EXHIBIT 4
AVISTA CORPORATION
and
THE BANK OF NEW YORK
Rights Agent
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RIGHTS AGREEMENT
Dated as of __________ , ____
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of __________, ____, by and between AVISTA
CORPORATION, a Washington corporation (the "Company"), and THE BANK OF NEW YORK,
a New York banking corporation (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution of one right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding at the close of
business on February 15, 2000 (the "Record Date"), each Right representing the
right to purchase one one-hundredth of a share of Preferred Stock (as such term
is hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right (as
such number may hereinafter be adjusted pursuant to the provisions of Section
11(i) hereof) with respect to each share of Common Stock that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
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 and
Associates (as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 10% or more of the
Shares of Common Stock of the Company then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter defined) of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, any entity holding shares of Common Stock for or pursuant to the terms
of any such plan, or any trustee, administrator or fiduciary of such a plan.
Notwithstanding the foregoing,
(i) no Person who or which, at the close of business on the
date hereof, shall be the Beneficial Owner of 10% or more of the shares of
Common Stock of the Company then outstanding shall be deemed an "Acquiring
Person"; provided, however, that, subject to clause (ii) below, if a Person is,
at the close of business on the date hereof, the Beneficial Owner of 10% or more
of the shares of Common Stock of the Company then outstanding and shall
thereafter become the Beneficial Owner of additional shares of Common Stock of
the Company at any time that the Person is or thereby becomes the Beneficial
Owner of 10% or more of the shares of Common Stock of the Company then
outstanding (other than shares acquired solely as a result of corporate action
of the Company not caused, directly or indirectly, by such Person), then such
Person shall be deemed to be an "Acquiring Person"; and
(ii) no Person shall become an "Acquiring Person" solely as a
result of an acquisition of shares of Common Stock of the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 10% or more of the shares of Common
Stock of the Company then outstanding; provided, however, that if a Person
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would, but for the provisions of this clause (ii), become an Acquiring Person by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional shares of Common
Stock of the Company at any time that the Person is or thereby becomes the
Beneficial Owner of 10% or more of the shares of Common Stock of the Company
then outstanding (not as a result of any action or transaction contemplated in
this clause (ii) or in clause (iii) below), then such Person shall be deemed to
be an "Acquiring Person"; and
(iii) no Person shall become an "Acquiring Person" solely as a
result of an action or transaction or series of related actions or
transactions approved by the Board of Directors of the Company before such
Person would otherwise have become an "Acquiring Person"; provided, however,
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that if any Person which, but for the foregoing provisions of this clause (iii),
would have become an "Acquiring Person" shall thereafter acquire additional
shares of Common Stock (not as a result of any action or transaction
contemplated in clause (ii) above or in this clause (iii)), then such person
shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock of the Company so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) (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 (other than these Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, 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; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy given to such Person in response to a public proxy
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether or not in
writing) (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of securities)
for the purpose of acquiring, holding, voting (except to the extent contemplated
by the provisions of Section 1(c)(ii)(B) hereof) or disposing of any securities
of the Company.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the City of Spokane,
Washington or the City of New York, New York are authorized or obligated by law
or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M. New York time, on the next succeeding
Business Day.
(f) "Common Stock" when used with reference to the Company
shall mean the common stock, without par value, of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person other
than an individual, the Person or Persons other than an individual which
ultimately control such first-mentioned Person.
(g) "Company" shall have the meaning set forth in the preamble
hereto.
(h) "Current Per Share Market Price" shall have the meaning
set forth in Section 11(d)(i) hereof.
(i) "Depositary Agent" shall have the meaning set forth in
Section 14(b) hereof. The entity acting as Rights Agent may also act as
Depositary Agent.
(j) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(l) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(m) "Preferred Stock" shall mean a series of the Company's
Preferred Stock, without par value, having the relative rights and
preferences set forth in the form of Articles of Amendment to Restated
Articles of Incorporation of Avista Corporation, attached hereto as Exhibit A.
(n) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
(o) "Record Date" shall have the meaning set forth in the
recital hereto.
