RIGHTS AGREEMENT
dated as of
November 13, 1998
between
McMoRan Exploration Co.
and
Mellon Securities Trust Company,
as Rights Agent
Table of Contents
Page
Section 1. Definitions. . . . . . . . . . . . . . . . . . . . .1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . .5
Section 3. Issue of Right Certificates. . . . . . . . . . . . .6
Section 4. Form of Right Certificates . . . . . . . . . . . . .7
Section 5. Countersignature and Registration. . . . . . . . . .7
Section 6. Transfer and Exchange of Right
Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates . . . . . . . .8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . .9
Section 8. Cancellation and Destruction of Right
Certificates. . . . . . . . . . . . . . . . . . 10
Section 9. Reservation and Availability of
Capital Stock . . . . . . . . . . . . . . . . . 11
Section 10. Preferred Stock Record Date . . . . . . . . . . . 12
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares
or Number of Rights . . . . . . . . . . . . . . 12
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares . . . . . . . . . . . 21
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power . . . . . . 21
Section 14. Fractional Rights and Fractional
Shares. . . . . . . . . . . . . . . . . . . . . 24
Section 15. Rights of Action. . . . . . . . . . . . . . . . . 25
Section 16. Agreement of Right Holders. . . . . . . . . . . . 25
Section 17. Right Certificate Holder Not
Deemed a Stockholder. . . . . . . . . . . . . . 26
Section 18. Concerning the Rights Agent . . . . . . . . . . . 26
Section 19. Merger or Consolidation or Change
of Name of Rights Agents. . . . . . . . . . . . 27
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . 28
Section 21. Change of Rights Agent. . . . . . . . . . . . . . 30
Section 22. Issuance of New Right Certificates. . . . . . . . 31
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . 31
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . 32
Section 25. Notice of Proposed Actions. . . . . . . . . . . . 33
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . 34
Section 27. Supplements and Amendments. . . . . . . . . . . . 34
Section 28. Successors. . . . . . . . . . . . . . . . . . . . 35
Section 29. Determinations and Actions by
the Board, etc. . . . . . . . . . . . . . . . . 35
Section 30. Benefits of this Agreement. . . . . . . . . . . . 35
Section 31. Severability. . . . . . . . . . . . . . . . . . . 35
Section 32. Governing Law . . . . . . . . . . . . . . . . . . 35
Section 33. Counterparts. . . . . . . . . . . . . . . . . . . 35
Section 34. Descriptive Headings. . . . . . . . . . . . . . . 36
Exhibit A Form of Certificate of Designation of Preferred Stock
Exhibit B Form of Right Certificate
Exhibit C Summary Description of the Stockholder Rights Plan
RIGHTS AGREEMENT
AGREEMENT dated as of November 13, 1998 between McMoRan
Exploration Co., a Delaware corporation (the "Company"), and
Mellon Securities Trust Company, as Rights Agent (the "Rights
Agent"),
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company authorized
and declared a dividend of one preferred stock purchase right (a
"Right") for each share of Common Stock (as hereinafter defined)
outstanding at the close of business on November 13, 1998 (the
"Record Date") and has authorized the issuance, upon the terms
and subject to the conditions hereinafter set forth, of one Right
(subject to adjustment) in respect of each share of Common Stock
issued after the Record Date, each Right representing the right
to purchase, upon the terms and subject to the conditions
hereinafter set forth, one one-hundredth (subject to adjustment)
of a share of Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used
herein, have the following meanings:
"Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, shall be the Beneficial
Owner of the Threshold Percentage or more of the shares of Common
Stock then outstanding, but shall not include an Exempt Person;
provided, however, that (a) if the Board determines in good faith
that a Person who would otherwise be an "Acquiring Person" became
the Beneficial Owner of a number of shares of Common Stock such
that the Person would otherwise qualify as an "Acquiring Person"
inadvertently (including, without limitation, because (i) such
Person was unaware that it beneficially owned a percentage of
Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of
its Beneficial Ownership of Common Stock but had no actual
knowledge of the consequences of such Beneficial Ownership under
this Agreement) and without any intention of changing or
influencing control of the Company, then such Person shall not be
deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement unless and until such Person shall
have failed to divest itself, as soon as practicable (as
determined, in good faith, by the Board of Directors of the
Company), of Beneficial Ownership of a sufficient number of
shares of Common Stock so that such Person would no longer
otherwise qualify as an "Acquiring Person"; and (b) no Person
shall become an "Acquiring Person" as the result of any
acquisition of shares of Common Stock by the Company which, by
reducing the number of shares of Common Stock outstanding,
increases the proportionate number of shares of Common Stock
beneficially owned by such Person to the Threshold Percentage or
more of the shares of Common Stock then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of
the Threshold Percentage or more of the shares of Common Stock
then outstanding by reason of such share acquisition by the
Company and shall thereafter become the Beneficial Owner of any
additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of
the outstanding Common Stock), then such Person shall be deemed
to be an "Acquiring Person" unless upon becoming the Beneficial
Owner of such additional shares of Common Stock such Person does
not beneficially own the Threshold Percentage or more of the
shares of Common Stock then outstanding.
"Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act as in
effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to have "Beneficial Ownership" of and to
"beneficially own", any securities:
(a) which such Person or any of its Affiliates or
Associates, directly or indirectly, beneficially owns (as
determined pursuant to Rule 13d-3 under the Exchange Act as in
effect on the date hereof);
(b) which such Person or any of its Affiliates or
Associates, directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant
to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters
and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", (A) securities tendered pursuant to
a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for
purchase, (B) securities which such Person has a right
to acquire upon the exercise of Rights at any time
prior to the time that any Person becomes an Acquiring
Person or (C) securities issuable upon the exercise of
Rights from and after the time that any Person becomes
an Acquiring Person if such Rights were acquired by
such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant
to Section 3(a) or Section 22 hereof ("Original
Rights") or pursuant to Section 11(i) or Section 11(p)
with respect to an adjustment to Original Rights; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant
to any agreement, arrangement or understanding (whether
or not in writing) or otherwise; provided that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", any security under this clause (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 or consent given in response to a
public proxy or consent solicitation made pursuant to
the applicable 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
(c) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) and
with respect to which such Person or any of its Affiliates or
Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in
subparagraph (b)(ii) immediately above) or disposing of any such
securities;
provided, however, that no Person who is an officer, director or
employee of an Exempt Person shall be deemed, solely by reason of
such Person's status or authority as such, to be the "Beneficial
Owner" of, to have "Beneficial Ownership" of or to "beneficially
own" any securities that are "beneficially owned", including,
without limitation, in a fiduciary capacity, by an Exempt Person
or by any other such officer, director or employee of an Exempt
Person.
"Board" means the Board of Directors of the Company.
"Business Day" means 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.
"Close of business" on any given date means 5:00 P.M., New
York City time, on such date; provided that if such date is not a
Business Day "close of business" means 5:00 P.M., New York City
time, on the next succeeding Business Day.
"Common Stock" means the Common Stock, par value $0.01 per
share, of the Company, except that, when used with reference to
any Person other than the Company, "Common Stock" means 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.
"Distribution Date" means the earlier of (a) the close of
business on the tenth day after the Stock Acquisition Date and
(b) the close of business on the tenth Business Day (or such
later day as may be designated prior to the occurrence of a
Section 11(a)(ii) Event by action of the Board) after the date of
the commencement of a tender or exchange offer by any Person if,
upon consummation thereof, such Person would be an Acquiring
Person; provided, however, that if either of such dates occurs
after the date of this Agreement and on or prior to the Record
Date, then the Distribution Date shall be the Record Date.
"Exempt Person" shall mean McMoRan Oil & Gas Co., Freeport-
McMoRan Sulphur Inc., the Company or any Subsidiary of the
Company, in each case including, without limitation, in its
fiduciary capacity, or any employee benefit plan of the Company
or of any Subsidiary of the Company, or any entity or trustee
holding Common Stock for or pursuant to the terms of any such
plan or for the purpose of funding any such plan or funding other
employee benefits for employees of the Company or of any
Subsidiary of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" means the earlier of (a) the Final
Expiration Date and (b) the time at which all Rights are redeemed
as provided in Section 23 or exchanged as provided in Section 24.
"Final Expiration Date" means the close of business on
November 13, 2008.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or any other entity or
organization.
"Preferred Stock" means the Series A Participating
Cumulative Preferred Stock, par value $0.01 per share, of the
Company, having the terms set forth in the form of certificate of
designation attached hereto as Exhibit A.
"Purchase Price" means the price (subject to adjustment as
provided herein) at which a holder of a Right may purchase one
one-hundredth of a share of Preferred Stock (subject to
adjustment as provided herein) upon exercise of a Right, which
price shall initially be $80.00.
"Section 11(a)(ii) Event" means any event described in the
first clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x),
(y) or (z) of Section 13(a).
"Securities Act" means the Securities Act of 1933, as
amended.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D
under the Exchange Act (or any comparable or successor report))
by the Company or an Acquiring Person indicating that an
Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which
securities or other ownership interests having ordinary voting
power, in the absence of contingencies, to elect a majority of
the board of directors or other Persons performing similar
functions are at the time directly or indirectly owned by such
first Person.
"Threshold Percentage" means (i) 20% with respect to Alpine
Capital, L.P., Xxxxxx X. Xxxxx III, Algenpar, Inc., X. Xxxxxx
Xxxxxxxx, Keystone, Inc., Xxxxxx X. Xxxx and their respective
Affiliates and Associates and (ii) 15% with respect to any other
Person and its Affiliates and Associates.
"Trading Day" means 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.
"Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. If the Company appoints
one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall
determine.
