of distribution to be made
pursuant to such first proviso 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 with prompt notice thereof to the Rights Agent.
(b) In case a record date is fixed by the Company or
otherwise established for the issuance of rights, options or warrants
to all holders of Preferred Stock entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe
for or purchase shares of Preferred Stock or shares having the same
rights, privileges and preferences as the Preferred Stock (preferred
stock equivalents) (or securities convertible into shares of Preferred
Stock or preferred stock equivalents) at a price per share of
Preferred Stock or preferred stock equivalent (or having a conversion
price per share, if a security convertible into Preferred Stock or
preferred stock equivalents) less than the current market price (as
defined in Section 11(d)) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, of which the numerator shall
be the number of shares of Preferred Stock outstanding on such record
date plus the number of shares of Preferred Stock and/or preferred
stock equivalents which the aggregate offering price of the total
number of shares of Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price and of which
the denominator shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares
of Preferred Stock and/or preferred stock equivalents 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 and which shall be conclusive for all purposes.
Preferred Stock owned by or held for the account of the Company shall
-16-
not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date
is fixed or established; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date
had not been fixed or established.
(c) In case a record date is fixed by the Company or
otherwise established for the making of a distribution to all holders
of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets
(other than (i) a regular periodic cash dividend out of earnings or
retained earnings, (ii) a special cash dividend out of earnings or
retained earnings, or (iii) a dividend payable in Preferred Stock) or
subscription rights, options or warrants (excluding those referred to
in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, of which
the numerator shall be the current market price (as defined in Section
11(d)) per share of Preferred Stock 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 and which shall be conclusive for all
purposes) of the portion of the assets or evidences of indebtedness so
to be distributed or of such subscription rights, options or warrants
applicable to one share of Preferred Stock and of which the
denominator shall be such current market price per share of Preferred
Stock. Such adjustment shall be made successively whenever such a
record date is fixed or established; 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 or established.
(d) (i) For the purpose of any computation hereunder, the
current market price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of
Common Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to but not including such date;
PROVIDED, HOWEVER, that in the event that the current market price per
share of Common Stock is determined during a period following the
announcement by the issuer of the Common Stock of (A) a dividend or
distribution on the Common Stock payable in Common Stock or securities
convertible into Common Stock or (B) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of
30 consecutive Trading Days after but not including the ex-dividend
date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, as the case may be,
then, and in each such case, the current market price shall be
appropriately adjusted to reflect the current market price per common
stock equivalent. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such
-17-
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the- counter market, as reported
by the National Association of Securities Dealers, Inc. Automated
Quotation System (NASDAQ) or such other system then in use, or, if on
any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company, except that,
if on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in
good faith by the Board of Directors of the Company shall be used. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the shares of Common
Stock are not publicly held or not so listed or traded, "current
market price" per share of Common Stock shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
current market price per share of Preferred Stock on any date shall be
determined in the same manner as set forth for the Common Stock in
Section 11(d)(i). If the current per share market price of the
Preferred Stock cannot be determined in such manner, the current per
share market price of the Preferred Stock shall be conclusively deemed
to be the current per share market price of the Common Stock
(appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof), multiplied by
100. If either the shares of Common Stock or the shares of Preferred
Stock are not publicly held or listed or traded as contemplated by
Section 11(d)(i), current market price per share of Common Stock or
Preferred Stock shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(e) 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
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by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any capital shares of the Company other
than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in
this Section 11 and the provisions of Sections 7, 9, 10 and 13 with
respect to the shares of Preferred Stock shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a share of Preferred Stock purchasable from time
to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (A) the number of shares
covered by a Right immediately prior to this adjustment by (B) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of
a share of Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
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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, with prompt notice
thereof to the Rights Agent. Such 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, the record date shall be at least
10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company 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, 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 one one-hundredths of a share of
Preferred Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of one one-hundredths of a share
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 one one-hundredth of the then par
value per share, if any, of the shares of Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer, with
prompt notice thereof to the Rights Agent, until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over
and above the shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment;
PROVIDED HOWEVER, that the Company shall deliver to such holder a due
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xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Stock, issuance wholly
for cash of any shares of Preferred Stock at less than the current
market price, issuance wholly for cash of shares of Preferred Stock or
securities which by their terms are convertible into or exchangeable
for shares of Preferred Stock, share dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall
not be taxable to such stockholders.
