QUESTAR CORPORATION
and
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Rights Agreement
Dated as of February 13, 1996
TABLE OF CONTENTS
Section Page
1. Certain Definitions
2. Appointment of Rights Agent
3. Issue of Rights Certificates
4. Form of Rights Certificates
5. Countersignature and Registration
6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights
8. Cancellation and Destruction of Rights
Certificates
9. Reservation and Availability of Common Stock
10. Common Stock Record Date
11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights
12. Certificate of Adjusted Purchase Price or
Number of Shares
13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power
14. Fractional Rights and Fractional Shares
15. Rights of Action
16. Agreement of Rights Holders
17. Rights Certificate Holder Not Deemed a
Stockholder
18. Concerning the Rights Agent
19. Merger or Consolidation or Change of Name
of Rights Agent
20. Duties of Rights Agent
21. Change of Rights Agent
22. Issuance of New Rights Certificates
23. Redemption and Termination
24. Notice of Certain Events
25. Notices
26. Supplements and Amendments
27. Successors
28. Determinations and Actions by the Board
of Directors, etc
29. Benefits of this Agreement
30. Severability
31. Governing Law
32. Counterparts
33. Descriptive Headings
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of February 13, 1996 (the
"Agreement"), between Questar Corporation, a Utah corporation (the
"Company"), and Chemical Mellon Shareholder Services, L.L.C., a New
Jersey Limited Liability Company, as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on February 13, 1996, the Board of Directors of the
Company authorized and declared a dividend distribution of one Right (as
such term is hereinafter defined) for each share of common stock,
without par value, of the Company (the "Common Stock") outstanding at
the close of business on March 25, 1996 (the "Record Date"), and has
authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(p) hereof) 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 (as such term is defined in Section 3 hereof) and,
in certain circumstances, as provided in Section 22 hereof, each Right
initially representing the right to purchase one share of Common Stock
upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or employee
stock plan of the Company, or of any Subsidiary of the Company, (iv) any
Person or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan or (vi) any such Person who
has reported or is required to report such ownership (but less than 20%)
on Schedule 13G under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (or any comparable or successor report) or on
Schedule 13D under the Exchange Act (or any comparable or successor
report) which Schedule 13D does not state any intention to or reserve
the right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of such
Schedule (other than the disposition of the Common Stock) and, within 10
Business Days of being requested by the Company to advise it regarding
the same, certifies to the Company that such Person acquired shares of
Common Stock in excess of 14.9% inadvertently or without knowledge of
the terms of the Rights and who, together with all Affiliates and
Associates, thereafter does not acquire additional shares of Common
Stock while the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding; provided, however, that if the Person requested
to so certify fails to do so within 10 Business Days, then such Person
shall become an Acquiring Person immediately after such 10 Business Day
period.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act as in effect on the date of
this Agreement.
(c) A Person shall be deemed the "Benefi-cial 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 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) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original
Rights;
(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 "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 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 (c)) or disposing of
any voting securities of the Company; provided, however, that
nothing in this paragraph (c) 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 days after
the date of such acquisition.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock,
without par value, 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.
(g) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a member of
the Board, who is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or a representative of an Acquiring Person or of
any such Affiliate or Associate, and was a member of the Board prior to
the date of this Agreement, or (ii) any Person who subsequently becomes
a member of the Board, while such Person is a member of the Board, who
is not an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or
election to the Board is recommended or approved by a majority of the
Continuing Directors.
(h) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(i) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii)(A) or (B) hereof.