Section 3. Issue of Right Certificates. (a) Prior to the
Distribution Date, (i)the Rights will be evidenced (subject to the
penultimate sentence of this Section 3(a)) by the certificates
for the Common Stock and not by separate Right Certificates (as
hereinafter defined) and the registered holders of the Common
Stock shall be deemed to be the registered holders of the
associated Rights, and (ii)the Rights will be transferable only in
connection with the transfer of the underlying shares of Common
Stock. As soon as practicable after the Record Date, the Company
will send a copy of the Summary of Rights substantially in the
form of Exhibit C hereto, by first-class, postage prepaid mail,
to each record holder of the Common Stock as of the close of
business on the Record Date at the address of such holder shown
on the records of the Company. Prior to the Distribution Date
(or, if earlier, the Expiration Date), the surrender for transfer
of any certificate for Common Stock outstanding on the Record
Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common
Stock represented thereby.
(b) As soon as practicable after the Company has notified
the Rights Agent of the occurrence of the Distribution Date, the
Rights Agent will send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date (other than any Acquiring
Person or any Affiliate or Associate thereof), at the address of
such holder shown on the records of the Company, one or more
Right Certificates evidencing one Right (subject to adjustment as
provided herein) for each share of Common Stock so held. If an
adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11 the Company shall, at the time
of distribution of the Right Certificates, make the necessary and
appropriate rounding adjustments (in accordance with Section
14(a) so that Right Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any
fractional Rights. From and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all shares of
Common Stock outstanding as of the Record Date or issued (on
original issuance or out of treasury) after the Record Date but
prior to the earlier of the Distribution Date and the Expiration
Date. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior
to the Expiration Date, the Company (i) shall, with respect to
shares of Common Stock so issued or sold (x) pursuant to the
exercise of stock options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of
other securities issued by the Company prior to the Distribution
Date and (ii) may, in any other case, if deemed necessary or
appropriate by the Board, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance
or sale; provided that no such Right Certificate shall be issued
if, and to the extent that, (i) the Company shall be advised by
counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to
whom such Right Certificate would be issued or (ii) appropriate
adjustment shall otherwise have been made in lieu of the issuance
thereof.
(d) Certificates issued for Common Stock after the Record
Date but prior to the earlier of the Distribution Date and the
Expiration Date shall have impressed on, printed on, written on
or otherwise affixed to them the following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between McMoRan Exploration Co. and Mellon
Securities Trust Company, as Rights Agent, dated as of November
13, 1998 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Corporation. The
Corporation will mail to the holder of this certificate a copy of
the Rights Agreement without charge promptly after receipt of a
written request therefor. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be evidenced by
separate certificates and no longer be evidenced by this
certificate, may be redeemed or exchanged or may expire. As set
forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person
or by any subsequent holder, may be null and void.
Section 4. Form of Right Certificates. The certificates
evidencing the Rights (and the forms of assignment, election to
purchase and certificates to be printed on the reverse thereof)
(the "Right Certificates") shall be substantially in the form of
Exhibit B 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, rule or regulation 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.
The Right Certificates, whenever distributed, shall be dated as
of the Record Date.
Section 5. Countersignature and Registration. (a) The
Right Certificates shall be executed on behalf of the Company by
either of its Co-Chairmen 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 Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company whose manual or facsimile signature is affixed to the
Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates may,
nevertheless, be countersigned by the Rights Agent and issued and
delivered with the same force and effect as though the Person who
signed such Right Certificates had not ceased to be such officer
of the Company. Any Right Certificate may be signed on behalf of
the Company by any Person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of
the Company to sign such Right Certificate, although at the date
of the execution of this Rights Agreement any such Person was not
such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the place for surrender of Right Certificates upon
exercise, transfer or exchange, books for registration and
transfer of the Right Certificates. Such books shall show with
respect to each Right Certificate the name and address of the
registered holder thereof, the number of Rights indicated on the
certificate and the certificate number.