(n) Notwithstanding any other provision of this Agreement,
no adjustment to the Purchase Price, the number of one one-hundredths
of a share of Preferred Stock for which a Right is exercisable or the
number of Rights outstanding (except as permitted by Section 23
hereof) or any similar adjustment shall be made or be effective if
such adjustment would have the effect of reducing or limiting the
benefits the holders of the Rights would have had absent such
adjustment, including, without limitation, the benefits under Section
11(a)(ii) and Section 13, unless the terms of this Agreement are
amended so as to preserve such benefits.
(o) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Stock payable in Common
Stock or (ii) effect a subdivision, combination or consolidation of
the Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock) into a greater or lesser number of shares
of Common Stock, then in any such case (i) the number of one
one-hundredths of a share of Preferred Stock purchasable after such
event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a share of Preferred
Stock so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which
is the number of shares of Common Stock outstanding immediately after
such event, and (ii) each share of Common Stock outstanding
immediately after such event shall have issued with respect to it that
number of Rights which each share of Common Stock outstanding
immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(o) shall be made
successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
(p) The Company covenants and agrees that, following the
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Distribution Date, except as permitted by Section 23 or Section 27
hereof, it will not, directly or indirectly, take any action the
purpose or effect of which is to eliminate or otherwise diminish the
benefits intended to be afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in
Section 11 or 13, the Company shall (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts and
computations accounting for such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Common Stock or
the Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance
with Section 26. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment contained therein and
shall have no duty with respect to and shall not be obligated or
responsible for calculating any adjustment nor shall it be deemed to
have knowledge of such adjustment unless and until it shall have
received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, on or after the Stock Acquisition
Date, directly or indirectly, (i) the Company shall consolidate with,
or merge with and into, any other Person, and the Company shall not be
the continuing or surviving corporation, (ii) any Person shall
consolidate with the Company, or merge with and into the Company, and
the Company shall be the continuing or surviving corporation and, in
connection therewith, all or part of the Common Stock of the Company
shall be changed into or exchanged for shares or other securities of
any other Person or cash or any other property, or (iii) the Company
shall sell or otherwise transfer (or one or more of its subsidiaries
shall sell or otherwise transfer), in one or more 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, then, and in each such case, proper provision
shall be made so that (A) each holder of a Right shall thereafter have
the right to receive, upon the exercise thereof at a price equal to
the then-current Purchase Price multiplied by the number of one one-
hundredths of a share of Preferred Stock for which a Right is then
exercisable, in accordance with the terms of this Agreement, 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), free and clear of any liens, encumbrances and
adverse claims and not subject to any rights of call, purchase or
first refusal, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-
hundredths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the current market
price (determined pursuant to Section 11(d)) per share of Common Stock
of the Principal Party on the date of consummation of such
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consolidation, merger, sale or transfer; (B) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first
occurrence of an event set forth in Section 13(a) hereof; and (D) such
Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its shares of Common Stock
in accordance with Section 9) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock or cash, property or other securities
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean (i) in the case of any
transaction described in (i) or (ii) of the first sentence of Section
13(a), the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is
the other party to such merger or consolidation; and (ii) in the case
of any transaction described in (iii) of the first sentence in Section
13(a), the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such transaction
or transactions; PROVIDED, HOWEVER, that in any such case, (1) if the
shares of Common Stock of such Person are not at such time and have
not been continuously over the preceding twelve month period
registered under Section 12 of the Exchange Act ("Registered Common
Stock") or such Person is not a corporation, and such Person is
directly or indirectly controlled by another Person which has
Registered Common Stock outstanding, "Principal Party" shall refer to
such other Person; (2) if the shares of Common Stock of such Person
are not Registered Common Stock or such Person is not a corporation,
and such Person is directly or indirectly controlled by another Person
which does not have Registered Common Stock outstanding, "Principal
Party" shall refer to the controlling Person of such first-mentioned
Person; (3) if the shares of Common Stock of such Person are not
Registered Common Stock or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person,
and one or more of such controlling Persons have Registered Common
Stock outstanding, "Principal Party" shall refer to whichever of such
controlling Persons is the issuer of the Registered Common Stock
having the greatest aggregate market value; and (4) if the shares of
Common Stock of such Person are not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such controlling
Persons have Registered Common Stock outstanding, "Principal Party"
shall refer to whichever controlling Person is the corporation having
the greatest stockholders equity or, if no such controlling Person is
a corporation, shall refer to whichever controlling Person has the
greatest net assets.
