XXXXXXXX RESOURCES, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY, RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF DECEMBER 14, 2000
TABLE OF CONTENTS
PAGE
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Section 1. Certain Definitions..............................................................................1
Section 2. Appointment of Rights Agent......................................................................6
Section 3. Issuance of Rights Certificates..................................................................6
(a) Distribution Date; Rights Certificates...........................................................6
(b) Common Stock Certificates; Summary of Rights.....................................................7
(c) Legend...........................................................................................7
Section 4. Form of Rights Certificates......................................................................8
(a) Form; Date.......................................................................................8
(b) Acquiring Person Legend..........................................................................8
Section 5. Countersignature and Registration................................................................9
(a) Signatures.......................................................................................9
(b) Registration and Transfer........................................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates....................................................9
(a) Procedure........................................................................................9
(b) Issuance of New Rights Certificates..............................................................10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....................................10
(a) Exercise.........................................................................................10
(b) Purchase Price...................................................................................11
(c) Rights Agent Actions.............................................................................11
(d) Partial Exercise.................................................................................12
(e) Termination of Acquiring Person's Rights.........................................................12
(f) Surrender of Rights Certificates; Identity of Beneficial Owner...................................12
Section 8. Cancellation and Destruction of Rights Certificates..............................................13
Section 9. Reservation and Availability of Capital Stock....................................................13
(a) Reservation of Capital Stock.....................................................................13
(b) Listing..........................................................................................13
(c) Registration under the Act.......................................................................13
(d) Covenant Regarding Capital Stock.................................................................14
(e) Transfer Taxes and Charges.......................................................................14
Section 10. Preferred Stock Record Date......................................................................14
Section 11. Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights......................15
(a) Certain Adjustments..............................................................................15
(b) Purchase Price Adjustment -- Capital Stock.......................................................18
(c) Purchase Price Adjustment -- Cash, Assets, etc...................................................19
(d) Current Market Price.............................................................................19
(e) Purchase Price Adjustment Threshold..............................................................20
(f) Equivalent Adjustments...........................................................................21
(g) Post-Adjustment Rights Issuances.................................................................21
(h) Preferred Stock Anti-Dilution....................................................................21
(i) Adjustment of Number of Rights...................................................................21
(j) Rights Certificates..............................................................................22
(k) Adjustment Below Par Value.......................................................................22
(l) Adjustment Effective as of Future Date; Exercise.................................................22
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(m) Tax Adjustments..................................................................................22
(n) Restriction on Certain Transactions..............................................................23
(o) Restriction Against Diminishing Benefits of the Rights...........................................23
(p) Common Stock Adjustments.........................................................................23
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......................................24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.............................24
(a) Flip-over Event..................................................................................24
(b) Principal Party..................................................................................25
(c) Supplemental Agreement...........................................................................25
(d) Exceptions.......................................................................................26
Section 14. Fractional Rights and Fractional Shares..........................................................26
(a) Fractional Rights................................................................................26
(b) Fractional Shares of Preferred Stock.............................................................27
(c) Fractional Shares of Common Stock................................................................27
(d) Waiver of Fractional Rights and Shares...........................................................28
Section 15. Rights of Action.................................................................................28
Section 16. Agreement of Rights Holders......................................................................28
Section 17. Rights Certificate Holder Not Deemed a Stockholder...............................................29
Section 18. Concerning the Rights Agent......................................................................29
(a) Compensation.....................................................................................29
(b) Reliance.........................................................................................29
Section 19. Merger or Consolidation or Change of Name of Rights Agent........................................30
(a) Successor........................................................................................30
(b) Prior Countersignatures..........................................................................30
Section 20. Duties of Rights Agent...........................................................................30
(a) Legal Counsel....................................................................................30
(b) Certification by the Company.....................................................................30
(c) Liability for Negligence, etc....................................................................31
(d) Statements of Fact or Recitals...................................................................31
(e) Agreement; Adjustments...........................................................................31
(f) Further Assurances...............................................................................31
(g) Instructions.....................................................................................31
(h) Dealing in Rights................................................................................31
(i) Agents; Reasonable Care..........................................................................31
(j) Expenses; Repayment Assurances...................................................................32
(k) Exercise of Rights; Consultation with Company....................................................32
Section 21. Change of Rights Agent...........................................................................32
Section 22. Issuance of New Rights Certificates..............................................................33
Section 23. Redemption and Termination.......................................................................33
(a) Redemption.......................................................................................33
(b) Effect of Redemption; Procedure..................................................................34
Section 24. Exchange.........................................................................................34
(a) Right to Exchange................................................................................34
(b) Effect of Exchange; Procedure....................................................................34
(c) Common Stock Equivalents.........................................................................35
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(d) Insufficient Common Stock........................................................................35
(e) Fractional Shares................................................................................35
Section 25. Notice of Certain Events.........................................................................35
(a) Preferred Stock Transactions, etc................................................................35
(b) Other Transactions...............................................................................36
Section 26. Notices..........................................................................................36
Section 27. Supplements and Amendments.......................................................................37
Section 28. Successors.......................................................................................38
Section 29. Determinations and Actions by the Board of Directors, etc........................................38
Section 30. Benefits of this Agreement.......................................................................38
Section 31. Severability.....................................................................................38
Section 32. Governing Law....................................................................................39
Section 33. Counterparts.....................................................................................39
Section 34. Descriptive Headings.............................................................................39
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of December 14, 2000, between Xxxxxxxx
Resources, Inc., a Nevada corporation (the "Company"), and American Stock
Transfer & Trust Company, a New York corporation (the "Rights Agent").
RECITALS
On December 8, 2000 (the "Rights Dividend Declaration Date"), the Board
of Directors of the Company authorized and declared a dividend distribution of
one Right for each share of Common Stock (as hereinafter defined) of the Company
outstanding at the close of business on December 18, 2000 (the "Record Date"),
and has authorized the issuance of one Right (as such number may hereafter be
adjusted pursuant to the provisions of Section 11(p) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights -- Common Stock
Adjustments)) for each share of Common Stock of the Company issued between the
Record Date (whether originally issued or delivered from the Company's treasury)
and the Distribution Date, each Right initially representing the right to
purchase one one-hundredth of a share of Series B Junior Participating Preferred
Stock of the Company having the rights, powers and preferences set forth in the
form of Certificate of Designation, Preferences and Rights attached hereto as
Exhibit 1, upon the terms and subject to the conditions hereinafter set forth
(the "Rights");
AGREEMENT
In consideration of the premises and the mutual agreements herein set
forth, the parties hereto 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 who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 20% or more of the
shares of Common Stock then outstanding, but shall not include (i) the Company,
(ii) any Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan, or (iv) any Person who becomes an Acquiring Person solely as a result of a
reduction in the number of shares of Common Stock outstanding due to the
repurchase of shares of Common Stock by the Company, unless and until such
Person shall purchase or otherwise become (as a result of actions taken by such
Person or its Affiliates or Associates) the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then outstanding shares of
Common Stock; provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Common Stock of the Company then outstanding by
reason of share repurchases by the Company and shall, after such share
repurchases by the Company, become the Beneficial Owner of any additional Common
Stock of the Company, then such Person shall be deemed to be an "Acquiring
Person," unless upon the consummation of the acquisition of such additional
shares of Common Stock such Person does not beneficially own 20% or more of the
shares of Common Stock then outstanding. 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, has
become such inadvertently (including, without limitation, because (i) such
Person was unaware that it beneficially owned a percentage of Common Stock that
would otherwise cause such Person to be an Acquiring Person, or (ii) such Person
was aware of the extent of its Beneficial Ownership of Common Stock but had no
actual knowledge of the consequences of such Beneficial Ownership under this
Agreement) and was without any intention of changing or influencing control of
the Company, and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no longer be an
Acquiring Person as defined pursuant to the foregoing provisions of this
paragraph, then such Person shall not be deemed to be or to have become an
Acquiring Person for any purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended as of the
date hereof and in effect from time to time.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments).
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
(e) "Agreement" shall mean this Rights Agreement as originally executed
or as it may from time to time be supplemented or amended pursuant to the
applicable provisions hereof.
(f) "Beneficial Owner"; "Beneficial Ownership": A Person shall be
deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not, for purposes of this
paragraph (i), be deemed the "Beneficial Owner" of or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, or (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates) or Section 22 (Issuance of New Rights Certificates) (the "Original
Rights") or pursuant to Section 11(i) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Adjustment of Number of Rights) in
connection with an adjustment made with respect to any Original Rights;
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(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by such Person on a
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are "beneficially owned," directly or indirectly, by
any other person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
the proviso to subparagraph (ii) of this paragraph (f)) or disposing of any
voting securities of the Company; provided, however, that nothing in this
paragraph (f) shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of or to "beneficially own," any
securities acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty (40) calendar days after
the date of such acquisition.
(g) "Board" means the Board of Directors of the Company.