(p) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Redemption Price" shall have the meaning set forth in
Section 23(b) hereof.
(r) "Right" shall have the meaning set forth in the recital
hereto.
(s) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof, and shall be substantially in the form attached to this
Agreement as Exhibit B.
(t) "Rights Agent" shall have the meaning set forth in the
preamble hereto and includes a Co-Rights Agent or Co-Rights Agents as provided
in Section 2 hereto.
(u) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(v) "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.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of shares of the Common Stock of the
Company) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time act as
Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable. Any actions which may be taken by and any deliveries which are to be
made to the Rights Agent pursuant to the terms of this Agreement may be taken by
and may be delivered to any such Co-Rights Agents. To the extent that any
Co-Rights Agent takes any action pursuant to this Agreement, such Co-Rights
Agent shall be entitled to all of the rights and protections of, and subject to
all of the applicable duties and obligations imposed upon, the Rights Agent
pursuant to the terms of this Agreement.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the close of business on the tenth Business Day after the Shares
Acquisition Date (or, if the Shares Acquisition Date shall have occurred prior
to the Record Date, the close of business on the tenth Business Day after the
Record Date) or (ii) the close of business on the tenth Business Day after the
date of the commencement of a tender or exchange offer the consummation of which
would result in any Person becoming an Acquiring Person (or such later date as
the Board of Directors may determine by resolution adopted prior to the Shares
Acquisition Date) (such date being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced by the certificates for shares of
Common Stock of the Company and not by separate Right Certificates, and (y) the
Rights will be transferable only in connection with, and will automatically be
transferred by, a transfer of the associated shares of Common Stock of the
Company. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of shares of
Common Stock of the Company as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, a Right
Certificate in the form described in Section 4 hereof (a "Right Certificate"),
evidencing one Right for each share of Common Stock so held. On 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 of the Company issued after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date, and
certificates evidencing such shares 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,
dated as of ____________, ____ (the "Rights Agreement"),
between Avista Corporation and The Bank of New York, the terms
of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of
Avista Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Avista Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. As described in the
Rights Agreement, Rights beneficially owned by an Acquiring
Person or an Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement) and any
Transferee shall become null and void."
In the event that the Company shall purchase or acquire any shares of Common
Stock of the Company after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date any Rights
associated with such shares of Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares of Preferred Stock and of assignment
to be printed on the reverse thereof) may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board,
its President, or any of its Vice Presidents, either manually or by facsimile
signature, shall have affixed thereto the Company's seal or a facsimile thereof,
and shall be attested by the Corporate Secretary or an Assistant Corporate
Secretary, or the Treasurer or an Assistant Treasurer, of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually or
by facsimile signature countersigned by the Rights Agent and shall not be valid
for any purpose unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificate nevertheless may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its shareholder services office, 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.
Subject to the provisions of Sections 7(e) and 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a share of
Preferred Stock as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the shareholder services office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any such action whatsoever with respect to the transfer of any
such surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliate or Associate thereof as the Company shall reasonably request.
Thereupon, the Rights Agent shall, subject to Sections 7(e) and 14 hereof,
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, at any time after the
Distribution Date, and at or prior to the earlier of (i) the close of business
on March 31, 2009 (the "Final Expiration Date"), or (ii) the time at which the
Rights are redeemed or exchanged as provided in Section 23 hereof (the
"Redemption Date"), the registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein, including
without limitation any restriction on exercisability set forth in or resulting
from Xxxxxxx 0, Xxxxxxx 00(x)(xxx), Section 14 and Section 20(j) hereof) in
whole or in part upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the Purchase Price
for each one one-hundredth of a share of Preferred Stock as to which the Rights
are exercised.