(j) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(k) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(l) "Subsidiary" shall mean, with reference to any
other Person, any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
(m) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event hereof.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Common Stock)
in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates. (a)Until the
earlier of (i) the close of business on the tenth day after the Stock
Acquisition Date (or, if the tenth 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 of Directors of the Company may determine) 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 or
employee stock 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 15%
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). As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or instruct the Rights
Agent to send by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of
the Company, one or more right certificates, in substantially the form
of Exhibit A 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(1)
or 11(p) hereof, at the time of distribution of the Right Certificates,
the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) 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) At the request of any holder of Common Stock, the
Company will send a copy of a Summary of Rights, in substantially the
form attached hereto an Exhibit B (the "Summary of Rights"), by
first-class, postage prepaid mail, to such holder at the address of such
holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the
Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration
Date (as such term is defined in Section 7 hereof), 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.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or delivered
from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date or, in certain
circumstances provided for in Section 22 hereof, after the Distribution
Date. Certificates issued after the Record Date but prior to the
earlier of the Distribu tion Date or the Expiration Date upon the
transfer or new issuance of shares of Common Stock shall also be deemed
to be certificates for Rights, and shall bear the following legend or
such similar legend as the Company may deem appropriate:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Questar Corporation and Chemical Mellon Shareholder
Services, L.L.C., dated as of February 13, 1996 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which in on file at the principal offices
of Questar Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
The Rights will expire on the close of business on March 25, 2006
unless redeemed prior thereto. Questar Corporation 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
Affiliates or Associates thereof (as such terms are defined in the
Rights Agreement), whether then held by or on behalf of such Person
or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the registered holders
of the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) 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 A 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
to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, 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 shares of Common Stock as
shall be set forth therein at the price per share set forth therein (the
"Purchase Price"), but the number of shares purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof 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 of
Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof 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). Accordingly, this
Rights Certificate and the Rights represented hereby may become
void in the circumstances specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration. (a) The
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 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 Certificate 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) 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
Certificate number of the Rights Certificate, 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) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase
(or receive) a like number of shares of Common Stock (or, following a
Triggering Event, 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 set forth on the reverse side of
each 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 hereof, 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) 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) Subject to Section 7(e) hereof, 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), Section 11(a)(iii) and Section 23(a) hereof) 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 set forth on the
reverse side thereof and the certificate contained therein duly
executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with payment of the
Purchase Price with respect to each surrendered Right for the total
number of shares (or other securities or property, as the case may be)
as to which such surrendered Rights are exercisable, at or prior to the
earlier of (i) the close of business on March 25, 2006 (the "Final
Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the earlier of (i) or (ii) being herein
referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $175, and shall
be subject to adjustment from time to time as provided in Section 11 and
Section 13 hereof and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase set forth on
the reverse side thereof and the certificate contained therein duly
executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price for the shares (or other shares,
securities or property, as the case may be) to be purchased as set forth
below and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Common Stock (or
make available, if the Rights Agent is the transfer agent for the Common
Stock) certificates for the total number of shares of Common Stock to be
purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests subject to applicable law, or (B)
if the Company shall have elected to deposit the total number of shares
of Common Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary
receipts representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common 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 of
Common Stock in accordance with Section 14 hereof, (iii) after receipt
of such certificates or depositary receipts for shares of Common Stock,
cause the same to be 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, 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 cash or by certified bank check or money order 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 other property are available for distribution by
the Rights Agent, if and when appropriate.
(d) 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 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
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 such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person
or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e), shall
become 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 insure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with but shall have no
liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to 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.
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 cancelled form, or, if surrendered
to the Rights Agent, shall be cancelled 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 cancelled Rights
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Common
Stock (and, following the occurrence of a Triggering Event, other
securities) or shares of Common Stock (and, following the occurrence of
a Triggering Event, other securities) held in its treasury, the number
of shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) that, except as provided this Agreement,
including in Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities)
issuable and deliverable upon the exercise of the Rights may be listed
on any national securities exchange or quoted on the NASDAQ stock
market, the Company shall use its reasonable 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 so quoted upon
official notice of issuance upon such exercise.
(c) The Company shall use its reasonable efforts to
(i) file, as soon as practicable following the earliest date after the
first occurrence of a Section 11(a)(ii) 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) hereof, or an soon as
is required by law or regulation following the Distribution Date, as the
case may be, a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Common Stock or
other securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the earlier
of (A) the date as of which the rights are no longer exercisable for
such securities, and (B) the date of the expiration of the Rights. 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)
days after the date set forth in clause (i) of the first sentence of
this Section 9(c)(i), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such 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) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of Common
Stock (and, following the occurrence of a Triggering Event, 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) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state to transfer
taxes and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for shares
of Common Stock (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 the shares of Common Stock (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 shares of Common
Stock (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 Certificates at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each person in
whose name any certificate for shares of Common Stock (or other
securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of
the shares of Common Stock (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, 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 Common Stock (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 on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Stock (or other securities, as the case
may be) transfer books of the Company are open. Prior to the exercise
of the Rights 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, is provided in this Section 11.
(a)(i) In the event the Company shall at any time after
the Distribution Date (A) declare a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding
Common Stock, (C) combine the outstanding Common Stock into a
smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares
of Common 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 Purchase Price then in effect, the aggregate
number and kind of shares of Common 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 Common Stock (or other
capital stock, as the case may be) transfer books of the Company
were open, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, 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) hereof.