(h) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of Texas are authorized or
obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00 P.M., Dallas,
Texas time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., Dallas, Texas time, on the next succeeding Business
Day.
(j) "Common Stock" shall mean the common stock, $.50 par value per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments).
(l) "Company" shall mean the Person named as the "Company" in the first
paragraph of this Agreement until a successor corporation shall have become
such, or until a Principal Party shall assume, and thereafter be liable for, all
obligations and duties of the
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Company hereunder, pursuant to the applicable provisions of this Agreement, and
thereafter "Company" shall mean such successor corporation or Principal Party.
(m) "Current Market Price" shall have the meaning set forth in Section
11(d) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Current Market Price).
(n) "Current Value" shall have the meaning set forth in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments).
(o) "Distribution Date" shall have the meaning set forth in Section
3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates).
(p) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights -- Purchase Price Adjustment -- Capital Stock).
(q) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended as of the date hereof and in effect on the date of this Agreement.
(r) "Exchange Number" shall mean the number of shares of Common Stock,
one one-hundredth of a share of Preferred Stock, or shares or other units of
other property for which a Right is exercisable immediately prior to the time of
the action of the Board to exchange the Rights.
(s) "Expiration Date" shall have the meaning set forth in Section 7(a)
(Exercise of Rights; Purchase Price; Expiration Date of Rights -- Exercise).
(t) "Final Expiration Date" shall mean the Close of Business on
December 18, 2010.
(u) "Flip-in Event" shall mean any event described in Section
11(a)(ii)(A) or (B) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments).
(v) "Flip-in Trigger Date" shall have the meaning set forth in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments).
(w) "Flip-over Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets
or Earning Power -- Flip-over Event).
(x) "Original Rights" shall have the meaning set forth in Section
1(f)(i) (Certain Definitions).
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(y) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company or other entity.
(z) "Preferred Stock" shall mean shares of Preferred Stock $10.00 par
value per share, of the Company (the "Series B Junior Participating Preferred
Stock"), and, to the extent that there is not a sufficient number of shares of
Series B Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock, $10.00 par value
per share, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series B Junior Participating
Preferred Stock.
(aa) "Principal Party" shall have the meaning set forth in Section
13(b) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power --
Principal Party).
(bb) "Purchase Price" shall have the meaning set forth in Section 4(a)
(Form of Rights Certificates -- Form; Date).
(cc) "Record Date" shall have the meaning set forth in the Recitals at
the beginning of this Agreement.
(dd) "Redemption Date" shall have the meaning set forth in Section
23(a) (Redemption and Termination -- Redemption).
(ee) "Redemption Price" shall have the meaning set forth in Section
23(a) (Redemption and Termination -- Redemption).
(ff) "Rights" shall have the meaning set forth in the Recitals at the
beginning of this Agreement.
(gg) "Rights Agent" shall mean the Person named as the "Rights Agent"
in the first paragraph of this Agreement until a successor Rights Agent shall
have become such pursuant to the applicable provisions hereof and thereafter
"Rights Agent" shall mean such successor Rights Agent. If at any time there is
more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, "Rights Agent" shall mean and include
each such Person.
(hh) "Rights Certificates" shall have the meaning set forth in Section
3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates).
(ii) "Rights Dividend Declaration Date" shall have the meaning set
forth in the Recitals at the beginning of this Agreement.
(jj) "Spread" shall have the meaning set forth in Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Certain Adjustments).
(kk) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to
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Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(ll) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of equity
securities or majority of the equity interest is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(mm) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments).
(nn) "Summary of Rights" shall have the meaning set forth in Section
3(b) (Common Stock Certificates; Summary of Rights).
(oo) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Current Market Price).
(pp) "Triggering Event" shall mean any Flip-in Event or any Flip-over
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such additional rights agents (the
"Co-Rights Agents") as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Distribution Date; Rights Certificates. Until the earlier of
(i) the Close of Business on the tenth Business Day after the Stock Acquisition
Date (or, if the tenth Business Day after the Stock Acquisition Date occurs
before the Record Date, the Close of Business on the Record Date), or (ii) the
Close of Business on the tenth Business Day (or such later date as the Board
shall determine prior to such time as any Person becomes an Acquiring Person)
after the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act, if upon consummation
thereof such Person would be the Beneficial Owner of 20% or more of the shares
of Common Stock then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company, except pursuant to
the provision of Section 23 (Redemption and Termination)). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the
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Close of Business on the Distribution Date, at the address of such holder shown
on the records of the Company, one or more rights certificates, in substantially
the form of Exhibit 2 hereto (the "Rights Certificates"), evidencing one Right
for each share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights -- Common Stock
Adjustments) at the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) (Fractional Rights and Fractional Shares -- Fractional
Rights)) so that Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) Common Stock Certificates; Summary of Rights. With respect
to certificates for the Common Stock outstanding as of the Record Date, until
the Distribution Date, the Rights associated with the Common Stock represented
by such certificates will be evidenced by such certificates alone and the
registered holders of such Common Stock shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date, the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock. On the
Record Date, or as soon as practicable thereafter, the Company will send a copy
of a Summary of Rights to Purchase Preferred Stock, in substantially the form of
Exhibit 3 hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of shares of Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company.
(c) Legend. Rights shall be issued in respect of all
certificates for shares of Common Stock which are issued (whether originally
issued or from the Company's treasury) after the Record Date but prior to the
earliest of the (i) Distribution Date, (ii) the Expiration Date, or (iii) the
Redemption Date, or, in certain circumstances provided in Section 22 (Issuance
of New Rights Certificates) after the Distribution Date. Certificates
representing such shares of Common Stock shall also be deemed to be certificates
for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement dated as of
December 14, 2000, by and between Xxxxxxxx Resources, Inc. (the
"Company") and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
offices of the Company. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the Rights
7
Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend,
until the earliest of (i) the Distribution Date, (ii) the Expiration Date, and
(iii) the Redemption Date, (x) the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone,
(y) the registered holders of such Common Stock shall also be the registered
holders of the associated Rights and (z) the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
such shares of Common Stock. In the event that the Company purchases, or
acquires any shares of Common Stock after the Record Date but prior to the
Distribution 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 Rights Certificates.
(a) Form; Date. The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit 2 hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed or any securities association on whose
interdealer quotation system the Rights may be from time to time authorized for
quotation, or to conform to usage. Subject to the provisions of Section 11
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights)
and Section 22 (Issuance of New Rights Certificates), the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-hundredth
of a share of Preferred Stock as shall be set forth therein at the price set
forth therein (such exercise price per one one-hundredth of a share is referred
to herein as the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Acquiring Person Legend. Any Rights Certificate issued
pursuant to Section 3(a) (Issuance of Rights Certificates -- Distribution Date;
Rights Certificates) or Section 22 (Issuance of New Rights Certificates) that
represents Rights beneficially owned by (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 7(e) (Exercise of
Rights; Purchase Price; Expiration Date of Rights -- Termination of Acquiring
Person's Rights) and any Rights Certificate issued pursuant
8
to Section 6 (Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates), Section
11 (Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights)
or Section 22 (Issuance of New Rights Certificates) upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement dated as of December 14, 2000, by and
between Xxxxxxxx Resources, Inc. and American Stock Transfer & Trust
Company, as Rights Agent). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the circumstances
specified in Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Termination of Acquiring Person's Rights)
of such Agreement.
Section 5. Countersignature and Registration.
(a) Signatures. The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested to by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile signature, and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Registration and Transfer. Following the Distribution Date,
the Rights Agent will keep or cause to be kept, at its principal office or
offices designated as the appropriate place for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of each of
the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Procedure. Subject to the provisions of Section 4(b) (Form
of Rights Certificates -- Acquiring Person Legend), Section 7(e) (Exercise of
Rights; Purchase Price; Expiration Date of Rights -- Termination of Acquiring
Person's Rights) and Section 14
9
(Fractional Rights and Fractional Shares), at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one one-hundredth
of a share of Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon, the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Issuance of New Rights 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 Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
them, and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Exercise. Subject to Section 7(e) (Exercise of Rights;
Purchase Price; Expiration Date of Rights -- Termination of Acquiring Person's
Rights), the registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein, including, without
limitation, the restrictions on exercisability set forth in Section 9(c)
(Reservation and Availability of Capital Stock -- Registration under the Act),
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments), Section 23(a) (Redemption and
Termination -- Redemption), and Section 24(b) (Exchange -- Effect of Exchange;
Procedure)) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase 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 aggregate Purchase Price with respect to
the total number of one one-hundredth of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable and an amount equal to any applicable
transfer tax, at or
10
prior to the earliest of (i) the Final Expiration Date, (ii) the Redemption
Date, or (iii) the expiration of the Rights pursuant to Section 13(d)
(Consolidation, Merger or Sale or Transfer of Assets or Earning Power --
Exceptions) (the earliest of (i), (ii) and (iii) being herein referred to as the
"Expiration Date"). The payment of the Purchase Price and the applicable
transfer tax, if any (as such amount may be reduced pursuant to Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments)), may be made (x) in cash, (y) by certified
check, cashier's check or money order payable to the order of the Company, or
(z) by delivery of a certificate or certificates (with appropriate stock powers
executed in blank attached thereto) evidencing a number of shares of Common
Stock equal to the then Purchase Price divided by the closing price (as
determined pursuant to Section 11(d) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Current Market Price) per share of Common
Stock on the Trading Day immediately preceding the date of such exercise. In the
event that the Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11(a), the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for distribution by
the Rights Agent, if and when appropriate. The Company reserves the right to
require prior to the occurrence of a Triggering Event that upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock would be issued.