(b) The purchase price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right (the "Purchase Price")
shall initially be $70.00, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment of the Purchase Price for the shares of
Preferred Stock (including fractions thereof) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent for the shares of
Preferred Stock certificates for the number of whole shares of Preferred Stock
to be purchased and the Company hereby irrevocably authorizes such transfer
agent to comply with all such requests, or (B) requisition from the Depositary
Agent depositary receipts representing such number of one one-hundredths of a
share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the Depositary Agent) and the Company hereby directs the
Depositary Agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder
of such Right Certificate. The payment of the Purchase Price shall be made in
cash or by certified bank check or bank draft payable to the order of the
Company or Rights Agent. The provisions of this subsection (c) are subject to
the provisions of subsections (e) and (f) of this Section 7 and the provisions
of Section 20(j) hereof.
(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 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the date upon which any person shall become an Acquiring
Person, any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become and be null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. Each of the Company and the Rights Agent shall use all reasonable
efforts to ensure that (x) no Right Certificate shall be issued pursuant to
Section 3 hereof that represents any such Right, (y) no Right Certificate shall
be issued at any time upon the transfer of any Rights to or from an Acquiring
Person or any Associate or Affiliate thereof or to or from any nominee of such
Acquiring Person, Associate or Affiliate and (z) any Right Certificate delivered
to the Rights Agent for such a transfer shall be canceled.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to the exercise of any Rights unless the registered
holder thereof 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 Rights Agent or the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in 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 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 in accordance with Rule
17Ad-7 under the Exchange Act, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock. The Company
covenants and agrees that it will cause to be reserved and kept available
out of its authorized and unissued shares of Preferred Stock the number of
shares of Preferred Stock that will be sufficient to permit the exercise in full
of all outstanding Rights.
The Company shall use all reasonable efforts, as soon as practicable
following the Shares Acquisition Date, to obtain such regulatory approvals and
take such other action as may be required for it to issue and/or sell securities
purchasable upon the exercise of the Right.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable pursuant to Section 7 hereof or pursuant to the
provisions contemplated by Section 11(a)(ii) hereof, and the Company shall have
no obligations thereunder, (a) unless and until any regulatory approvals
required for the issuance and/or sale of securities upon such exercise have been
obtained, (b) if the exercise thereof, or the issuance and/or sale of the
securities to be purchased upon such exercise, would violate or contravene any
applicable law, regulation or administrative or judicial order or (c) in any
jurisdiction if any requisite filings under any applicable securities law shall
not have been made or become effective in such jurisdiction.
The Company shall take all such action as may be necessary to ensure
that all securities delivered upon exercise of Rights shall be duly and validly
authorized and issued and, if equity securities, fully paid and nonassessable.
The Company shall pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the issuance
or delivery of the Right Certificates or of any securities upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts for securities in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
transfer or exercise or to issue or to deliver any certificates or depositary
receipts for securities upon the exercise of any Rights until any such tax shall
have been paid by the holder of such Right Certificate or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Issuance 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 shares of Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made (or if such day is not a Business Day, the next
succeeding Business Day).
Section 11. Adjustment of Purchase Price, Amount and Type of
Securities or Number of Rights. The Purchase Price, the amount and type of
securities 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 and prior to the Shares Acquisition Date (A) declare a
dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the outstanding shares of
Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one Right.
(ii) Subject to the provisions of Section 7(e), Section
9, Section 14 and Section 20(j) hereof, in the event any Person shall become
an Acquiring Person, 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 Purchase Price, (A) in lieu of
shares of Preferred Stock that number of shares of Common Stock of the Company
having an aggregate Current Per Share Market Price on the Shares Acquisition
Date equal to twice the Purchase Price or (B) at the election of the Company,
that number of shares of Preferred Stock equal to the number of shares of Common
Stock determined in accordance with clause (A) multiplied by one one-hundredth.