(ii) In the event:
(A) 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
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan or employee
stock 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 become the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, other than pursuant to any transaction set forth in
Section 13(a) hereof, and except pursuant to a cash tender offer
made pursuant to a Schedule 14D-1 (or any successor form) filed
with the Securities and Exchange Commission for all outstanding
shares of Common Stock not beneficially owned by the Person making
such offer (or by its Affiliates or Associates) at a price and on
terms determined by a majority of the Continuing Directors, after
receiving the advice from one or more investment banking firms, to
be (a) fair to the Company's stockholders (other than the Person or
any Affiliate or Associate thereof on whose behalf the offer is
being made), after taking into account all factors which such
members of the Board deem 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 interest of the Company and
its stockholders (other than the Person or any Affiliate or
Associate thereof on whose behalf the offer is being made),
then promptly following ten (10) days after the date of the occurrence
of an event described in Section 11(a)(ii)(B) hereof and promptly
following the occurrence of any event described in Section 11(a)(ii)(A)
hereof, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of shares of Common Stock for which a Right was
exercisable by such holder immediately prior to the first occurrence of
a Section 11(a)(ii) Event, and dividing that product (such product,
following such first occurrence, shall be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by (y) 50%
of the current market price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date of such first occurrence
(such number of shares is herein called the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights 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, 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 of Directors of the Company, based on the advice of a
nationally recognized investment banking firm, has deemed to have
the same value as shares of Common Stock (such shares of preferred
stock, 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, where such
aggregate value has been determined by the Board of Directors of
the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the first occurrence of a Section
11(a)(ii) Event, 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 in the
aggregate are equal to the Spread. If the Board of Directors of
the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days following the first occurrence
of a Section 11(a)(ii) Event, in order that the Company may seek
shareholder approval for the authorization of such additional
shares (such period, as it may be extended, 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) hereof, that such action shall apply uniformly to
all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such 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 (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the date of the first occurrence of a
Section 11(a)(ii) Event and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common
Stock on such date.
(b) In case the Company shall fix a record date for
the issuance of rights (other than the Rights), options or warrants to
all holders of Common Stock entitling them to subscribe for or purchase
(for a period expiring within forty-five (45) calendar days after such
record date) Common Stock, shares having the same rights, privileges and
preference as the Common Stock ("equivalent Common Stock") or securities
convertible into Common Stock or equivalent Common Stock at a price per
share of Common Stock or equivalent Common Stock (or having a conversion
price per share, if a security convertible into Common Stock or
equivalent Common Stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of Common 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 Common Stock
outstanding on such record date, plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares
of Common Stock and/or equivalent Common 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 Common Stock
outstanding on such record date, plus the number of additional shares of
Common Stock and/or equivalent Common 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 an
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the
Rights. Shares of Common 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.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing 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 Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Common Stock
on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a
share of Common Stock and the denominator of which shall be such current
market price (as determined pursuant to Section 11(d) hereof) per share
of Common Stock. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase
Price which would have been in effect if such record date had not been
fixed.
(d) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)(A) hereof,
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 (as such
term is hereinafter defined) immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof, 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 then
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 (i) any 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 (ii) 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 expiration 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 day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national Securities
exchange, the last quoted sale price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use,
or, if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the
Board of Directors of the Company shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, a Business Day. If the 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 of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) 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 shall be made to the nearest cent
or to the nearest ten-thousandth of a share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of
(i) three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Common 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 Common Stock contained in Sections 11(a),
(b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the
number (or fraction) of shares of Common Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its
election an provided in Section 11(i), upon each adjustment of the
Purchase Price and a result of the calculations made in Sections 11(b)
and (c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of shares of Common Stock
(calculated to the nearest one-ten-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number (or fraction) of shares of
Common 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 (or fraction) of shares of Common Stock for
which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after 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) days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates hold
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) Irrespective of any adjustment or change in the
Purchase Price or the number (or fraction) of shares of Common Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per share and the number of shares which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value of the
shares of Common Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until
the occurrence of such event the issuance to the holder of any Right
exercised after such record date the shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the shares of Common Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares of Common Stock and other capital stock
or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors of the Company shall determine to
be advisable in order that any (i) consolidation or subdivision of the
Common Stock, (ii) issuance for cash of any shares of Common Stock at
less than the current market price, (iii) issuance for cash of shares of
Common Stock or securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Common Stock shall not
be taxable to such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger 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 or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Record 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 the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares,
the Purchase Price associated with each Right (whether issued or
delivered thereafter but prior to the Distribution Date) shall be
proportionately adjusted so that the Purchase Price of each Right
thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the Purchase Price
associated with each Right 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.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in Section
11 and Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the Rights
Agent, and with each transfer agent for the Common Stock, a copy of such
certificate, and (c) if deemed appropriate by the Company, mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 25 hereof. 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) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person, and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person shall consolidate with, or merge