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) At
any time after the Distribution Date and prior to the Expiration
Date, any Right Certificate or Certificates may, upon the terms
and subject to the conditions set forth in this Agreement, be
transferred or exchanged for another Right Certificate or
Certificates evidencing a like number of Rights as the Right
Certificate or Certificates surrendered. Any registered holder
desiring to transfer or exchange any Right Certificate or
Certificates shall surrender such Right Certificate or
Certificates (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly
executed) to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such
surrendered Right Certificate or Certificates until the
registered holder of the Rights has complied with the
requirements of Section 7(e). Upon satisfaction of the foregoing
requirements, the Rights Agent shall, subject to Sections 7(d),
14 and 24, countersign and deliver to the Person entitled thereto
a Right Certificate or Certificates as so requested. The Company
may require payment of a sum sufficient to cover any transfer tax
or other governmental charge that may be imposed in connection
with any transfer or exchange of any Right Certificate or
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will issue and deliver a new Right
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) The registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein, including Sections 7(d), 7(e), 9(c),
11(a), 23 and 24) in whole or in part at any time after the
Distribution Date and prior to the Expiration Date upon surrender
of the Right Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to
the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment (in
lawful money of the United States of America by certified check
or bank draft payable to the order of the Company) of the
aggregate Purchase Price with respect to the Rights then to be
exercised and an amount equal to any applicable transfer tax or
other governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a)
and subject to Section 20(k), the Rights Agent shall thereupon
promptly (i)(A) requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the transfer
agent therefor) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased (and
the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests) or (B) if the Company shall have
elected to deposit the shares of Preferred Stock issuable upon
exercise of the Rights with a depositary agent, requisition from
the depositary agent depositary receipts representing interests
in such number of one one-hundredths of a share of Preferred
Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and
the Company 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 issuance of fractional shares in
accordance with Section 14 and (iii) after receipt of such
certificates or depositary receipts and cash, if any, cause the
same to be delivered to or upon the order of the registered
holder of such Right Certificate (with such certificates or
receipts registered in such name or names as may be designated by
such holder). If the Company is obligated to deliver Common
Stock, other securities or assets pursuant to this Agreement, the
Company will make all arrangements necessary so that such other
securities and assets are available for delivery by the Rights
Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing the number of Rights remaining
unexercised shall be issued by the Rights Agent and delivered to,
or upon the order of, the registered holder of such Right
Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section
14.
(d) 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 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 (or any such Associate
or Affiliate) to holders of equity interests in such Acquiring
Person (or in any such Associate or Affiliate) or to any Person
with whom the Acquiring Person (or any such Associate or
Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which is part of a plan, arrangement or understanding which has
as a primary purpose or effect the avoidance of this Section 7(d)
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(d) 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 and Associates or any transferee of any of them
hereunder.
(e) 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 of Rights upon the occurrence of any purported transfer
pursuant to Section 6 or exercise pursuant to this Section 7
unless such registered holder (i) shall have completed and signed
the certificate contained in the form of assignment or election
to purchase, as the case may be, set forth on the reverse side of
the Right Certificate surrendered for such transfer or exercise,
as the case may be, (ii) shall not have indicated an affirmative
response to clause 1 or 2 thereof and (iii) 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.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for exercise,
transfer or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the
Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent
for cancellation, and the Rights Agent shall cancel, any other
Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available a number of shares of Preferred Stock
which are authorized but not outstanding or otherwise reserved
for issuance sufficient to permit the exercise in full of all
outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the
exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all
securities reserved for such issuance to be listed on any such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as
soon as practicable following the earliest date after the
occurrence of a Section 11(a)(ii) Event as of which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii),
or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become
effective as soon as practicable after such filing and (iii) to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the
securities or blue sky laws of the various states in connection
with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed 90 days
after the date set forth in clause 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. Notwithstanding any such
provision of this Agreement to the contrary, the Rights shall not
be exercisable for securities in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been
obtained, such exercise therefor shall not be permitted under
applicable law or a registration statement in respect of such
securities shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all one
one-hundredths of a share of Preferred Stock issuable upon
exercise of Rights shall, at the time of delivery of the
certificates for such securities (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 transfer
taxes and other governmental charges which may be payable in
respect of the issuance or delivery of the Right Certificates and
of any certificates for Preferred Stock upon the exercise of
Rights. The Company shall not, however, be required to pay any
transfer tax or other governmental charge which may be payable in
respect of any transfer involved in the issuance or delivery of
any Right Certificates or of any certificates for Preferred Stock
to a Person other than the registered holder of the applicable
Right Certificate, and prior to any such transfer, issuance or
delivery any such tax or other governmental charge shall have
been paid by the holder of such Right Certificate or it shall
have been established to the Company's satisfaction that no such
tax or other governmental charge is due.