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(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such Principal Party shall have executed and delivered to
the Rights Agent a legally valid, binding and enforceable supplemental
agreement in compliance with the provisions set forth in Section 13(a)
and (b), and if applicable Section 13(d), and further providing that,
as soon as practicable after the date of any consolidation, merger or
sale of assets mentioned in this Section 13, such issuer will (i)
prepare and file a registration statement under the Act, with respect
to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and (ii) will deliver to holders of the Rights
historical financial statements for such issuer and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) Notwithstanding anything in Section 13(b) and (c) to
the contrary, if the Principal Party as determined pursuant to
paragraph (b) above is not a corporation or does not have shares of
Common Stock, proper provision shall be made so that such Principal
Party shall create or otherwise make available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement,
cash or a type or types of securities having a fair market value (as
determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company) equal to at least the value
of the shares of Common Stock which each holder of a Right would have
been entitled to receive if such Principal Party had been a
corporation or had shares of Common Stock.
(e) The Company covenants and agrees that, following the
Distribution Date, it shall not consummate any of the transactions
described in clauses (i), (ii) and (iii) of the first sentence of
Section 13(a) if at the time of or after such consummation there would
be any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or any
other action taken which would diminish or eliminate the benefits
intended to be afforded by the Rights, unless prior thereto the
Principal Party shall have amended or repealed such charter or by-law
provisions, instruments or securities, agreements or actions or
otherwise protected the holders of the Rights from such diminution or
elimination of benefits, and the Company and the Principal Party shall
have executed and delivered to the Rights Agent a legally valid,
binding and enforceable supplemental agreement providing for such
amendment, repeal or other protection.
(f) The provisions of this Section 13 shall similarly apply
to successive mergers, consolidations, sales or other transfers. In
the event that any transaction set forth in Section 13 occurs at any
time after the occurrence of a Section 11(a)(ii) Event, the Rights
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which have not theretofore been exercised shall thereafter become
exercisable in the manner described in this Section 13.
(g) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraph (i) and (ii) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a tender offer or exchange offer
for all the outstanding shares of Common Stock of the type excepted
from the provisions of Section 11(a)(ii) hereof by the terms of that
Section (or a wholly owned subsidiary of any such Person or Persons),
(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
tender offer or exchange offer, and (iii) the form of consideration
being offered to the remaining holders of Common Stock pursuant to
such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon consummation of
any such transaction contemplated by this Section 13(g), all Rights
hereunder shall expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right. For
the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company, except
that, if on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as determined in
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good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock,
other than fractions of Preferred Stock that are integral multiples of
one one-hundredth of a share of Preferred Stock and certificates
evidencing such fractional shares. Fractions of shares of Preferred
Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary agent selected by it, provided that such
agreement shall provide that the holders of such depositary receipts
shall have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Preferred Stock represented
by such depositary receipts. In lieu of fractional shares of Preferred
Stock (other than fractional Preferred Stock that are integral
multiples of one one-hundredth of a share), the Company may pay to the
registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of a share of
Preferred Stock. For purposes of this Section 14(b), the current
market value of a share of Preferred Stock shall be the closing price
of a share of Preferred Stock (as determined pursuant to Section
11(d)(ii)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Section 11(a)(ii) Event
or a Section 13(a) Event, the Company or the Principal Party, as the
case may be, shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the
Company or the Principal Party, as the case may be, may pay to the
registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of a share of Common
Stock. For purposes of this Section 14(c), the current market value of
a share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to Section 11(d)(i)) for the
Trading Day immediately prior to the date of such exercise.