with or into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection
with such consolidation or merger, 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), then,
and in each such case (except an may be contemplated by Section 13(d)
hereof), proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have
the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and
freely tradeable shares of common stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by
the number of shares of Common Stock for which a Right is exercisable by
such holder immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the
Section 13(a) Event, multiplying the Purchase Price in effect
immediately prior to this first occurrence of such event set forth in
Section 11(a)(ii)(A) or (B) by the number of shares of Common Stock for
which a Right was exercisable immediately prior to such first
occurrence) and dividing that product (such product, following the first
occurrence of a Section 13(a) Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement)
by (2) 50% of the current market price (determined pursuant to Section
11(d) hereof with respect to the Common Stock) per share of the common
stock of such Principal Party on the date of consummation of the Section
13(a) Event; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (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) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that
is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
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 common stock having the greatest aggregate market
value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall
have a sufficient number of autho-rized shares of its common stock which
have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of
this Section 13, the Principal Party will:
(i) prepare and file a registration statement
under the Securities 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 Securities
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 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of
a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described
in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a cash tender offer for all outstanding shares of Common
Stock which complies with the provisions of Section 11(a)(ii)(B) hereof
(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 holders of shares of
Common Stock whose shares were purchased pursuant to such tender offer,
and (iii) the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender 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)The
Company shall not be required to issue fractions of Rights 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 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 day shall be the last
sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights the
fair value of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of 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 share of Common Stock.
For purposes of this Section 14(b), the current market value of one
share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to of Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right.
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 own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such 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 in 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 duly completed and executed in a form reasonably acceptable
to the Rights Agent; and
(c) subject to Section 6(a) and Section 7(f) hereof,
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 shall, subject to the last sentence of
Section 7(e) hereof, be required to 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 reasonable 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 shares of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any
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 24
hereof), 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)The
Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon any 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.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the
Rights Agent or any successor Rights Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the 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) 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) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it reasonably 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 Chairman of the Board, the President, the Vice President and
Chief Financial Officer, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the 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) 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 thereof); 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 or Section 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by 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 other securities to be
issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, the Vice
President and Chief Financial Officer, the Secretary or the Treasurer of
the Company or any designee of any of the foregoing, and to apply to
such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or' agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) 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) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of election
to purchase set forth on the reverse thereof, as the case may be, has
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 of 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) days' notice in writing mailed to
the Company, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the 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) 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 any registered holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate or
the Rights Agent may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United
States or of the States of New York or Utah (or of any other state of
the United States so long as such corporation is authorized to do
business in the States of New York or Utah), in good standing, having a
principal office in the States of New York or Utah, which is authorized
under such laws to exercise corporate trust or stock transfer powers and
is subject to supervision or examination by federal or state authority
and which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000 or (b) an affiliate of any
such corporation described in clause (a) above. After appointment, the
successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, 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, however, or any defect
therein, shall not affect the legality or validity of the Rights, the
Rights Agreement or 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 its
Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or
property purchasable under the 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 granted or awarded as of the Distribution
Date, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the
Company, 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)The Board
of Directors of the Company may, at its option, at any time prior to
5:00 P.M., New York City time, on the earlier of (i) the close of
business on the tenth 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 day following the Record Date), or
(ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, an such
amount shall be appropriately adjusted to reflect any stock split, stock
dividend or similar trans-action occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence
of a Section 11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, evidence
of which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last
address as it appears 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.
Section 24. Notice of Certain Events. (a) 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 Common
Stock or to make any other distribution to the holders of Common Stock
(other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to affect any
reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common Stock),
or (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or series of
related transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other
Person, or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible, and in
accordance with Section 25 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock, if
any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least twenty
(20) days prior to the record date for determining holders of the shares
of Common Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by the
holders of the shares of Common Stock, whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, the Company shall
as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible, in accordance with Section 25
hereof, 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) hereof.
Section 25. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the holder
of any Rights Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as
follows:
Questar Corporation
000 Xxxx Xxxxx Xxxxx Xxxxxx
X.X. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of
any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with
the Company) as follows:
Chemical Mellon Shareholder Services, L.L.C.