Section 10. Preferred Stock Record Date. Each Person
(other than the Company) in whose name any certificate for
Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of
such Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any transfer taxes or other governmental
charges) was made; provided that if the date of such surrender
and payment is a date upon which the transfer books of the
Company relating to the Preferred Stock 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 applicable transfer books of the
Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled
to any rights of a stockholder of the Company with respect to
shares for which the Rights shall be exercisable, including 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. (a)(i) If the Company shall at
any time after the date of this Agreement (A) pay a dividend on
the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock into a greater number
of shares, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or
merger involving the Company), the Purchase Price in effect
immediately prior to the record date for such dividend or the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred
Stock or other capital stock issuable on such date shall be
proportionately adjusted so that each holder of a Right shall
(except as otherwise provided herein, including Section 7(d))
thereafter be entitled to receive, upon exercise thereof at the
Purchase Price in effect immediately prior to such date, the
aggregate number and kind of shares of Preferred Stock or other
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
applicable transfer books of the Company were open, such holder
would have been entitled to receive upon such exercise and by
virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which requires an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates
and Associates, shall, at any time after the date of this
Agreement, become an Acquiring Person, then each holder of a
Right shall (except as otherwise provided herein, including
Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event, in lieu of
Preferred Stock, such number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock of the
Company (such shares being referred to herein as the "Adjustment
Shares") as shall be equal to the result obtained by dividing
(x) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of
a Section 11(a)(ii) Event by the number of one
one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as the
"Purchase Price" for each Right) by
(y) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of Common Stock on
the date of such first occurrence;
provided, however, that the Purchase Price (as so adjusted
pursuant this clause (ii) and the number of Adjustment Shares so
receivable upon exercise of a Right shall, following the
occurrence of such Section 11(a)(ii) Event, be subject to further
adjustment as appropriate in accordance with Section 11(f). From
and after the occurrence of a Section 13 Event, any Rights that
theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock that are
authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance other than upon exercise of
the Rights is not sufficient to permit the exercise in full of
the Rights in accordance with Section 11(a)(ii), the Company
shall, with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the
Purchase Price then in effect, (A) (to the extent available)
Common Stock and then, (B) (to the extent available) such number
of one one-hundredths of a share of Preferred Stock as are then
equivalent in value to the value of the Adjustment Shares, and
then, if necessary, (C) other equity or debt securities of the
Company, cash or other assets, a reduction in the Purchase Price
or any combination of the foregoing, having an aggregate value
(based upon the advice of a nationally recognized investment
banking firm) equal to the value of the Adjustment Shares;
provided that (x) the Company may, and (y) if the Company shall
not have made adequate provision as required above to deliver
value within 30 days following the first occurrence of a Section
11(a)(ii) Event (the "Substitution Period"), then the Company
shall be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Purchase Price, (1)
(to the extent available) Common Stock and then (2) (to the
extent available) one-hundredths of a share of Preferred Stock
and then, if necessary, (3) other equity or debt securities of
the Company, cash or other assets or any combination of the
foregoing, having an aggregate value (based upon the advice of a
nationally recognized investment banking firm) equal to the
excess of the value of the Adjustment Shares over the Purchase
Price. To the extent that the Company determines that some
action is to be taken pursuant to the preceding sentence, the
Company (X) shall provide, subject to Section 7(d), 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 decide the
appropriate form and value of any consideration to be delivered
as referred to in the preceding sentence. If any such suspension
occurs, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the current
market price per share of Common Stock (as determined pursuant to
Section 11(d)) on the date of the first occurrence of a Section
11(a)(ii) Event; any common stock equivalent shall be deemed to
have the same value as the Common Stock on such date; and the
value of other securities or assets shall be determined pursuant
to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within 45 calendar days after such record date)
Preferred Stock (or securities having the same rights, privileges
and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into or exercisable
for Preferred Stock (or equivalent preferred stock) at a price
per share of Preferred Stock (or equivalent preferred stock) (in
each case, taking account of any conversion or exercise price)
less than the current market price (as determined pursuant to
Section 11(d)) per share of Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect
immediately prior to such date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of
Preferred Stock which the aggregate price (taking account of any
conversion or exercise price) of the total number of shares of
Preferred Stock (and/or equivalent preferred stock) so to be
offered would purchase at such current market price and the
denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of
additional shares of Preferred Stock (and/or equivalent preferred
stock) so to be offered. In case such subscription price may be
paid by delivery of consideration part or all of which shall be
in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. Shares of Preferred Stock
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and if such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock
(including any such distribution made in connection with a
consolidation or merger involving the Company) of evidences of
indebtedness, equity securities other than Preferred Stock,
assets (other than a regular periodic cash dividend out of the
earnings or retained earnings of the Company) or rights, options
or warrants (excluding those referred to in Section 11(b)), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of Preferred
Stock on such record date, less the value (as determined pursuant
to Section 11(d)(iii)) of such evidences of indebtedness, equity
securities, assets, rights, options or warrants so to be
distributed with respect to one share of Preferred Stock and the
denominator of which shall be such current market price per share
of Preferred Stock. Such adjustment shall be made successively
whenever such a record date is fixed, and if such distribution is
not so made, 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.
(d)(i) For the purpose of any computation hereunder other
than computations made pursuant to Section 11(a)(iii) or 14, 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 30 consecutive Trading Days
immediately prior to such date; for purposes of computations made
pursuant to Section 11(a)(iii), the "current market price" per
share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common
Stock for the 10 consecutive Trading Days immediately following
such date; and for purposes of computations made pursuant to
Section 14, the "current market price" per share of Common Stock
for any Trading Day shall be deemed to be the closing price per
share of Common Stock for such Trading Day; provided that if the
current market price per share of the Common Stock is determined
during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities exercisable
for or convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or reclassification
of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth
above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
"current 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, on the
principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or such other system then in use or, if on any such date the
shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board. 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 (or,
if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm) shall
be used. If the Common Stock is not publicly held or not so
listed or traded, the "current market price" per share means the
fair value per share as determined in good faith by the Board,
or, if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm, which
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the "current market price" per share of Preferred Stock
shall be determined in the same manner as set forth above
for the Common Stock in Section 11(d)(i) (other than the
last sentence thereof). If the current market price per
share of Preferred Stock cannot be determined in such
manner, the "current market price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the current
market price per share of Common Stock (as determined
pursuant to Section 11(d)(i) (other than the last sentence
thereof)). If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, the "current
market price" per share of the Preferred Stock shall be
determined in the same manner as set forth in the last
sentence of Section 11(d)(i). For all purposes of this
Agreement, the "current market price" of one one-hundredth
of a share of Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock divided by
100.