(iii) In the event that (x) there shall not be sufficient
shares of Common Stock of the Company and/or Preferred Stock or a
combination thereof authorized but unissued, or there shall not have been
received any regulatory approval required, to permit the exercise in full of the
Rights, and the performance by the Company of its obligations thereunder, in
accordance with the foregoing subparagraph (ii), or (y) the issuance of Common
Stock of the Company and/or Preferred Stock upon such exercise shall not then be
permitted under the Company's Restated Articles of Incorporation or any
applicable law or administrative or judicial regulation or order, the Company
may, at its option, with respect to some of or all of the Rights (as hereinafter
provided), make adequate provision to substitute, upon exercise of each such
Right but subject to Section 9 hereof, (1) cash, (2) a reduction in the Purchase
Price, (3) equity securities of the Company and/or its Subsidiaries, (4) debt
securities of the Company and/or its Subsidiaries, (5) other assets or
securities, or (6) any combination of the foregoing, having an aggregate value
equal to the aggregate Current Per Share Market Price on the Shares Acquisition
Date of the securities for which each such Right would otherwise be exercisable
pursuant to Section 11(a)(ii) hereof (such aggregate value to be determined by
the Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, which determination shall be described in a statement filed with the
Rights Agent). To the extent that the Board of Directors of the Company
determines that some action need be taken pursuant to the first sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights (or to
Rights pro rata or such other reasonable method of allocation as shall be
determined by the Board of Directors of the Company, to the extent that such
action applies to less than all the Rights), and (y) may suspend the
exercisability of the Rights in order to seek any authorization of additional
shares, to take any action to obtain any required regulatory approval, to decide
the appropriate form of distribution to be made pursuant to such first sentence
and to determine the value thereof and/or to take any other action deemed by the
Company to be legally required in order to effect such distribution. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of shares of Preferred Stock
prior to the Shares Acquisition Date 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 shares of Preferred Stock ("equivalent preferred shares")) or
securities convertible into shares of Preferred Stock or equivalent preferred
shares at a price per share of Preferred Stock or equivalent preference share
(or having a conversion price per share, if a security convertible into shares
of Preferred Stock or equivalent preferred shares) less than the then Current
Per Share Market Price of the Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Per Share Market Price and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent preference shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed. 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.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of shares of the Preferred Stock prior to the
Shares Acquisition Date (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then Current Per
Share Market Price of the Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one share
of Preferred Stock and the denominator of which shall be such Current Per Share
Market Price of a share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"Current Per Share Market Price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the average
of the daily closing prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the Current Per Share Market
Price of the Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution on such
Security or (B) any subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
or such other system then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
Current Per Share Market Price of shares of the Preferred Stock on any date
shall be determined in accordance with the method set forth in Section 11(d)(i)
hereof. If the shares of Preferred Stock are not publicly traded, the Current
Per Share Market Price of the shares of Preferred Stock shall be conclusively
deemed to be the Current Per Share Market Price of the shares of Common Stock of
the Company as determined pursuant to Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock dividend, reclassification or similar
transaction occurring after the Distribution Date), multiplied by one-hundred.
If neither the Common Stock nor the Preferred Stock are publicly held or so
listed or traded, Current Per Share Market Price shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in the Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-millionth of
a share of Preferred Stock or one ten-thousandth of any other share or security,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13 hereof, the holder of any Right thereafter exercised
shall become entitled to receive any securities or assets other than shares of
Preferred Stock, the provisions of this Agreement with respect to the Preferred
Stock shall apply as appropriate to any such other securities or assets in order
to fully realize the benefits intended to be conferred by Section 11(a) and/or
Section 13 hereof.
(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) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c) hereof,
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one-hundredths of a share of Preferred Stock (calculated to the
nearest one one-millionth of a share of Preferred Stock) obtained by (i)
multiplying (x) the number of one-hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of 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-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 one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed, subject to
the provisions of Section 7(e) hereof, to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and 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-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-hundredths of a share of Preferred Stock which were expressed in the initial
Right Certificates issued hereunder.
(k) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Stock and other securities, if any, issuable upon such exercise
over and above the Preferred Stock and other securities, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such securities upon the occurrence of the event requiring such
adjustment.
(l) 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, dividends on shares of Preferred Stock payable in Preferred Stock or
issuance of rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Preferred Stock shall not
be taxable to such shareholders.