(b) Purchase Price. The Purchase Price for each one
one-hundredth of a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $50.00, and shall be subject to adjustment from time to time
as provided in Section 11 (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) and Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event) and shall be payable in
accordance with paragraph (a) of this Section 7.
(c) Rights Agent Actions. Upon receipt of a Rights Certificate
representing exercisable Rights and the compliance by the holder of such Rights
Certificate with paragraph (a) of this Section 7, the Rights Agent shall,
subject to Section 20(k) (Duties of Rights Agent -- Exercise of Rights;
Consultation with Company), thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the total
number of one one-hundredth of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredth 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 will direct the
depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 (Fractional Rights and Fractional Shares), (iii)
after receipt thereof, deliver such certificates or depositary receipts to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in
11
cash or by certified bank check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or property are
available for distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.
(d) Partial Exercise. In case the registered holder of any
Rights Certificate shall exercise less than all the Rights evidenced thereby, a
new Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 14 (Fractional Rights and Fractional Shares).
(e) Termination of Acquiring Person's Rights. Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Flip-in Event, 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 such 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 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 null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) (Form of Rights Certificates --
Acquiring Person Legend) are complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any of its respective
Affiliates, Associates or transferees hereunder.
(f) Surrender of Rights Certificates; Identity of Beneficial
Owner. Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
12
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) Reservation of Capital Stock. The Company will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares of Common Stock held in its treasury), the
number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in
this Agreement, including the rights of the Company under Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Certain Adjustments) to otherwise fulfill its obligations, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) Listing. So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange or authorized for quotation on any
interdealer quotation system of any securities association, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
or quoted on such system upon official notice of issuance upon such exercise.
(c) Registration under the Act. The Company will use its best
efforts to (i) file, as soon as practicable following the earliest date after
the first occurrence of a Flip-in Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Certain Adjustments), or as soon as is
required by law following the Distribution Date, as the case may be, a
registration statement on an appropriate form under the Act with respect to the
securities purchasable upon exercise of the Rights, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities, and
(B) the Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed ninety
(90) calendar days after the date set forth in clause (i) of the first sentence
of this Section 9(c), the exercisability of the Rights in
13
order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement is required following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective.
(d) Covenant Regarding Capital Stock. The Company will take all
such action as may be necessary to ensure that all one one-hundredth of a share
of Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) Transfer Taxes and Charges. The Company will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates and
of any certificates for a number of one one-hundredth of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-hundredth of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than,
that of the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number of
one one-hundredth of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for a number of one one-hundredth of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated as of, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights
14
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) Certain Adjustments.
(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide or split the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification of
the Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and Section
7(e) (Exercise of Rights; Purchase Price; Expiration Date of Rights --
Termination of Acquiring Person's Rights), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, split, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
aggregate adjusted Purchase Price then in effect necessary to exercise a Right
in full, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock (or other capital
stock, as the case may be) transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, split, combination or reclassification. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event that:
(A) (1) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall merge into the Company or otherwise combine with
the Company and the Company shall be the continuing or surviving corporation of
such merger or combination and the Common Stock of the Company shall remain
outstanding and unchanged, or (2) subject to Section 23 (Redemption and
Termination), any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any subsidiary of the Company, or
any Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with its Affiliates
and Associates, shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such Person
15
to become an Acquiring Person is a Flip-over Event, or is an acquisition of
shares of Common Stock pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by a
majority of the Board after receiving advice from one or more recognized
investment banking firms selected by the Board, to be (a) at a price which is
fair to the stockholders of the Company (taking into account all factors which
the Board deems relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b) otherwise in the best interests
of the Company and its stockholders, other than such Acquiring Person, its
Affiliates and its Associates; or
(B) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any reverse stock
split), or recapitalization of the Company, or any merger or consolidation of
the Company with any of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries, other than a
transaction or transactions to which the provisions of Section 13(a)
(Consolidation, Merger or Sale or Transfer of Assets or Earning Power --
Flip-over Event) apply (whether or not with or into or otherwise involving an
Acquiring Person) which has the effect, directly or indirectly, of increasing by
more than 1% the proportionate share of the outstanding shares of any class of
equity securities of the Company or any of its Subsidiaries which is directly or
indirectly beneficially owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, then, promptly following the occurrence of
any such Flip-in Event (whether described in Section 11(a)(ii)(A) or (B)),
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Termination of Acquiring Person's Rights)) shall
thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of the
number of one one-hundredth of a share of Preferred Stock, such number of shares
of Common Stock as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-hundredth of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Flip-in Event, and (y) dividing that product (which, following
such first occurrence, shall thereafter be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the Current
Market Price per share of Common Stock on the date of such first occurrence
(such number of shares being referred to as the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
that are authorized by the Company's Restated Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with respect to each Right,
subject to Section 7(e)(Exercise of Rights; Purchase Price; Expiration Date of
Rights -- Termination of Acquiring Person's Rights), make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock which the Board has deemed to have
essentially the same value or economic rights as
16
shares of Common Stock (such shares of preferred stock being referred to as
"Common Stock Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value equal
to the Current Value (less the amount of any reduction in the Purchase Price),
where such aggregate value has been determined by the Board based upon the
advice of a recognized investment banking firm selected by the Board; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) calendar days following
the later of (x) the first occurrence of a Flip-in Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a) (Redemption
and Termination -- Redemption) expires (the later of (x) and (y) being referred
to herein as the "Flip-in Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) calendar day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) calendar days after the Flip-in Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such period, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e), that such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall be the Current
Market Price per share of the Common Stock on the Flip-in Trigger Date and the
value of any Common Stock Equivalent shall be deemed to have the same value as
the Common Stock on such date.
(iv) If the rules of the national securities exchange,
registered as such pursuant to Section 6 of the Exchange Act, or of the national
securities association, registered as such pursuant to Section 15A of the
Exchange Act, on which the Common Stock is principally traded or quoted would
prohibit such exchange or association from listing or continuing to list, or
from authorizing for or continuing quotation and/or transaction reporting
through an inter-dealer quotation system, the Common Stock or other equity
securities of the Company if the Rights were to be exercised for shares of
Common Stock in accordance with subparagraph (ii) of this Section 11(a) because
such issuance would nullify, restrict or disparately reduce the per share voting
rights of holders of Common Stock, the Company shall: (A) determine the Spread,
and (B) with respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) equity securities of the Company,
including, without limitation, Common Stock Equivalents, other than securities
which would have the effect of nullifying, restricting or disparately reducing
the per share voting rights of holders of Common Stock, (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has
been determined by the Board based upon the
17
advice of a recognized investment banking firm selected by the Board; provided,
however, if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) calendar days following the
Flip-in Trigger Date, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, cash having an aggregate value equal to the Spread. To the extent that
the Company determines that some action need be taken pursuant to the first
sentence of this Section 11(a)(iv), the Company (x) shall provide, subject to
Section 7(e) (Exercise of Rights; Purchase Price; Expiration Date of Rights --
Termination of Acquiring Person's Rights), that such action shall apply
uniformly to all outstanding Rights and (y) may suspend the exercisability of
the Rights, but not longer than ninety (90) calendar days after the Flip-in
Trigger Date, in order to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iv), the value of the Common Stock shall be the
Current Market Price per share of the Common Stock on the Flip-in Trigger Date
and the value of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock on such date.
(b) Purchase Price Adjustment -- Capital Stock. In case the
Company shall fix a record date for the issuance of rights, options or warrants
to all holders of Preferred Stock entitling them to subscribe for or purchase
(for a period expiring within forty-five (45) calendar days after such record
date) Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("Equivalent Preferred Stock")) or
securities convertible into Preferred Stock or Equivalent Preferred Stock at a
price per share of Preferred Stock or per share of Equivalent Preferred Stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) less than the Current Market
Price per share of Preferred Stock on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. 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 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.
18
(c) Purchase Price Adjustment -- Cash, Assets, etc. In case the
Company shall fix a record date for a distribution to all holders of Preferred
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights Purchase Price Adjustment -- Capital Stock)), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Market Price per
share of Preferred Stock on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator of which
shall be such Current Market Price per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) Current Market Price.