(iii) For the purpose of any computation hereunder, the
value of any securities or assets other than Common Stock or
Preferred Stock shall be the fair value as determined in
good faith by the Board, or, if at the time of such
determination there is an Acquiring Person, by a nationally
recognized investment banking firm which 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 1%
in the Purchase Price; provided 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
of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be.
(f) If at any time, as a result of an adjustment made
pursuant to Section 11(a)(ii) or Section 13(a), the holder of any
Right shall be entitled to receive upon exercise of such Right
any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Section 11(a), 11(b),
11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(m), and
the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made hereunder shall evidence the right to
purchase, at the Purchase Price then in effect, the then
applicable number of one one-hundredths of a share of Preferred
Stock and other capital stock of the Company issuable from time
to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(b) and
11(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 one one-hundredths
of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by multiplying (x) the number of one
one-hundredths of a share for which a Right was exercisable
immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price
and 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 lieu of any adjustment in the number of one one-hundredths of
a share of Preferred Stock issuable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which such 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 Right Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14,
the additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue
to express the Purchase Price per one one-hundredth of a share
and the number of shares which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the
number of one one-hundredths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-hundredths of
a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one
one-hundredths of a share of Preferred Stock or other capital
stock of the Company, if any, issuable upon such exercise over
and above the number of one one-hundredths of a share of
Preferred Stock or other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided 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
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it, in its sole discretion, shall determine to be
advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any Preferred Stock
at less than the current market price, issuance wholly for cash
of Preferred Stock or securities which by their terms are
convertible into or exercisable for Preferred Stock, stock
dividends or issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Company to the holders
of its Preferred Stock, shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it will not at any
time after the Distribution Date consolidate, merge or
otherwise combine with or sell or otherwise transfer (and/or
permit any of its Subsidiaries to sell or otherwise 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 if (x) at the time of or immediately
after such consolidation, merger, combination or sale there are
any rights, warrants or other instruments or securities
outstanding or any agreements or arrangements 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, combination or sale, the stockholders of a Person who
constitutes, or would constitute, the "Principal Party" for the
purposes of Section 13 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 Sections
23, 24 and 27, 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 substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, if at any time after the date hereof and prior to the
Distribution Date the Company shall pay a dividend on the
outstanding shares of Common Stock payable in shares of Common
Stock, subdivide the outstanding Common Stock into a larger
number of shares or combine the outstanding Common Stock into a
smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or
delivered thereafter as contemplated by Section 3(c), shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Sections 11 and 13, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate
and (c) mail 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
the manner set forth in Section 26. 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) If, following the occurrence of a
Section 11(a)(ii) Event, directly or indirectly,
(x) the Company shall consolidate with, merge into, or
otherwise combine with, any other Person, and the Company
shall not be the continuing or surviving corporation of such
consolidation, merger or combination,
(y) any Person shall merge into, or otherwise combine
with, the Company, and the Company shall be the continuing
or surviving corporation of such merger or combination and,
in connection with such merger or combination, all or part
of the outstanding shares of Common Stock shall be changed
into or exchanged for other stock or securities of the
Company or any other Person, cash or any other property, or
(z) the Company and/or one or more of its Subsidiaries
shall sell or otherwise 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,
then, and in each such case, proper provision shall promptly be
made so that
(i) each holder of a Right shall thereafter be entitled
to receive, upon exercise thereof at the Purchase Price in
effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event, such number of duly authorized,
validly issued, fully paid and nonassessable shares of
freely tradeable Common Stock of the Principal Party (as
hereinafter defined), not subject to any rights of call or
first refusal, liens, encumbrances or other claims, as shall
be equal to the result obtained by dividing
(A) the product obtained by multiplying the
Purchase Price in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the number
of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such
first occurrence (such product being thereafter
referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by
(B) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of the Common
Stock of such Principal Party on the date of
consummation of such consolidation, merger,
combination, sale or transfer;
provided, however, that the Purchase Price (as so adjusted
pursuant to the foregoing clause (i)(A)) and the number of shares
of Common Stock of such Principal Party so receivable upon
exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(f) to reflect any
events occurring in respect of the Common Stock of such Principal
Party after the occurrence of such consolidation, merger, sale or
transfer;
(ii) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger,
combination, sale or transfer, 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 shall apply only
to such Principal Party following the first occurrence of a
Section 13 Event; and
(iv) such Principal Party shall take such steps
(including the authorization and reservation of a sufficient
number of shares of its Common Stock to permit exercise of
all outstanding Rights in accordance with this Section
13(a)) 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 the shares of its
Common Stock thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section
13(a)(x) or (y), the Person that is the issuer of any
securities into which shares of Common Stock of the Company
are converted in such merger, consolidation or combination,
and if no securities are so issued, the Person that survives
or results from such merger, consolidation or combination;
and
(ii) in the case of any transaction described in Section
13(a)(z), the Person that is the party receiving the
greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided that in any such case, (A) if the Common Stock of such
Person is not at such time and has not been continuously over the
preceding 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 (B) 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, combination, sale or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its Common
Stock which are not outstanding or otherwise 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 Section 13(a) and 13(b) and providing
that, as soon as practicable after the date of any consolidation,
merger, combination, sale or transfer mentioned in Section 13(a),
the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon
exercise of the Rights, and will use its best efforts to
cause such registration statement (A) to become effective as
soon as practicable after such filing and (B) to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration
Date; and
(ii) 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.