(m) 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 its shares of Common Stock payable in Common Stock or
(ii) effect a subdivision, combination or consolidation of its Common Stock (by
reclassification or otherwise than by payment of dividends in its Common Stock)
into a greater or lesser number of shares of Common Stock of the Company, then
in any such case (i) the Purchase Price in effect after such event upon proper
exercise of each Right shall be determined by multiplying the Purchase Price in
effect immediately prior to such event by a fraction, the numerator of which is
the number of such shares of Common Stock outstanding immediately before such
event and the denominator of which is the number of such shares of Common Stock
outstanding immediately after such event, and (ii) each share of Common Stock of
the Company outstanding immediately after such event shall have issued with
respect to it that number of Rights which each such share of Common Stock
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(m) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 hereof,
take (or permit any Subsidiary to take) any action if at the time such action is
taken, it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common Stock
of the Company or the Preferred Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power or Certain Other Transactions. In the event that, following
the Shares Acquisition Date, directly or indirectly (a) the Company shall
consolidate with, or merge with and into, any other Person, (other than a
subsidiary of the Company in a transaction which complies with Section 11(n)
hereof), (b) any Person (other than a subsidiary of the Company in a transaction
which complies with Section 11(n) hereof) shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all or
part of the shares of Common Stock of the Company shall be changed into or
exchanged for stock or other securities of any other Person (or the Company) or
cash or any other property or (c) 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 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person, or to two or more Persons which are affiliated or otherwise acting
in concert, other than the Company or one or more of its wholly-owned
Subsidiaries (other than a subsidiary of the Company in a transaction which
complies with Section 11(n) hereof), then, and in each such case, proper
provision shall be made so that (i) each holder of a Right shall thereafter have
the right to receive, upon the exercise thereof at a price equal to the Purchase
Price, that number of shares of Common Stock of such other Person (including the
Company as successor thereto or as the surviving corporation) having an
aggregate Current Per Share Market Price on the date of consummation of such
transaction equal to twice the Purchase Price, (ii) the issuer of such shares
of Common Stock shall thereafter be liable for, and shall assume, by virtue of
such transaction, all the obligations and duties of the Company pursuant to this
Agreement, (iii) the term "Company" shall thereafter be deemed to refer to such
issuer, and (iv) such issuer shall take such steps (including, but not limited
to, the reservation of a sufficient number of its shares of Common Stock in
accordance with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the shares of Common Stock
thereafter deliverable upon the exercise of the Rights. The Company shall not
enter into or permit to occur any such transaction unless prior thereto (a) the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing and (b) the issuance of shares of Common
Stock of such issuer upon exercise of Rights (as they shall have been modified
pursuant to the immediately preceding sentence) shall have been approved, to the
extent required, by all regulatory authorities having jurisdiction over such
issuance, and all other actions necessary in order to permit in full, upon
exercise of Rights, the issuance of such shares of Common Stock (including,
without limitation, the reservation of sufficient such shares of Common Stock to
enable all outstanding Rights to be exercised in full) shall have been
completed. The Company shall not enter into or permit to occur any transaction
of the kind referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements which would eliminate or materially diminish the
benefits intended to be afforded by the Rights, including the benefits intended
to be conferred by this Section 13 upon consummation of such transaction. The
provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, sales and other transactions referred to in this Section 13.