000 Xxxxx Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
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 26. Supplements and Amendments. Prior to the
Distribution Date, 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. From and after the Distribution Date and subject to
the next to last sentence of this Section 26, 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 change or supplement the
provisions hereunder in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); or (iv) to shorten or
lengthen any time period hereunder; provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iv) 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 (other than as Acquiring Person and its Affiliates and
Associates). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding
anything in this Agreement to the contrary, following the Distribution
Date, no supplement or amendment shall be made which changes the
Purchase Price or the number of shares of Common Stock for which a Right
is exercisable. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 27. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors
and assigns here-under.
Section 28. 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-3d(l)(i) of the General Rules and Regulations under the Exchange Act
as in effect as of the date hereof. The Board of Directors of the
Company (and, where specifically provided for herein, the Continuing
Directors) shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically
granted to the Board or the Company (or, where specifically provided for
herein, the Continuing Directors), 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 (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board (or, where specifically
provided for herein, the Continuing Directors) in good faith, shall (i)
be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (ii) not subject the
Board or the Continuing Directors to any liability to the holders of the
Rights Certificates.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the 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 30. 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 invalidated; provided, however,
that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire
until the close of business on the tenth day following the date of such
determination by the Board of Directors. Without limiting the
foregoing, if any provision requiring that a determination be made by
less than the entire Board (or at a time or with the concurrence of a
group of directors consisting of less than the entire Board) is held by
a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, such determination shall then be made by the Board in
accordance with applicable law and the Company's Restated Articles of
Incorporation and By-laws.
Section 31. 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 Utah 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, except that the rights and obligations of the Rights Agent
shall be governed by the laws of the State of New York.
Section 32. 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 33. 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: QUESTAR CORPORATION
By /s/Xxxxxx X. Xxxxxxxx By /s/R. D. Cash
Name: Xxxxxx X. Xxxxxxxx Name: R. D. Cash
Title: Corporate Secretary Title: Chairman,
President and C.E.O.
Attest: CHEMICAL MELLON
SHAREHOLDER SERVICES, L.L.C.
By /s/Xxxxxxx X. Xxxxxxxxx By /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President Title: Vice President
Exhibit A
[Form of Rights Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER MARCH 26, 2006 OR EARLIER IF REDEEMED BY TEE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF TEE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN TEE RIGHTS
AGREEMENT (AS DEFINED HEREIN). UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY 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 RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(a) OF THE RIGHTS AGREEMENT.] 1/
1/ The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Right Certificate
QUESTAR CORPORATION
This certifies that , or registered
assigns, is the registered holder 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 February 13, 1996 (the "Rights
Agreement"), between Questar Corporation, a Utah corporation (the "Company"),
and Chemical Mellon Shareholder Services, L.L.C., a New Jersey Limited
Liability Company (the "Rights Agent"), to purchase from the Company at any
time prior to 5:00 PM (New York City time) on March 25, 2006 at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one fully paid and non-assessable share of common stock, without
par value (the "Common Stock"), of the Company, at a purchase price of $175
per share (the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase set forth on the
reverse hereof and the Certificate contained therein duly executed. The
Purchase Price shall be paid in cash. The number of Rights evidenced by this
Rights Certificate, the number of shares of Common Stock which may be
purchased upon exercise thereof and the Purchase Price per share of Common
Stock, set forth above, are the number of Rights, number of shares of Common
Stock and Purchase Price as of March 25, 1996, based on the Common Stock as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) 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 Affiliate
or Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any rights
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Common 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.
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 Company 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 Company.
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 shares of Common
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 not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Board of Directors of the
Company at its option at a redemption price of $.01 per Right at any time
prior to the earlier of the close of business on (i) the tenth day following
the Stock Acquisition Date (as such time period may be extended pursuant to
the Rights Agreement), and (ii) the Final Expiration Date.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the shares of
Common Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, 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.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of _________ __, ____
ATTEST:
By
Secretary Title:
Countersigned:
By
Authorized Signature
[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 Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: __________________, ____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
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);
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
NOTICE
The signatures 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 the registered holder desires to
exercise Rights represented by the Rights Certificates.)