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section
11(p), or to distribute Right Certificates which evidence
fractional Rights. In lieu of any such fractional Rights, the
Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same
fraction of the current market price of a whole Right. For
purposes of this Section 14(a), the current market price of a
whole Right shall be the closing price of a Right for the Trading
Day immediately prior to the date on which such fractional Rights
would otherwise have been issuable. The closing price of a Right
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, 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. If on any such date no such market maker is making
a market in the Rights, the current market price of the Rights on
such date shall be as determined in good faith by the Board, or,
if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are
multiples of one one-hundredth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than
fractions which are multiples of one one-hundredth of a share of
Preferred Stock). In lieu of any such fractional shares of
Preferred Stock, the Company shall pay to the registered holders
of Right Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of
the current market price of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current
market price of one one-hundredth of a share of Preferred Stock
shall be one one-hundredth of the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of any Triggering Event or upon
any exchange pursuant to Section 24, 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 shall pay to the
registered holders of Right Certificates at the time such Rights
are exercised or exchanged as herein provided an amount in cash
equal to the same fraction of the current market price of a share
of Common Stock. For purposes of this Section 14(c), the current
market price of a share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to
Section 11(d)(i)) for the Trading Day immediately prior to the
date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of certificates representing Common
Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of any certificate representing
Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the
Distribution Date, of any certificate representing Common Stock),
may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any
Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights
Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed
or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the
Rights Agent may deem and treat the Person in whose name a
Right Certificate (or, prior to the Distribution Date, a
certificate representing shares of Common Stock) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the
certificate representing shares of Common Stock made by
anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(d), shall
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall
have any liability to any holder of a Right or other Person
as a result of its inability to perform any of its
obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such
obligation; provided that the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the shares of capital stock which may at
any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive
dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and disbursements and other disbursements incurred in the
execution or administration 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 administration of this Agreement or the
exercise or performance of its duties hereunder, including the
costs and expenses of defending against any claim of liability.
(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 the administration of this
Agreement or the exercise or performance of its duties hereunder
in reliance upon any Right 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, instruction, 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 Agents. (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 that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (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, suffering or
omitting to take 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 either Co-
Chairmen of the Board, the President or any Vice President
and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken,
suffered or omitted in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals
contained in this Agreement or in the Right Certificates
(except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant
to Section 7(d)) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice
of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock
or Preferred Stock to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of
Common Stock or Preferred Stock will, when issued, be duly
authorized, validly 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 either Co-Chairmen of the Board,
the President or any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it
shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith in accordance with
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 the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other
Person.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
or to any holders of Rights resulting from any such act,
default, neglect or misconduct, provided that 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 Right Certificate
surrendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to
clause 1 or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or
transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Stock and Preferred Stock by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common
Stock and Preferred Stock by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within
a period of 30 days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized
and doing business under the laws of the United States or of any
state of the United States, in good standing, having a principal
office in the State of New York, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is
subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000 or
(b) an Affiliate of a corporation described in clause 21(a).
After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act
or deed; 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 the
Preferred Stock, and, subsequent to the Distribution Date, mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this
Section 21, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by the Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares of stock
issuable upon exercise of the Rights made in accordance with the
provisions of this Agreement.
Section 23. Redemption. (a) The Board may, at its option,
at any time prior to the earlier of the occurrence of a Section
11(a)(ii) Event and the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board in its sole
discretion may establish. The Redemption Price shall be payable,
at the option of the Company, in cash, shares of Common Stock or
such other form of consideration as the Board shall determine.