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. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of a
share of Preferred Stock (other than fractions which are integral multiples
of one one-hundredth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock). Fractions of a share 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
(the "Depositary Agent"), provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Stock represented by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a share
of Preferred Stock, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Preferred Stock. For 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 the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional securities upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates; and any registered holder of any Right Certificate, without the
consent of the Rights Agent or of the holder of any other Right Certificate,
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 the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock
of the Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer;
(c) subject to Sections 6 and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, 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 of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company shall use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of a share of
Preferred Stock or any other securities 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 shareholder or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except as
expressly provided herein), 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. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for a share of Preferred Stock or Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any Person into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time 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.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer, the Secretary, or any Assistant Treasurer or Assistant
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, and all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
or any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Section 3, 11 or 13 hereof, or the ascertaining
of the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice that such change or adjustment is required); 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 Common Stock of the Company or Preferred Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer, the Secretary, or any Assistant
Treasurer or Assistant Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall forthwith bring such surrender to the attention
of the Company and shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock of the Company or Preferred Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock of the Company or Preferred Stock by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing business under the
laws of the United States or the State of New York or the State of Washington
(or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of Washington or
the State of New York), in good standing, having an office in the State of
Washington or the State of New York, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million, or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock of
the Company or Preferred 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 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 of the Company following the
Distribution Date and prior to the Redemption Date or the Final Expiration Date,
the Company shall, with respect to shares of Common Stock of the Company so
issued or sold pursuant to the exercise of stock options outstanding prior to
the Distribution Date, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and outstanding prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale; provided, however, that no
such Right 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 or Exchange. (a) The Rights may be redeemed or
exchanged by action of the Board of Directors pursuant to this Section 23
and shall not be redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the close of business on the tenth Business Day after the
Shares Acquisition Date (or, if the Shares Acquisition Date shall have occurred
prior to the Record Date, the close of business on the tenth Business Day after
the Record Date), elect to redeem all, but not less than all, the then
outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). In the event that the aggregate
redemption price payable to any holder of Rights for all Rights held by such
holder shall not be evenly divisible by $.01, the fraction of one cent otherwise
payable to such holder shall be increased to one cent.
(c) The Board of Directors of the Company may, at its option but
subject to receipt of any required regulatory approvals, at any time after
the Shares Acquisition Date and prior to such time an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding shares of Common Stock
of the Company, elect to exchange all, but not less than all, the then
outstanding Rights (other than Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for (i) shares of Common Stock of the Company
at an exchange ratio of one share of Common Stock of the Company per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Distribution Date any issuance or
distribution of securities, cash or assets in respect of, in lieu of or in
exchange for a share of Common Stock of the Company and/or Preferred Stock
(whether by dividend, in a reclassification or recapitalization, or otherwise,
including any such transaction involving a merger or consolidation), shall have
occurred; provided, however, that in the event that insufficient shares of
Common Stock of the Company are authorized but unissued, or otherwise available
for issuance, to permit in full the exchange provided hereby, then each Right
shall be exchanged for (x) that fraction of a share of Common Stock of the
Company, the numerator of which shall be the total number of shares of Common
Stock of the Company authorized but unissued or otherwise available for issuance
and the denominator of which shall be the aggregate number of such shares of
Common Stock of the Company which would have been issued pursuant to this
subparagraph (c)(i) had such shares of Common Stock been available for issuance,
plus (y) that fraction of a share of Preferred Stock, also appropriately
adjusted as provided herein, the numerator of which shall be one minus the
fraction of a share of Common Stock of the Company to be so issued and the
denominator of which shall be one hundred, or (ii) cash, debt or equity
securities of the Company and/or a Subsidiary thereof or other assets or any
combination of the foregoing having an aggregate value (when paid) equal to the
Current Per Share Market Price of one share of Common Stock of the Company at
the Shares Acquisition Date.
(d) Immediately upon the action of the Board of Directors of the
Company electing to redeem or exchange the Rights pursuant to subsection
(b) or (c) of this Section 23, and without any further action and without any
notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price or the
securities or assets referred to in subsection (c) of this Section 23, as the
case may be. Within 10 days after such action of the Board of Directors electing
to redeem or exchange the Rights pursuant to subsection (b) or (c) of this
Section 23, the Company shall give notice thereof to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at their 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 of the Company. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption or exchange will state the method by
which the payment of the Redemption Price or the exchange 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, other than in connection with the
acquisition or purchase of shares of Common Stock of the Company prior to the
Distribution Date.
Section 24. Notice of Certain Events. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the
holders of shares of its Preferred Stock or to make any other distribution to
the holders of shares of its Preferred Stock (other than a regular quarterly
cash dividend), (ii) to offer to the holders of shares of its Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), (iv) to effect any transaction set forth in Section 13 hereof,
(v) to affect the liquidation, dissolution or winding up of the Company, or (vi)
to declare or pay any dividend on the Common Stock of the Company payable in
shares of Common Stock of the Company or to effect a subdivision, combination or
consolidation of the Common Stock of the Company (by reclassification or
otherwise than by payment of dividends in shares of Common Stock of the
Company), then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transaction, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Stock of the Company and/or
Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 20
days prior to the record date for determining holders of shares of the Preferred
Stock for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of shares of the Common Stock of
the Company and/or Preferred Stock, whichever shall be the earlier.