(d) Each holder of a Right or Rights by the acceptance of
the Rights expressly waives his right to receive any fractional Rights
or any fractional shares upon exercise of a Right or Rights except as
provided in Section 14(b) and (c).
SECTION 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement, excepting the rights of action given to the
Rights Agent under this Agreement, 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
-26-
Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to 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 Close of Business on the Distribution
Date, the Rights will be transferable only in connection with the
transfer of Common Stock;
(b) after the Close of Business on the Distribution Date,
the Rights will be transferable only by transfer of the Right
Certificates, which are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name each 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 Certificate 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 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 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 the
obligation.
SECTION 17 RIGHT CERTIFICATE HOLDER NOT DEEMED A
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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 Preferred Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided
in Section 25), or to receive dividends 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.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
preparation, execution, delivery, administration and amendment of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense,
incurred without gross negligence, bad faith or willful misconduct as
finally determined by a court of competent jurisdiction on the part
of the Rights Agent, for any action taken, suffered or omitted by the
Rights Agent in connection with the acceptance and administration of
this Agreement, including without limitation the costs and expenses of
defending against any claim of liability arising therefrom, directly
or indirectly. The costs and expenses of enforcing this right of
indemnification shall also be paid by the Company. The
indemnification provided for hereunder shall survive the expiration of
the Rights and termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and shall
be authorized and protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred 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 or otherwise upon the
advice or opinion of counsel as set forth in Section 20 hereof.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
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punitive, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of the action.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or
any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
Person succeeding to the shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto;
PROVIDED, HOWEVER, that such Person would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. 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 Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this
Agreement.
SECTION 20. TERMS AND CONDITIONS TO DUTIES OF RIGHTS
AGENT. The Rights Agent undertakes only the duties and obligations
expressly imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into
this agreement against the Rights Agent, by all of which the Company
and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) Before the Rights Agent acts, or refrains from acting,
the Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice and opinion of such counsel
-29-
shall be full authorization and protection to the Rights Agent for any
action taken, suffered or omitted by it in good faith and in
accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including without limitation the identity of any
Acquiring Person and the determination of current per share market
price) be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a certificate signed by the Chairman, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization and
protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in good faith under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct as finally
determined by a court of competent jurisdiction.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its 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 liability or
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
liable or 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 liable or responsible for any adjustment required under
the provisions of Sections 11 or 13 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 any shares of Preferred Stock to be
issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Preferred Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
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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 determinations,interpretations and instructions with respect to
the performance of its duties hereunder from the Chairman, the
President or any Vice President or the Secretary or any Assistant
Secretary or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
determinations, interpretations and instructions of any such officer
or for any delay in acting while waiting for these instructions. Any
application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken, suffered or omitted by the Rights
Agent under this Agreement and the date on or after which such action
shall be taken, suffered or such omission shall be effective. The
Rights Agent shall not be liable for any action taken or suffered by,
or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in
such application (which date shall not be less than ten Business Days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall
have received written instructions in response to such application
specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, director,
officer, affiliate or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
negligence or misconduct of any such attorney or agent or for any loss
to the Company resulting from any such act, default, negligence or
misconduct, absent gross negligence, bad faith or willful misconduct,
as finally determined by a court of competent jurisdiction, in the
selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered
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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 not been completed to certify if the holder is an
Acquiring Person or an Affiliate or Associate thereof, the Rights
Agent, subject to the provisions of Section 11(a)(ii), shall not take
any further action with respect to such requested exercise or transfer
without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(l) The Rights Agent shall not be required to take notice
or be deemed to have any notice of any fact, event or determination
(including, without limitation, any dates or events defined in this
Agreement or the designation of any Person as an Acquiring Person,
Affiliate or Associate) under this Agreement unless and until the
Rights Agent shall be specifically notified in writing by the Company
of such fact, event or determination.