(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Certain Adjustments), the
Current Market Price per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for the
thirty (30) consecutive Trading Days immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii), the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such Common
Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock and the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification shall not have occurred prior to the commencement of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth
above, then, and in each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing price for each
Trading Day shall be the last sale price, regular way, or, in case no such sale
takes place on such Trading Day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common
19
Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported on the
Nasdaq National Market, the Nasdaq Small Cap Market or such other system then in
use, or, if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Common Stock selected by
the Board. If on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in good faith by
the Board shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not publicly held or
not so listed or traded, Current Market Price per share shall mean the fair
value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
Current Market Price per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the Current Market
Price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the Current Market Price
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the Current Market
Price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, Current Market Price
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the Current Market Price of one
one-hundredth of a share of Preferred Stock shall be equal to the Current Market
Price of one share of Preferred Stock divided by 100.
(e) Purchase Price Adjustment Threshold. Anything herein to the
contrary notwithstanding, no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (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 (Adjustment of Purchase Price; Number and Kind of Shares
or Number of Rights) shall be made to the nearest cent or to the nearest
hundredth of a share of Common Stock or other share or one ten-millionth of a
share of Preferred Stock, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date.
20
(f) Equivalent Adjustments. If as a result of an adjustment made
pursuant to Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights -- Certain Adjustments) or Section 13(a)
(Consolidation Merger or Sale or Transfer of Assets or Earning Power --
Flip-over Event) the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the Preferred Stock shall apply on like terms to
any such other shares.
(g) Post-Adjustment Rights Issuances. 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-hundredth 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) Preferred Stock Anti-Dilution. Unless the Company shall have
exercised its election as provided in Section 11(i) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights -- Adjustment of Number of
Rights), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Purchase Price Adjustment -- Capital
Stock) and Section 11(c) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights -- Purchase Price Adjustment -- Cash, Assets, etc.),
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredth of a share of Preferred Stock (calculated to the
nearest one millionth) obtained by (i) multiplying (x) the number of one
one-hundredth 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) Adjustment of Number of Rights. The Company may elect on or
after the date of any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one one-hundredth of a share
of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be exercisable
for the number of one one-hundredth 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 Rights Certificates have been issued, shall be at least ten (10)
calendar days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of
21
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing, subject to Section 14
(Fractional Rights and Fractional Shares) the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Rights Certificates. Irrespective of any adjustment or
change in the Purchase Price or the number of one one-hundredth of a share of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one one-hundredth of a share and the number of one
one-hundredth of a share which were expressed in the initial Rights Certificates
issued hereunder.
(k) Adjustment Below Par Value. Before taking any action that
would cause an adjustment reducing the Purchase Price below the then par or
stated value, if any, of the number of one one-hundredth of a share of Preferred
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action which is or may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable such
number of one one-hundredth of a share of Preferred Stock at such adjusted
Purchase Price.
(l) Adjustment Effective as of Future Date; Exercise. In any
case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the issuance to the holder
of any Right exercised after such record date the number of one one-hundredth of
a share of Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of one
one-hundredth of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Tax Adjustments. 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 in its good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in
22
this Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
(n) Restriction on Certain Transactions. The Company shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights -- Restriction Against Diminishing Benefits of the Rights)), (ii)
merge with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), (iii) enter into a statutory
share exchange or similar transaction with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
or (iv) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets, cash flow or earning
power aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), if (x) at the time of
or immediately after such consolidation, merger, statutory share exchange or
similar transaction, or sale there are any rights, warrants or other instruments
or securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger, statutory share exchange or similar transaction, or sale,
the stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) (Consolidation, Merger or Sale
or Transfer of Assets or Earning Power -- Flip-over Event) shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(o) Restriction Against Diminishing Benefits of the Rights. The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 (Redemption and Termination) or Section 27
(Supplements and Amendments) 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.
(p) Common Stock Adjustments. Anything in this Agreement to the
contrary notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide or split the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction, the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event. The adjustments provided for
in this Section 11(p) shall be made
23
successively whenever such a dividend is declared or paid or such subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights) and Section 13
(Consolidation, Merger or Sale or Transfer of Assets or Earning Power) the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Common Stock, a copy of such certificate, and (c) mail or cause the
Rights Agent to mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26
(Notices). The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) Flip-over Event. In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, or enter into a statutory stock exchange or
similar transaction with, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)(Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights -- Restriction
Against Diminishing Benefits of the Rights)), and the Company shall not be the
continuing or surviving corporation of such consolidation, merger or statutory
share exchange or similar transaction, (y) any Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o)) shall
consolidate with, or merge with or into, or enter into a statutory stock
exchange or similar transaction with, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation, merger or statutory
share exchange or similar transaction and, in connection with such
consolidation, merger or statutory share exchange or similar transaction, all or
part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets, cash flow or earning power aggregating
more than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o)), then, and in each such case (except as may be
contemplated by Section 13(d) (Consolidation, Merger or Sale or Transfer of
Assets or Earning Power -- Exceptions)), (i) proper provision shall be made so
that each holder of a Right, except as provided in Section 7(e) (Exercise of
Rights; Purchase Price; Expiration Date of Rights -- Termination of Acquiring
Person's Rights) shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable shares of Common Stock of the Principal Party,
not subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredth of a share of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Flip-over Event (or, if a Flip-in Event
24
has occurred prior to the first occurrence of a Flip-over Event, multiplying the
number of such one one-hundredth of a share for which a Right was exercisable
immediately prior to the first occurrence of a Flip-in Event by the Purchase
Price in effect immediately prior to such first occurrence), and (B) dividing
that product (which, following the first occurrence of a Flip-over Event, shall
be referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per share of the Common Stock
of such Principal Party on the date of consummation of such Flip-over Event;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Flip-over Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) shall apply only to such Principal Party following
the first occurrence of a Flip-over Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Certain Adjustments) hereof
shall be of no effect following the first occurrence of any Flip-over Event.
(b) Principal Party. "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event), the Person that is the
issuer of any securities into which shares of Common Stock of the Company are
converted in such consolidation, merger or statutory share exchange or similar
transaction, and if no securities are so issued, the Person that is the other
party to such consolidation, merger or statutory share exchange or similar
transaction, and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event), the Person that is the
party receiving the greatest portion of the assets, cash flow or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the total outstanding Common Stock having the greatest aggregate
market value.
(c) Supplemental Agreement. The Company shall not consummate a
Flip-over Event unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full
25
of the Rights in accordance with this Section 13 (Consolidation, Merger or Sale
or Transfer of Assets or Earning Power) and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of such Flip-over Event, the Principal Party will
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 (Consolidation, Merger or Sale or Transfer of
Assets or Earning Power) shall similarly apply to successive consolidations,
mergers or statutory share exchanges or similar transactions or sales or other
transfers. In the event that a Flip-over Event shall occur at any time after the
occurrence of a Flip-in Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power --
Flip-over Event).
(d) Exceptions. Notwithstanding anything in this Agreement to the
contrary, Section 13 (Consolidation, Merger or Sale or Transfer of Assets or
Earning Power) shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event) if (i) such transaction
is consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock which satisfies the requirements of Section 11(a)(ii)(A)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Certain Adjustments) (or a wholly-owned subsidiary of any such Person or
Persons), (ii) the price per share of Common Stock offered in such transaction
is not less than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to such tender or
exchange offer and (iii) the form of consideration being offered in such
transaction is the same as the form of consideration paid to all holders of
shares of Common Stock whose shares were purchased pursuant to such tender offer
or exchange offer. Upon consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) Fractional Rights. The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights -- Common Stock Adjustments), or to distribute Rights Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to
26
the same fraction of the current market value of a whole Right. For purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price of the Rights for any Trading Day shall be the last sale price, regular
way, or, in case no such sale takes place on such Trading 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 on the Nasdaq National Market, the Nasdaq
Small Cap Market 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. 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 shall be used.
(b) Fractional Shares of Preferred Stock. The Company shall not
be required to issue fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock which may at the option of the Company, be evidenced by
depositary receipts) 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).
Interests in fractions 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 selected by it; provided, however, 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 may
pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one one-hundredth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one one-hundredth of
a share of Preferred Stock shall be one one-hundredth of the closing price of a
share of Preferred Stock (as determined pursuant to Section 11(d)(ii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Current Market Price) for the Trading Day immediately prior to the date of such
exercise.
(c) Fractional Shares of Common Stock. Following the occurrence
of a Triggering Event, the Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of fractional shares
of Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c), the current market value of
one share of
27
Common Stock shall be the closing price of one share of Common Stock (as
determined pursuant to Section 11(d)(i) (Adjustment of Purchase Price; Number
and Kind of Shares or Number of Rights -- Current Market Price) for the Trading
Day immediately prior to the date of such exercise.
(d) Waiver of Fractional Rights and Shares. The holder of a
Right by the acceptance of the Right expressly waives his or her right to
receive any fractional Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 14 (Fractional Rights and Fractional
Shares).