(b) In case the Shares Acquisition Date shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of the occurrence of such event, which notice shall
describe the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any 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:
AVISTA CORPORATION
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
THE BANK OF NEW YORK
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
-----------
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 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent may supplement or amend this Agreement in any respect without
the approval of any holders of shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent may supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order to
(a) cure any ambiguity,
(b) correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions
herein,
(c) shorten or lengthen any time period hereunder, or
(d) change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person);
provided, however, this Agreement may not be supplemented or amended to
-------- -------
lengthen, pursuant to clause (c) of this sentence, (i) a time period relating to
when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (ii) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the number of one-hundredths of a share of Preferred Stock for
which a Right is exercisable (other than to reflect an adjustment effected by
the operation of any provision of this Agreement or which advances the Final
Expiration Date). Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of shares
of Common Stock. Notwithstanding any other provision hereof, the Rights Agent
shall not be required to consent to any amendment or supplement pursuant to this
Section 26 which alters in any adverse manner the Rights Agent's rights or
duties.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the shares of Common Stock of the Company)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the shares of Common Stock of the Company).
Section 29. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court or governmental authority
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 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 Washington 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 except for Sections 18, 19, 20 and 21
hereof which shall be governed by and construed in accordance with the laws of
the State of New York.
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
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
AVISTA CORPORATION
--------------------------------
By:
Name:
Title:
THE BANK OF NEW YORK
--------------------------------
By:
Name:
Title:
EXHIBIT A
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
OF
AVISTA CORPORATION
Articles of Amendment to the Restated Articles of Incorporation of
Avista Corporation are herein executed by said corporation pursuant to Section
23B.06.020 of the Washington Business Corporation Act as follows:
FIRST: The name of the corporation is Avista Corporation (the
"Corporation").
SECOND: The following amendment to the Restated Articles of
Incorporation of the Corporation, establishing and designating a series of
shares and fixing and determining certain of the relative rights and preferences
thereof, was duly adopted by the Board of Directors of the Corporation at a
meeting held on . No approval or consent of shareholders was
--------------------
required.
THIRD: The Restated Articles of Incorporation are hereby amended by the
addition of a paragraph ( ) to be inserted at the end of subdivision (o) of
---
Article THIRD, which shall be and read as follows:
( ) Series . There is hereby established a series of the
- -- --------
Preferred Stock of the Corporation which shall have, in addition to the general
terms and characteristics of all of the authorized shares of Preferred Stock of
the Corporation, the following distinctive terms and characteristics:
(a) The series of Preferred Stock of the Corporation shall consist
---------
of shares and be designated as "$ Preferred Stock, Series
---------- -------
".
-------
(b) The rate of dividend per annum on said series of Preferred
--------
Stock of the Corporation is hereby determined and fixed at the Dividend Rate (as
hereinafter defined) from time to time in effect.
The "Dividend Rate" per share per annum for the initial dividend period
ending shall be $ . The "Dividend Rate" per share per
------------ -------------
annum for each subsequent dividend period shall be equal to the greater of (i)
$ or (ii) 100 times the aggregate per share amount of all
----------
distributions (other than a distribution payable in Common Stock or a
subdivision of the outstanding Common Stock, by reclassification or otherwise)
paid or declared and set apart for payment on the Common Stock during such
dividend period. In the event the Corporation shall at any time after the
Distribution Date (as defined in that certain Rights Agreement, dated as of
__________ , ____, between the Corporation and the Rights Agent named therein)
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding Common Stock, by reclassification or otherwise, into a greater or
lesser number of shares of Common Stock, then, in each such case, the amount to
which holders of shares of said series of Preferred Stock were entitled
----
immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
after such event and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.
(c) The shares of said series shall not, by their terms, be
---------
redeemable.