To: QUESTAR CORPORATION:
The undersigned hereby irrevocably elects to exercise _________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of
the Company 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:
(Please print name and address)
Please insert social security
or other identifying number:
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 print name and address)
Please insert social security
or other identifying number:
Date: __________, ____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
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
NOTICE
The signatures 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.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On February 13 1996, the Board of Directors of Questar
Corporation, a Utah corporation (the "Company"), declared a dividend
distribution of one Right for each outstanding share of common stock, without
par value (the "Common Stock"), of the Company to stockholders of record at
the close of business on March 25, 1996 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one share of
Common Stock at a price of $175 (the "Purchase Price"), subject to adjustment
in certain circumstances. The Purchase Price shall be paid in cash. The
description and terms of the Rights are set forth in a Rights Agreement, dated
as of February 13, 1996 (the "Rights Agreement"), between the Company and
Chemical Mellon Shareholder Services, L.L.C., as Rights Agent.
Initially, the Rights will be attached to the certificates
representing outstanding shares of Common Stock, and no separate certificates
evidencing the Rights (the "Rights Certificates") will be distributed. Until
the earlier to occur of (i) ten (10) days 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 15% or
more of the outstanding shares of Common Stock (the "Stock Acquisition Date"),
or (ii) ten (10) business days (or such later date as the Board of Directors
may determine) following the commencement of (or public announcement of the
intent to commence) a tender offer or exchange offer by any person or group if
upon consummation thereof, such person or group would be the beneficial owner
of 15% or more of the outstanding shares of Common Stock (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificates. The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred with and only with
Common Stock certificates. From the Record Date until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Stock
certificates issued upon transfer or new issuance of the Common Stock will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
transfer of any certificate for Common Stock will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, Right
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on March 25, 2006, unless earlier
redeemed by the Company as described below.
In the event that (i) the Company is the,surviving corporation in
a merger or consolidation with an Acquiring Person and the Common Stock is not
changed or exchanged, or (ii) a person or group (other than the Company and
its affiliates) becomes the beneficial owner of more than 15% of the then
outstanding shares of Common Stock (except pursuant to a cash tender offer for
all outstanding shares of Common Stock at a price and on terms which a
majority of the Continuing Directors (as defined below) determine to be fair
to, and in the best interests of, the Company and its stockholders, other than
such person, its affiliates and associates), the Rights Agreement provides
that proper provision shall be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two (2) times the exercise price of the
Right. However, Rights are not exercisable following the occurrence of either
of the events set forth above 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, any Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person shall
immediately become null and void.
In the event that following the Distribution Date, (i) the Company
engages in a merger or consolidation in which the Company is not the surviving
corporation, (ii) the Company engages in a merger or consolidation with
another person in which the Company is the surviving corporation, but in which
all or part of its Common Stock is changed or exchanged, or (iii) 50% or more
of the Company's assets, cash flow or earning power is sold or transferred,
the Rights Agreement provides that proper provision shall be made so that each
holder of a Right shall thereafter have the right to receive, upon the
exercise thereof, common stock of the acquiring company having a value equal
to two (2) times the exercise price of the Right. Notwithstanding the
foregoing, no adjustment to the Rights shall be made if, among other things,
such transaction is consummated with a Person who acquired shares of Common
Stock pursuant to a cash tender offer approved by a majority of the Continuing
Directors as referred to in the preceding paragraph and if the price offered
in such transaction is not less than the price paid pursuant to such offer.
The events set forth in this paragraph and in the preceding paragraph are
referred to as the "Triggering Events."
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member
of the Board prior to the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person's nomination or election is
recommended or approved by a majority of the Continuing Directors, but shall
not include an Acquiring Person, an affiliate or associate of an Acquiring
Person, or a representative of an Acquiring Person or of any such affiliate or
associate.
The Purchase Price payable, and the number of shares of Common
Stock issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or
a subdivision, combination or reclassification of, the Common Stock, (ii) upon
the grant to holders of the Common Stock of certain rights or warrants to
subscribe for Common Stock or securities convertible into Common Stock at less
than the current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional shares of Common Stock will be issued
upon exercise of the Rights and, in lieu thereof, a cash payment will be made
based on the market price of the Common Stock on the last trading date prior
to the date of exercise.
At any time after the date of the Rights Agreement until ten (10)
days following the Stock Acquisition Date or the Record Date, whichever is
later, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, an 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 Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date.
Thereafter, the provisions, other than certain provisions relating to the
principal economic terms of the Rights, of the Rights Agreement may be amended
by the Board: to cure any ambiguity, defect or inconsistency; to shorten or
lengthen any time period under the Rights Agreement; or in any other respect
that will not adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person); provided that no amendment to adjust
the time period governing redemption shall be made at such time as the Rights
are not redeemable.
A copy of the Rights Agreement will be filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement of the
Company on Form 8-A. A copy of the Rights Agreement is available free of
charge from the Company upon written request therefor. 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.