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his or her own behalf and for
his or her 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 or her right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) (Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates -- Procedure) and Section 7(f) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Surrender of Rights Certificates; Identity of
Beneficial Owner), the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date
28
of Rights -- Termination of Acquiring Person's Rights), shall be required to
take any action or be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredth of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 (Notice of Certain Events)), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) Compensation. The Company shall 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
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 to be
done by the Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against or
investigating any claim of liability in the premises.
(b) Reliance. The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted to
be taken by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 (Duties of Rights Agent).
29
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Successor. Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 (Change of Rights Agent). In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of a predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) Prior Countersignatures. In case at any time the name of the
Rights Agent shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) Legal Counsel. 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 to be taken by it in good faith and in
accordance with such opinion.
(b) Certification by the Company. Whenever in the performance of
its duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation, the identity
of any Acquiring Person and the determination of Current Market Price) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer 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.
30
(c) Liability for Negligence, etc. The Rights Agent shall be
liable hereunder only for its own negligence, bad faith or willful misconduct.
(d) Statements of Fact or Recitals. The Rights Agent shall not
be liable for or by reason of any of the statements of fact or recitals
contained in this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature on such Rights Certificates),
but all such statements and recitals are and shall be deemed to have been made
by the Company only.
(e) Agreement; Adjustments. 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 Rights Certificate (except its
countersignature); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) or Section 13 (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power) or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and nonassessable.
(f) Further Assurances. The Company 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) Instructions. The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company and to apply
to such persons for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with the instructions of any such person.
(h) Dealing in Rights. The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) Agents; Reasonable Care. 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
31
any act, default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the selection
and continued employment thereof.
(j) Expenses; Repayment Assurances. No provision of this
Agreement shall require the Rights Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) Exercise of Rights; Consultation with Company. If, with
respect to any Rights 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 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 thirty (30) calendar days' notice in writing mailed to the Company, and to
each transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) calendar days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30) calendar 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 Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or of the State of Texas (or
of any State of the United States so long as such corporation (i) is authorized
to do business as a banking institution in any State of the United States and
(ii) has consented to service of process and jurisdiction in the State of
Texas), in good standing, which is authorized under such laws to exercise stock
transfer or corporate trust powers, is subject to supervision or examination by
federal or state authority and has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $10,000,000 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
32
Common Stock and the Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21 (Change of Rights Agent), or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, in either
case outstanding as of the Distribution Date, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material, adverse tax consequences
to the Company or the Person to whom such Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) Redemption. The Company may, at its option, at any time
prior to the earlier of (i) the Close of Business on the tenth Business Day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth
Business Day following the Record Date), or (ii) the Final Expiration Date,
redeem (the date of such redemption being referred to herein as the "Redemption
Date") all but not less than all of the then outstanding Rights at a redemption
price of $0.01 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"); provided, however, that any redemption after the Stock
Acquisition Date must be authorized by a majority of the entire Board; provided
further, however, that if, following the occurrence of a Stock Acquisition Date
and following the expiration of the right of redemption hereunder but prior to
any Triggering Event, (i) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly involving the
Company or any of its Subsidiaries, which did not result in the occurrence of a
Triggering Event such that such Person is thereafter a Beneficial Owner of 20%
or less of the outstanding shares of Common Stock, and (ii) there are not other
Persons, immediately following the occurrence of the event described in clause
(i), who are Acquiring Persons, then the right of redemption shall be reinstated
and thereafter be subject to the provisions of this Section 23. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the
33
first occurrence of a Flip-in Event until such time as the Company's right of
redemption hereunder has expired. The redemption of the Rights by the Company
may be made effective at such time, on such basis and with such conditions as
the Board in its sole discretion may establish. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on the Current
Market Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Effect of Redemption; Procedure. Immediately upon the action
of the Company ordering the redemption of the Rights and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the Redemption Date, the
Company shall (i) give notice of such redemption to the Rights Agent, (ii) give
public notice of such redemption; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such redemption,
and (iii) mail notice of such redemption to the holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Amounts payable shall be rounded
down to the nearest $0.01.
Section 24. Exchange.
(a) Right to Exchange. The Company may, at its option, at any
time and from time to time after the first occurrence of a Flip-in Event,
exchange all or part of the then outstanding and exercisable Rights (other than
Rights which have become void as provided in Section 7(e) (Exercise of Rights;
Purchase Price; Expiration Date of Rights -- Termination of Acquiring Person's
Rights)) for the Exchange Number of shares of Common Stock, shares or units of
Preferred Stock which the Board has determined to be a Common Stock Equivalent,
units of other property or any combination thereof as determined by the Board.
Notwithstanding the foregoing, the Company shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such Subsidiary or
any entity holding shares of Common Stock for or pursuant to any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.
The exchange of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board in its sole discretion may
establish.
(b) Effect of Exchange; Procedure. Immediately upon the action
of the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24, evidence of which shall have been filed with the Rights Agent
and without any further action and without any notice, the right to exercise
such Rights will terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock, Common Stock
Equivalents or units of other property equal to the number of such Rights held
by such holder multiplied by the Exchange Number. Promptly after the action of
the Company ordering the exchange of the Rights, the Company shall (i) file
evidence of such action with the Rights Agent, (ii) give public notice of such
exchange; provided, however, that the failure to give, or
34
any defect in, such notice shall not affect the validity of such exchange, and
(iii) mail notice of such exchange to the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void as provided in Section 7(e) (Exercise of Rights; Purchase
Price; Expiration Date of Rights -- Termination of Acquiring Person's Rights))
held by each holder of Rights.
(c) Common Stock Equivalents. In any exchange pursuant to this
Section 24, the Company, at its option, may substitute Common Stock Equivalents
for Common Stock exchangeable for Rights, at the initial rate of one share of
Common Stock Equivalent for each share of Common Stock, as appropriately
adjusted to reflect adjustments in the voting rights of the Common Stock
pursuant to the Company's Restated Articles of Incorporation, so that the share
of Common Stock Equivalent delivered in lieu of each share of Common Stock shall
have the same voting rights as one share of Common Stock.
(d) Insufficient Common Stock. In the event that the number of
shares of Common Stock which are authorized by the Company's Restated Articles
of Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit any exchange of
Rights in accordance with this Section 24, the Company may, at its option, take
all such action as may be necessary to authorize additional shares of Common
Stock for issuance upon such exchange.
(e) Fractional Shares. Upon the action of the Company ordering
the exchange of any Rights pursuant to paragraph (a) of this Section 24, the
Company shall not be required to issue fractions of shares or to distribute
certificates which evidence fractional shares. In lieu of such fractional
shares, the Company may pay to the registered holders of the Rights Certificates
with regard to which such fractional shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of one
share of Common Stock. For purposes of this Section 24, the current market value
of one share of Common Stock shall be the closing price of one share of Common
Stock (as determined pursuant to Section 11(d)(i) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Current Market Price)) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24, and the value of any Common Stock Equivalent shall be deemed to have the
same current market value as the Common Stock on such date.
Section 25. Notice of Certain Events.
(a) Preferred Stock Transactions, etc. In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company);
(ii) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options; (iii) to effect any
reclassification of its Preferred Stock (other than a
35
reclassification involving only the subdivision of outstanding shares of
Preferred Stock); (iv) to effect any consolidation with, merger into or with, or
statutory share exchange or similar transaction with, any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Restriction against Diminishing Benefits of the Rights)), or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)); (v) to effect the
liquidation, dissolution or winding up of the Company or (vi) to declare or pay
any dividend on the shares of Common Stock payable in Common Stock or to effect
a subdivision, combination or consolidation of the shares of Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock),
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 (Notices),
a notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, statutory share exchange
or similar transaction, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) calendar days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such action, and in the
case of any such other action, at least twenty (20) calendar days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be the earlier.
(b) Other Transactions. In case any of the events set forth in
Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments) shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 26
(Notices), a notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights under Section
11(a)(ii), and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer to Common Stock and/or, if appropriate,
other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by telecopier
(with receipt confirmed) or by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Xxxxxxxx Resources, Inc.
0000 Xxxx xxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Telecopier: (000) 000-0000
36
Subject to the provisions of Section 21 (Change of Rights Agent), any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by telecopier (with receipt confirmed) or by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Executive Vice President
Telecopier: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock; provided, however, that any supplement or
amendment of this Agreement after the Stock Acquisition Date must be approved by
a majority of the entire Board. From and after the Distribution Date and subject
to the penultimate sentence of this Section 27, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of any such Acquiring Person); provided, however, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights; provided further, that any
supplement or amendment of this Agreement after the Stock Acquisition Date must
be approved by a majority of the entire Board. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price, or the number of one one-hundredth of a share of Preferred Stock
for which a right is exercisable; provided, however, that at any time prior to
(i) the existence of an Acquiring Person or (ii) the date that a tender or
exchange offer by any
37
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if
upon consummation thereof, such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding, the Board may amend this
Agreement to increase the Purchase Price or extend 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 Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights. The fact that any determination or
failure to make a determination hereunder may provide or fail to provide
benefits to stockholders, to holders of Rights or to members of the Board shall
not in itself be deemed an absence of good faith on the part of the Board. No
member of the Board shall be personally liable for any act or omission in the
making or not making of any determination under this Agreement.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
38
invalidated; provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or restriction is held by
such court or authority to be invalid, void or unenforceable and the Board
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 (Redemption and Termination)
shall be reinstated and shall not expire until the Close of Business on the
tenth Business Day following the date of such determination by the Board.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Nevada and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: XXXXXXXX RESOURCES, INC.