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, at the expense of the Company, to
the holders of the Right Certificates by first-class mail (at the
expense of the Company). 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 or shall repeatedly fail or
refuse to act, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity or repeated
failure or refusal to act by the Rights Agent or by the holder of a
Right Certificate (who shall, without notice, submit his Right
Certificate for inspection by the Company), then the registered holder
of any Right Certificate or the Rights Agent may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a Person organized and doing business under the
laws of the United States or of any state of the United States so long
as such Person is authorized to do business and is in good standing,
is authorized under such laws to exercise the powers of Rights Agent
hereunder and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights
-32-
Agent a combined capital and surplus of at least $100,000,000 or (b)
an Affiliate of any Person described in the foregoing clause (a).
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, and the
predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock, and 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.
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 per share and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date
pursuant to the exercise, conversion or exchange of share options,
warrants, rights or convertible securities of the Company that are
outstanding prior to the Distribution Date, the Company shall issue
Rights with respect to all such shares of Common Stock so issued or
sold (and shall issue Right Certificates representing such Rights);
PROVIDED, HOWEVER, that (i) no such Right Certificates shall be issued
if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right
Certificates 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 Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the Close of Business
on the tenth Business Day after the Stock Acquisition Date (which date
may be extended pursuant to Section 27 hereof) or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
-33-
Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the Rights will terminate and
the only rights thereafter of a holder of such Rights shall be to
receive the Redemption Price. Within ten business days after the
action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at 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. Such
notice of redemption shall state the method by which the payment of
the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set
forth in this Section 23, and other than in connection with the
repurchase of Common Stock prior to the Distribution Date.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time after the occurrence of a Section 11(a)(ii) Event
or a Section 13(a) Event, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any share
split, share dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio").
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of the holders of such Rights shall be
to receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange
with prompt notice thereof to the Rights Agent; PROVIDED, HOWEVER,
that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail
a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein
-34-
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 null and
void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute shares of Preferred Stock (or
preferred stock equivalents, as such term is defined in Section 11(b)
hereof) for shares of Common Stock exchangeable for Rights, at the
initial rate of one one-hundredth of a share of Preferred Stock (or
preferred stock equivalent) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Stock so that the fraction of a share of Preferred Stock
delivered in lieu of each share of Common Stock shall have the same
voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares
of Common Stock or Preferred 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
shares of Common Stock or Preferred Stock for issuance upon exchange
of the Rights.
(e) The Company shall not be required to issue fractional
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares,
the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole share of Common Stock. For the
purposes of this subsection (e), the current market value of a whole
shares of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS. In case the
Company shall propose (a) to pay any dividend payable in shares of any
class to the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than a
regular periodic cash dividend out of earnings or retained earnings or
other than a special cash dividend out of earnings or retained
earnings), or (b) to offer to the holders of its Preferred Stock
rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of any class or any other
securities, rights or options, or (c) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only
-35-
the subdivision of outstanding shares of Preferred Stock), or (d) to
effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of
more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to, any other Person or Persons, 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 and the Rights Agent, in accordance with Section 26,
a notice of such proposed action, which shall specify the record date
for the purposes of such shares dividend, distribution of 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 Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least
twenty days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of any
such other action, at least twenty days prior to the date of the
taking of such proposed action at the date of participation therein by
the holders of Preferred Stock, whichever shall be the earlier.
In case of the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, then the Company or the Principal Party, as the
case may be, shall as soon as practicable thereafter give to each
holder of a Right and the Rights Agent, in accordance with Section 26,
a notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights under
Section 11(a)(ii) or Section 13(a) hereof, as the case may be.
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:
NiSource Inc.