(d) The amount payable upon the shares of said series in the event
---------
of dissolution, liquidation or winding up of the Corporation shall be $100 per
share plus a premium equal (subject to the provision for adjustment set forth in
paragraph (b)) to the excess, if any, of (i) an amount equal to 100 times the
aggregate amount, if any, to be distributed per share to the holders of shares
of the Common Stock over (ii) $100, plus an amount equivalent to the accumulated
and unpaid dividends thereon, if any, to the date of such dissolution,
liquidation or winding up. Anything herein to the contrary notwithstanding, no
amount of premium as set forth above shall be payable on shares of said
----
series unless the net assets of the Corporation available for distribution to
its stockholders shall exceed the sum of (I) the aggregate amount to which
holders of shares of all series of Preferred Stock of the Corporation other than
said series shall be entitled upon such dissolution, liquidation or winding
--
up and (II) the sum of (x) the product of $100 and the number of shares of said
series then outstanding and (y) an amount equivalent to the accumulated
-----
and unpaid dividends on such shares, if any, to the date of such dissolution,
liquidation or winding up.
(e) There shall be no sinking fund for the redemption or purchase of shares
of said series.
---------
(f) The share of said series shall not, by their terms, be convertible.
----
Dated: , 2000 AVISTA CORPORATION
-----------
By
---------------------------------------
By
----------------------------------------
EXHIBIT B
Form of Right Certificate
Certificate No. R- Rights
-----
NOT EXERCISABLE AFTER MARCH , 20 , OR EARLIER IF REDEMPTION
-- --
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION OR
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY TRANSFEREE OF
SUCH RIGHTS SHALL BECOME NULL AND VOID.
Right Certificate
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 ___________ , ____ (as amended from time to time, the
"Rights Agreement"), between Avista Corporation, a Washington corporation (the
"Company"), and (the "Rights Agent"), to purchase, subject to any required
regulatory approval, from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New
York City time, on March , 20 (subject to earlier redemption or exchange of
-- --
the Rights by the Company, as set forth in the Rights Agreement), at the
shareholders services office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid nonassessable share
of $ Preferred Stock, Series , without par value, (the "Preferred
------- ----
Stock"), of the Company, at a purchase price of $ per one one-hundredth
-------
of a share of Preferred Stock (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a share of Preferred Stock
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of [ ,
-----------
], based on the shares of Preferred Stock as constituted at such date. As
---
provided in the Rights Agreement, the Purchase Price and the number or amount of
securities or other assets 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 principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at either the office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase.
Notwithstanding any provision of this Right Certificate to the
contrary, the Rights evidenced by this Right Certificate shall not be
exercisable, and the Company shall have no obligations thereunder, (a) unless
and until any regulatory approvals required for the issuance and/or sale of
securities upon such exercise have been obtained, (b) if the exercise thereof,
or the issuance and/or sale of the securities to be purchased upon such
exercise, would violate or contravene any applicable law, regulation or
administrative or judicial order or (c) in any jurisdiction if any requisite
filings under any applicable securities laws shall not have been made or become
effective in such jurisdiction.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed or exchanged by the Company.
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. No fractional
securities will be issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of one one-hundredth
of such security, 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 shares of the
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 shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of [ , 20 ].
-------------- ---
ATTEST: AVISTA CORPORATION
By:
---------------------------------- ---------------------------
Countersigned:
By:
--------------------------------
Authorized Signature
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:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Certificate
The undersigned hereby certifies, for the benefit of the Company and
other holders of Rights, by checking the appropriate boxes, that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of Acquiring Person.
Dated: , 20
------------- --- -----------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase
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shares of the Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such shares of Preferred Stock be issued in the
name of:
Please insert social security or other identifying number
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(Please print name and address)
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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
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(Please print name and address)
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Dated: , 20
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Signature
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Certificate
The undersigned hereby certifies, for the benefit of the Company and
other holders of Rights, by checking the appropriate boxes, that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 20
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Signature
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
NOTICE
The signature in the foregoing Forms of Assignment and Election to
Purchase and Certificate must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