By: By:
---------------------------------- -------------------------------------
Name: Name:
-------------------------------- -----------------------------------
Title: Title:
------------------------------- ----------------------------------
Attest: AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: By:
---------------------------------- -------------------------------------
Name: Name:
-------------------------------- -----------------------------------
Title: Title:
------------------------------- ----------------------------------
39
EXHIBIT 1
CERTIFICATE OF
DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
XXXXXXXX RESOURCES, INC.
Pursuant to the provisions of Sections 78.195 and 78.1955 of the
General Corporation Law of Nevada ("GCL"), the undersigned, M. Xxx Xxxxxxx,
President and Chief Executive Officer, and Xxxxxx X. Xxxxx, Secretary of
Xxxxxxxx Resources, Inc. (the "Corporation"), a corporation organized and
existing under the GCL, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
(the "Board") by the Restated Articles of Incorporation of the Corporation, the
said Board on December 8, 2000, adopted the following resolution creating a
series of 500,000 shares of Preferred Stock, $10.00 par value per share,
designated as Series B Junior Participating Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board in
accordance with the provisions of its Restated Articles of Incorporation, the
Board does hereby create, authorize and provide for the issuance upon the
exercise of the Corporation's Preferred Stock Purchase Rights, of a series of
Preferred Stock of the Corporation, and does hereby fix and state that the
designations, amounts, powers, preferences and relative and other special rights
and the qualifications, limitations or restrictions thereof are as follows:
Series B Junior Participating Preferred Stock
Section 1. Designation and Amount. The shares of such series shall be designated
as Series B Junior Participating Preferred Stock and the number of shares
constituting such series shall be 500,000.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series B Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series B Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, quarterly dividends
payable in cash on the last day of March, June, September and December (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series B Junior Participating Preferred
Stock, in an amount per share rounded to the nearest cent equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, one hundred (100) times the aggregate per share amount of all cash
dividends, and one hundred (100) times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of the common stock of the Corporation, $.50 par value
per share ("the Common Stock"), or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock,
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series B Junior Participating Preferred
Stock. In the event the Corporation shall at any time after December 8, 2000
(the "Rights Declaration Date") (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series B Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) The Corporation shall declare a dividend or distribution on
the Series B Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series B Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series B Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series B Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than thirty (30) days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series B Junior
Participating Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Junior Participating Preferred Stock shall entitle
the holder thereof to one hundred (100) votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the
2
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the number of votes per share
to which holders of shares of Series B Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) Except as otherwise provided herein or by law, the holders
of shares of Series B Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation. Except as otherwise provided
herein or by law, the holders of the shares of Series B Junior Participating
Preferred Stock shall not be entitled to vote as a separate class on any matters
submitted to a vote of the stockholders.
(c) Except as set forth herein, holders of Series B Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
B Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B Junior
Participating Preferred Stock, except dividends paid ratably on the Series B
Junior Participating Preferred Stock and all such junior stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B Junior
Participating Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either as to
dividends or
3
upon dissolution, liquidation or winding up) to the Series B Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series B Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series B Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series B Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series B Junior Participating
Preferred Stock shall have received $100.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series B Liquidation Preference").
Notwithstanding any provision of the Restated Articles of Incorporation to the
contrary, following the payment of the full amount of the Series B Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series B Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series B
Liquidation Preference by (ii) one hundred (100) (as appropriately adjusted as
set forth in paragraph (C) of this Section to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii) immediately above being referred to as the
"Adjustment Number"). Following the payment of the full amount of the Series B
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series B Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series B Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
4
Number to one (1) with respect to such Preferred Stock and Common Stock, on a
per share basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series B Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series B Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock,
securities, cash or any other property, then in any such case the shares of
Series B Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to one hundred (100) times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (ii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series B Junior Participating Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. Redemption. The outstanding shares of Series B Junior
Participating Preferred Stock may be redeemed at the option of the Board of
Directors as a whole, but not in part, at any time, or from time to time, at a
cash price per share equal to one hundred and one percent (101%) of (i) the
product of the Adjustment Number times the Average Market Value (as such term is
hereinafter defined) of the Common Stock, plus (ii) all dividends which on the
redemption date have accrued on the shares to be redeemed and have not been
paid, or declared and a sum sufficient for the payment thereof set apart,
without interest. The "Average Market Value" is the average of the closing sale
prices of the Common Stock during the thirty (30) day period immediately
preceding the date before the redemption date on the Composite Tape
5
for New York Stock Exchange Listed Stocks, or, if such stock is not quoted on
the Composite Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended, on which such
stock is listed, or, if such stock is not listed on any such exchange, the
average of the closing sale prices with respect to a share of Common Stock
during such thirty (30) day period, as quoted on the Nasdaq National Market, the
Nasdaq Small Cap Market or any system then in use, or if no such quotations are
available, the fair market value of the Common Stock as determined by the Board
of Directors in good faith.
Section 9. Ranking. The Series B Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. Except as otherwise provided in the Restated
Articles of Incorporation or by law, the Restated Articles of Incorporation of
the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series B Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series B Junior Participating Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. At the Corporation's sole discretion,
Series B Junior Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series B
Junior Participating Preferred Stock.
[Signature Page Follows]
6
IN WITNESS WHEREOF, the undersigned have executed and subscribed this
Certificate and do affirm the foregoing as true as of December ___, 2000.
XXXXXXXX RESOURCES, INC.
By:
--------------------------------------
M. Xxx Xxxxxxx
President and Chief Executive Officer
By:
--------------------------------------
Xxxxxx X. Xxxxx
Secretary
THE STATE OF _________ )
)
COUNTY OF _______________ )
This instrument was acknowledged before me on the ____ day of December,
2000, by M. Xxx Xxxxxxx, President and Chief Executive Officer, and Xxxxxx X.
Xxxxx, Secretary of Xxxxxxxx Resources, Inc. a Nevada corporation, on behalf of
said corporation.
----------------------------------------
Notary Public, State of
-------------
----------------------------------------
(Print Name of Notary)
My Commission Expires:
---------------------------
7
EXHIBIT 2
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R Rights
---- ------
NOT EXERCISABLE AFTER THE EARLIER OF DECEMBER 11, 2010 OR SUCH DATE AS THE
RIGHTS REPRESENTED HEREBY ARE REDEEMED BY XXXXXXXX RESOURCES, INC. (THE
"CORPORATION"). THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE CORPORATION, AT $0.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT DATED AS OF DECEMBER 14, 2000, BY AND BETWEEN
THE CORPORATION AND AMERICAN STOCK TRANSFER & TRUST COMPANY, AS RIGHTS AGENT
(THE "RIGHTS AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) (EXERCISE OF
RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS -- TERMINATION OF ACQUIRING
PERSON'S RIGHTS) OF SUCH AGREEMENT.](1)
RIGHTS CERTIFICATE
XXXXXXXX RESOURCES, INC.
This certifies that ___________________________________, or its, his or
her 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 December 14, 2000
(the "Rights Agreement"), between Xxxxxxxx Resources, Inc., a Nevada corporation
(the "Corporation"), and American Stock Transfer & Trust Company, a New York
corporation (the "Rights Agent"), to purchase from the Corporation at any time
prior to 5:00 P.M. (Dallas, Texas time) on December 18, 2010 at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-hundredth (1/100) of a fully paid, nonassessable share of
Series B Junior Participating Preferred Stock (the "Preferred Stock") of the
Corporation, at a purchase price of $50.00 per one one-hundredth (1/100) of a
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
December 18, 2000, based on the Preferred Stock as constituted at such date. The
Corporation
--------
(1) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
reserves the right to require, prior to the occurrence of a Triggering Event (as
such term is defined in the Rights Agreement), that upon any exercise of Rights,
a number of Rights be exercised so that only whole shares of Preferred Stock
would be issued.
Upon the occurrence of a Flip-in Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate or
any such Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of an Acquiring Person or its Associate or Affiliate who becomes a
transferee after such Acquiring Person or its Associate or Affiliate becomes
such, or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of an Acquiring Person or its Associate or Affiliate who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such,
such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Flip-in Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredth of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights for which this Rights Certificate is not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Corporation at its option at a
redemption price of $0.01 per Right at any time prior to the earlier of (a) the
Close of Business (as such term is defined in the Rights Agreement) on the tenth
(10th) Business Day (as such term is defined in the Rights Agreement) following
the Stock Acquisition Date (as such term is defined in the Rights Agreement) (as
such time period may be extended pursuant to the Rights Agreement) or (b) the
Final Expiration Date (as such term is defined in the Rights Agreement) and (ii)
may be exchanged in whole or in part for Preferred Stock, shares of the
Corporation's Common Stock, $.50 par value per share, other property or any
combination thereof.