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Chairman
with a copy to the Secretary at the same address. 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:
ChaseMellon Shareholder Services, L.L.C.
000 Xxxxx Xxxxxx Xxxxx
-00-
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing Common Stock
and Rights. From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); PROVIDED, HOWEVER,
that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, a time period relating to
when the Rights may be redeemed at any time when the Rights are not
redeemable. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, and does
not change or increase the Rights Agent's duties, liabilities or
obligations hereunder, the Rights Agent shall execute such supplement
or amendment. Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made which changes
the Redemption Price or the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
SECTION 28. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the shares of
Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
-37-
benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the
shares of Common Stock).
SECTION 30. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such
state; provided, however, that all provisions regarding the rights,
duties and obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such
state.
SECTION 31. COUNTERPARTS. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
SECTION 32. 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.
SECTION 33. SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement shall be held by a court of
competent jurisdiction or other authority to be invalid, void, illegal
or unenforceable, the validity or enforceability of the remainder of
the terms, provisions, covenants and restrictions shall not be
affected thereby, 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,
illegal 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, if theretofore expired, or extended so
as not to expire until the Close of Business on the fifteenth Business
Day following the date of such determination by the Board of
Directors.
SECTION 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS. ETC. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to
-38-
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
determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause
(y) below, all omissions with respect to the foregoing) which are done
or made by the Board, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board to any liability to the holders
of the Rights.
-39-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to
be hereunto affixed and attested, all as of the day and year first
above written.
Attest: NEW NISOURCE INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxx
------------------------------ ------------------------
Xxxx X. Xxxxxx Xxxx X. Xxxxx
Secretary Chief Executive officer
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.,
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------ ------------------------
Xxxxx X. Xxxxx Xxxxxxx X. Xxxxxx
Vice President Vice President
-40-
EXHIBIT A
---------
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER MARCH 12, 2010 OR EARLIER IF CONSUMMATION
OF A TRANSACTION PURSUANT TO SECTION 13(g) OF THE RIGHTS
AGREEMENT OCCURS OR IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON. THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]<*>
Right Certificate
NISOURCE INC.
This certifies that _______________, or registered assigns,
is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of November 1, 2000
(the "Rights Agreement") between NiSource Inc., a Delaware corporation
(the "Company"), and ChaseMellon Shareholder Services, L.L.C., , a New
Jersey limited liability company (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) when the rights are exercisable
pursuant to the Rights Agreement and prior to 5:00 P.M. (Illinois
time) on March 12, 2010 at the principal office of the Rights Agent,
or its successors as Rights Agent, one one-hundredth of a fully paid
non-assessable share of the Series A Junior Participating Preferred
Stock, without par value ("Preferred Stock"), of the Company, at a
purchase price of $60 per one one-hundredth of a share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-
hundredths of a share which may be purchased upon exercise thereof)
set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of ________ __, 2000, based on the
Preferred Stock of the Company as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a share of Preferred Stock or
<*>The portion of the legend in brackets shall be inserted only
if applicable.
A-1
other securities or property 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.
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.
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 one one-hundredths of a share of Preferred
Stock or other securities or property as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at
its option at a redemption price of $.01 per Right.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions that are integral multiples of one one-hundredth of a share
of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of a
share of Preferred Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or,
to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends
or subscription rights, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Rights
Agreement.
A-2
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 __________ 20__.
ATTEST: NISOURCE INC.
_____________________________ By_________________________________
Secretary Title:
Countersigned:
_____________________________
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: _______________, 20__
___________________________________
Signature
Signature Guaranteed:
NOTICE
------
The signature to 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-4
FORM OF ELECTION TO PURCHASE
-----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To NiSource Inc.:
The undersigned hereby irrevocably elects to exercise
__________________________ Rights represented by this Right
Certificate to purchase the shares of Preferred Stock or other
securities or property issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
______________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________
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 of transferee)
______________________________________________________________________
Dated: _______________, 20__
___________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
A-5