2
In addition, subject to the provisions of the Rights Agreement, the
Rights may be exchanged, in whole or in part, for shares of the Common Stock, or
shares of common stock equivalents of the Corporation having essentially the
same value or economic rights as such shares. Immediately upon the action of the
Board of Directors of the Corporation authorizing any such exchange, and without
any further action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only enable holders
to receive the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth (1/100) of a share of Preferred Stock,
which may, at the election of the Corporation, be evidenced by depositary
receipts), but a cash payment will be made in lieu thereof, as provided in the
Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Corporation which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders of the Corporation at any
meeting thereof, or to give or withhold consent to any corporate action or to
receive notice of meetings or other actions affecting stockholders of the
Corporation (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
3
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Dated as of
-----------------------
ATTEST: XXXXXXXX RESOURCES, INC.
------------------------------------ -------------------------------------
Secretary By:
----------------------------------
Title:
-------------------------------
Countersigned:
RIGHTS AGENT
By:
---------------------------------
Authorized Signature
4
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers unto
____________________________________________________
(PLEASE PRINT NAME AND ADDRESS OF TRANSFEREE)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated:
----------------------------- -----------------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies 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 an Acquiring Person (as such terms are defined in 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 Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
----------------------------- -----------------------------------------
Signature
Signature Guaranteed:
5
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: Xxxxxxxx Resources, Inc.
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Corporation or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
Please insert social security or
other identifying number
--------------
--------------------------------------------------------------------------------
(PLEASE PRINT NAME AND ADDRESS)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or
other identifying number
--------------
--------------------------------------------------------------------------------
(PLEASE PRINT NAME AND ADDRESS)
--------------------------------------------------------------------------------
Dated:
----------------------------- -----------------------------------------
Signature
Signature Guaranteed:
6
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being acquired or exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
----------------------------- -----------------------------------------
Signature
Signature Guaranteed:
------------------------------
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
7
EXHIBIT 3
December 19, 2000
Dear Xxxxxxxx Resources Stockholders,
As you may be aware, on December 8, 2000, your Board of Directors
approved and adopted a Stockholder Rights Plan (the "Plan"). Like the
stockholder rights plan adopted in 1990 that it is intended to replace, the Plan
is designed to prevent a potential acquiror from gaining control of Xxxxxxxx
Resources, Inc. (the "Company") without fairly compensating all of its
stockholders. It provides for a dividend distribution of one preferred stock
purchase right (a "Right") for each outstanding share of common stock of the
Company held as of the close of business on December 18, 2000. These Rights will
replace the Rights under the stockholder rights plan adopted by the Company in
1990, which expired on December 18, 2000.
The Rights will initially trade with shares of the Company's common
stock and will have no impact on the way in which the Company's shares are
traded. At the outset of the Plan, there are no separate certificates or market
for the Rights. The Rights will not become exercisable and trade separately from
the common stock until the earlier of (i) ten business days after a public
announcement that a person has acquired 20% or more of the common stock of the
Company or (ii) ten business days (or any later date determined by the Company's
Board of Directors) after a person makes a tender or exchange offer for 20% or
more of the Company's common stock.
Pertinent details of the Plan are described in the attached Summary of
Rights To Purchase Preferred Stock, which we urge you to read carefully.
The adoption of the Plan is intended to help assure that any potential
acquiror seeking to obtain control of the Company will pay full and fair value
to all stockholders. The Rights are not intended to prevent any takeover or
proxy contest for control of the Company, but rather to increase the ability of
your Board to effectively represent the best interests of stockholders in the
event of an unsolicited attempt to acquire the Company. We are not aware of any
effort to acquire the Company, but we remain concerned about the possibility of
a takeover attempt that might include coercive and unfair tactics that do not
result in a fair price being paid to all stockholders. As a prudent response to
such a possibility, your Board has authorized the issuance of the Rights.
Issuance of the Rights will not have a dilutive effect, will not affect
reported earnings per share and should not cause the Company or you to recognize
gain for federal income tax purposes. In addition, the Plan does not weaken the
financial strength of the Company or interfere with its business plans.
A copy of the Plan has been filed with the Securities and Exchange
Commission and is available free of charge from the rights agent for the Plan.
Your Board of Directors and management are enthusiastic about the
potential for the Company and are committed to serving the best interests of the
Company's stockholders. The Board believes that the Plan represents a sound and
reasonable means of addressing the complex problems created by the possibility
of unfair takeover attempts. Accordingly, we take great satisfaction in
providing these new Rights to you to preserve the long-term value of your
investment in the Company.
Respectfully,
/s/ M. XXX XXXXXXX
---------------------------------------
M. Xxx Xxxxxxx
President and Chief Executive Officer
Enclosure
2
SUMMARY OF RIGHTS
On December 8, 2000, the Board of Directors of Xxxxxxxx Resources, Inc.
(the "Company"), declared a dividend distribution of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$0.50 per share (the "Common Stock") of the Company. The dividend is payable to
stockholders of record as of December 18, 2000 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one one-hundredth of
a share of Series B Junior Participating Preferred Stock, ten dollars ($10.00)
par value per share (the "Preferred Stock") at an exercise price of $50.00 (the
"Purchase Price") per one one-hundredth of a share of Preferred Stock, subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and American Stock
Transfer and Trust Company, as Rights Agent.
Initially, the Rights will be evidenced by the Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
and a Distribution Date will occur at the close of business on the earliest of
(i) the tenth day following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
outstanding shares of Common Stock (unless the person becomes the owner of 20%
solely by reason of share purchases by the Company, in which case the rights
will not detach unless such person becomes the beneficial owner of any
additional shares of the outstanding Common Stock) (the "Stock Acquisition
Date"), or (ii) the tenth business day (or such later date as may be determined
by action of the Board of Directors) following the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 20% or more of the outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued (whether upon
transfer or new issuance) after the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificate of Common Stock outstanding will also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 18, 2010, unless earlier redeemed by
the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
3
In the event that (i) the Company is the surviving corporation in a
merger or other business combination with an Acquiring Person (or any associate
or affiliate thereof) and its Common Stock remains outstanding and unchanged,
(ii) any person shall acquire beneficial ownership of more than 20% of the
outstanding shares of Common Stock (except pursuant to (A) certain
consolidations or mergers involving the Company or sales or transfers of the
combined assets, cash flow or earning power of the Company and its subsidiaries
or (B) an offer for all outstanding shares of Common Stock at a price and upon
terms and conditions which a majority of the Board of Directors determines to be
in the best interests of the Company and its stockholders), or (iii) there
occurs a reclassification of securities, a recapitalization of the Company or
any of certain business combinations or other transactions (other than certain
consolidations and mergers involving the Company and sales or transfers of the
combined assets, cash flow or earning power of the Company and its subsidiaries)
involving the Company or any of its subsidiaries which has the effect of
increasing by more than 1% the proportionate share of any class of the
outstanding equity securities of the Company or any of its subsidiaries
beneficially owned by an Acquiring Person (or any associate or affiliate
thereof), each holder of a Right (other than the Acquiring Person and certain
related parties) will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right. However, Rights are not exercisable following the occurrence of any of
the events set forth in this paragraph until such time as the Rights are no
longer redeemable by the Company as set forth below. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
For example, at an exercise price of $50.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties and transferees)
following either of the events set forth in the preceding paragraph would
entitle its holder to purchase $100.00 worth of Common Stock (or other
consideration, as noted above), determined pursuant to a formula set forth in
the Rights Agreement, for $50.00.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company shall enter into a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company is the surviving corporation in a consolidation, merger or similar
transaction pursuant to which all or part of the outstanding shares of Common
Stock are changed into or exchanged for stock or other securities of any other
person or cash or any other property or (iii) more than 50% of the combined
assets, cash flow or earning power of the Company and its subsidiaries is sold
or transferred (in each case other than certain consolidations with, mergers
with and into, or sales of assets, cash flow or earning power by or to
subsidiaries of the Company as specified in the Rights Agreement), each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the Purchase Price of the
Right. The events described in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
4
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness,
(excluding regular quarterly cash dividends), assets (other than dividends
payable in Preferred Stock) or of subscription rights or warrants (other than
those referred to in clause (ii) above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Preferred Stock are required to be issued (other
than fractions which are integral multiples of one one-hundredth (1/100th) of a
share of Preferred Stock) and, in lieu thereof, the Company may make an
adjustment in cash based on the market price of the Preferred Stock on the
trading date immediately prior to the date of exercise.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may,
without payment of the Purchase Price by the holder, exchange the Rights (other
than Rights owned by such person or group, which will become void), in whole or
in part, for shares of Common Stock at an exchange ratio of one share of Common
Stock (or in certain circumstances Preferred Stock) for which a Right is
exercisable immediately prior to the time of the Company's decision to exchange
the Rights (subject to adjustment).
At any time until ten (10) business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (payable in cash, shares of Common Stock or other
consideration deemed appropriate by the Board of Directors).
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $0.01 per Right redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Preferred Stock or Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth or in the
event that the Rights are redeemed.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date; provided that
any amendments after the Stock Acquisition Date must be approved by a majority
of the entire Board of Directors. After the
5
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable; and, provided, that any amendments after the Stock Acquisition Date
must be approved by a majority of the entire Board of Directors.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A filed
on December 18, 2000. A copy of the Rights Agreement is available free of charge
from the Rights Agent. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
6
EXHIBIT 4
NEWS RELEASE
FOR IMMEDIATE RELEASE
XXXXXXXX RESOURCES, INC. ADOPTS
STOCKHOLDER PROTECTION PLAN
FRISCO, TEXAS, DECEMBER 18, 2000 - Xxxxxxxx Resources, Inc. (NYSE:CRK), today
announced that its board of directors has adopted a stockholder protection plan
designed to assure that all Xxxxxxxx Resources stockholders receive fair and
equal treatment in the event of any takeover attempt. The stockholder protection
plan is effective on December 18, 2000, will replace a similar plan adopted in
1990, the rights under which will expire on December 18, 2000.
The timing and amount of shares purchased will depend on prevailing share market
prices and trading volume. Shares that are acquired through the repurchase plan
will be cancelled.
"As with the Xxxxxxxx Resources prior plan, the rights issued under this plan
are intended to enable all of the Company's stockholders to realize the
long-term value of their investment in the Company," stated M. Xxx Xxxxxxx,
President and Chief Executive Officer. "Although the rights do not prevent a
takeover, they should encourage anyone seeking to acquire Xxxxxxxx Resources
Inc. to negotiate with the Board prior to attempting such a takeover. The rights
also guard against partial tender offers and other abusive tactics. The Company
is not aware of any takeover attempt."
An overview of the plan is attached.
THIS PRESS RELEASE MAY CONTAIN "FORWARD-LOOKING STATEMENTS" AS THAT TERM IS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS
ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF
FACTORS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE DESCRIBED HEREIN. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS
IN SUCH STATEMENTS TO BE REASONABLE, THERE CAN BE NO ASSURANCE THAT SUCH
EXPECTATIONS WILL PROVE TO BE CORRECT.
XXXXXXXX RESOURCES, INC. IS A GROWING INDEPENDENT ENERGY COMPANY BASED IN
FRISCO, TEXAS AND IS ENGAGED IN OIL AND GAS ACQUISITIONS, EXPLORATION AND
DEVELOPMENT PRIMARILY IN TEXAS, LOUISIANA AND THE GULF OF MEXICO. THE COMPANY'S
STOCK IS TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL CRK.
XXXXXXXX RESOURCES STOCKHOLDER PROTECTION PLAN OVERVIEW
EFFECTIVE DECEMBER 18, 2000
The Board of Directors of Xxxxxxxx Resources, Inc. (the "Company") has declared
a dividend distribution of one preferred stock purchase right for each
outstanding share of the Company's common stock. Each right will entitle
stockholders to buy one one-hundredth of a share of the Company's Series B
Junior Participating Preferred Stock for each share of the Company's common
stock held, at a price of $50.00. The rights will be exercisable only if a
person or group of affiliated or associated persons acquires, or has announced
the intent to acquire, 20% or more of the Company's common stock.
The rights will provide for protection against self-dealing transactions by a
control stockholder. In case of an acquisition through a merger or other
business combination, the rights will entitle holders to purchase a number of
the acquiring company's common shares having the market value at that time of
twice the rights' exercise price. In the event of the acquisition or the
announcement of the intention to acquire 20% or more of the Company's common
stock, rights holders may, upon exercise, receive the Company's common shares
having a market value of two times the exercise price of the rights. Under
similar circumstances, the Board of Directors may exchange each right for shares
of the Company's common stock at an exchange ratio of one half the number of
shares of common stock (or in certain circumstances preferred stock) for which a
right is exercisable immediately prior to the time of the Company's decision to
exchange the rights.
The rights plan will not prevent tender offers or other takeover attempts.
However, it will enable stockholders to realize the long-term value of the
Company's common stock in the event of a takeover. It is the Company's belief
that the plan will cause anyone contemplating a takeover of the Company to first
discuss its plans with the Board of Directors.
The Company is entitled to redeem the rights in whole, but not in part, at a
price of $.01 per right at any time prior to the acquisition of 20% or more of
the Company's common stock.
The dividend distribution will be made on or about December 19, 2000 to
stockholders of record on December 18, 2000. The rights will be evidenced by,
and transferred with, the Company's common stock certificates until such time as
the acquisition of, or the announcement of the intention to acquire, 20% or more
of the Company's common stock. If either event were to occur, separate rights
certificates would be mailed to stockholders as soon as practicable.
EXHIBIT 4
NEWS RELEASE
FOR IMMEDIATE RELEASE
XXXXXXXX RESOURCES, INC. ADOPTS
STOCKHOLDER PROTECTION PLAN
FRISCO, TEXAS, DECEMBER 18, 2000 - Xxxxxxxx Resources, Inc. (NYSE:CRK), today
announced that its board of directors has adopted a stockholder protection plan
designed to assure that all Xxxxxxxx Resources stockholders receive fair and
equal treatment in the event of any takeover attempt. The stockholder protection
plan is similar to and will replace the Company's existing plan adopted in 1990,
the rights under which expire on December 18, 2000.
"As with the Xxxxxxxx Resources prior plan, the rights issued under this plan
are intended to enable all of the Company's stockholders to realize the
long-term value of their investment in the Company," stated M. Xxx Xxxxxxx,
President and Chief Executive Officer. "Although the rights do not prevent a
takeover, they should encourage anyone seeking to acquire Xxxxxxxx Resources
Inc. to negotiate with the Board prior to attempting such a takeover. The rights
also guard against partial tender offers and other abusive tactics. The Company
is not aware of any takeover attempt."
An overview of the plan is attached.
THIS PRESS RELEASE MAY CONTAIN "FORWARD-LOOKING STATEMENTS" AS THAT TERM IS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS
ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF
FACTORS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE DESCRIBED HEREIN. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS
IN SUCH STATEMENTS TO BE REASONABLE, THERE CAN BE NO ASSURANCE THAT SUCH
EXPECTATIONS WILL PROVE TO BE CORRECT.
XXXXXXXX RESOURCES, INC. IS A GROWING INDEPENDENT ENERGY COMPANY BASED IN
FRISCO, TEXAS AND IS ENGAGED IN OIL AND GAS ACQUISITIONS, EXPLORATION AND
DEVELOPMENT PRIMARILY IN TEXAS, LOUISIANA AND THE GULF OF MEXICO. THE COMPANY'S
STOCK IS TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL CRK.
XXXXXXXX RESOURCES STOCKHOLDER PROTECTION PLAN OVERVIEW
EFFECTIVE DECEMBER 18, 2000
The Board of Directors of Xxxxxxxx Resources, Inc. (the "Company") has declared
a dividend distribution of one preferred stock purchase right for each
outstanding share of the Company's common stock. Each right will entitle
stockholders to buy one one-hundredth of a share of the Company's Series B
Junior Participating Preferred Stock for each share of the Company's common
stock held, at a price of $50.00. The rights will be exercisable only if a
person or group of affiliated or associated persons acquires, or has announced
the intent to acquire, 20% or more of the Company's common stock.
The rights will provide for protection against self-dealing transactions by a
control stockholder. In case of an acquisition through a merger or other
business combination, the rights will entitle holders to purchase a number of
the acquiring company's common shares having the market value at that time of
twice the rights' exercise price. In the event of the acquisition or the
announcement of the intention to acquire 20% or more of the Company's common
stock, rights holders may, upon exercise, receive the Company's common shares
having a market value of two times the exercise price of the rights. Under
similar circumstances, the Board of Directors may exchange each right for shares
of the Company's common stock at an exchange ratio of one share of common stock
(or in certain circumstances preferred stock) for which a right is exercisable
immediately prior to the time of the Company's decision to exchange the rights.
The rights plan will not prevent tender offers or other takeover attempts.
However, it will enable stockholders to realize the long-term value of the
Company's common stock in the event of a takeover. It is the Company's belief
that the plan will cause anyone contemplating a takeover of the Company to first
discuss its plans with the Board of Directors.
The Company is entitled to redeem the rights in whole, but not in part, at a
price of $.01 per right at any time prior to the acquisition of 20% or more of
the Company's common stock.
The dividend distribution will be made on or about December 19, 2000 to
stockholders of record on December 18, 2000. The rights will be evidenced by,
and transferred with, the Company's common stock certificates until such time as
the acquisition of, or the announcement of the intention to acquire, 20% or more
of the Company's common stock. If either event were to occur, separate rights
certificates would be mailed to stockholders as soon as practicable.