(b) Immediately upon the action of the Board electing to
redeem the Rights (or at such later time as the Board may
establish for the effectiveness of such redemption), and without
any further action and without any notice, the right to exercise
the Rights will terminate and thereafter the only right of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. The Company shall promptly thereafter give
notice of such redemption to the Rights Agent and the holders of
the Rights in the manner set forth in Section 26; provided that
the failure to give, or any defect in, such notice shall not
affect the validity of such redemption. 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. Exchange. (a) At any time after the occurrence
of a Section 11(a)(ii) Event, the Board may, at its option,
exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void
pursuant to Section 7(d)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board shall not be
empowered to effect such exchange at any time after an Acquiring
Person, together with all Affiliates and Associates of such
Acquiring Person, becomes the Beneficial Owner of 50% or more of
the shares of Common Stock then outstanding. From and after the
occurrence of a Section 13 Event, any Rights that theretofore
have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and
may not be exchanged pursuant to this Section 24(a). The
exchange of the Rights by the Board may be made effective at such
time, on such basis and with such conditions as the Board in its
sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the
Board electing to exchange any Rights pursuant to Section 24(a)
and without any further action and without any notice, the right
to exercise such Rights will terminate and thereafter the only
right of a holder of such Rights shall be to receive that number
of shares of Common Stock equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. The Company
shall promptly thereafter give notice of such exchange to the
Rights Agent and the holders of the Rights to be exchanged in the
manner set forth in Section 26; provided that the failure to
give, or any defect in, such notice shall not affect the validity
of such exchange. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock for
Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to
Section 7(d)) held by each holder of Rights.
(c) The Company may at its option substitute, and, in the
event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit
the exchange of Rights for Common Stock ordered in accordance
with Section 24(a), the Company shall substitute to the extent of
such insufficiency, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of
one-one hundredths of a share of Preferred Stock such that the
current market price (determined pursuant to Section 11(d)) of
such number of one-one hundredths of a share of Preferred Stock
is equal to the current market price (determined pursuant to
Section 11(d)) of one share of Common Stock as of the date of
such exchange.
Section 25. Notice of Proposed Actions. (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 Preferred Stock or to make any other distribution to
the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of its Preferred Stock
rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of
outstanding shares of Preferred Stock) or (iv) to effect any
consolidation or merger with any other Person, or to effect
and/or to permit one or more of its Subsidiaries to effect any
sale or other transfer, in one transaction or a series of related
transactions, of 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,
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 Right, to the extent feasible and in accordance
with Section 26, a notice of such proposed action, which shall
specify the record date for the purposes of any such dividend,
distribution or offering of rights or warrants, or the date on
which any such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place
and the date of participation therein by the holders of Preferred
Stock, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause 25(a)(i) or
25(a)(ii) above at least 20 days prior to the record date for
determining holders of the Preferred Stock entitled to
participate in such dividend, distribution or offering, and in
the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of Preferred Stock,
whichever shall be the earlier. The failure to give notice
required by this Section or any defect therein shall not affect
the legality or validity of the action taken by the Company or
the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date a public filing by the
Company with the Securities and Exchange Commission shall
constitute sufficient notice to the holders of securities of the
Company, including the Rights, for purposes of this Agreement and
no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Right, in accordance with Section 26, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) or 13, as the case may be, and (ii) all
references in Section 25(a) to Preferred Stock shall be deemed
thereafter to refer to Common Stock or other capital stock, as
the case may be.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Right to or on the Company shall be sufficiently
given or made if sent by first-class mail (postage prepaid) to
the address of the Company indicated on the signature page hereof
or such other address as the Company shall specify in writing to
the Rights Agent. Subject to the provisions of Section 21, any
notice or demand authorized by this Agreement to be given or made
by the Company or by the holder of any Right to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail (postage prepaid) to the address of the Rights Agent
indicated on the signature page hereof or such other address as
the Rights Agent shall specify in writing to the Company.
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate (or, prior to the Distribution Date, to the
holder of any certificate representing shares of Common Stock)
shall be sufficiently given or made if sent by first-class mail
(postage prepaid) to the address of such holder shown on the
registry books of the Company.
Section 27. Supplements and Amendments. For so long as the
Rights are then redeemable, the Company may, and the Rights Agent
shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval
of any holders of certificates representing shares of Common
Stock. At any time when the Rights are no longer redeemable, the
Company may, and the Rights Agent shall if the Company so
directs, supplement or amend this Agreement without the approval
of any holders of Rights; provided, however, that no such
supplement or amendment may (a) adversely affect the interests of
the holders of Rights as such (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person), (b) cause this
Agreement again to become amendable other than in accordance with
this sentence, or (c) cause the Rights again to become
redeemable. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section, the Rights Agent shall execute such supplement or
amendment.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board, etc.
For all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is
the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in
effect on the date of this Agreement. The Board shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board
or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including 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 exchange or not to redeem or exchange the Rights or to
amend the Agreement).
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the
certificates representing the shares of Common Stock) any legal
or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the
certificates representing the shares of Common Stock).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same
instrument.
Section 34. Descriptive Headings. The captions herein are
included for convenience of reference only, do not constitute a
part of this Agreement and shall be ignored in the construction
and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
McMoRan Exploration Co.
By:/s/ Xxxxxxx X. Xxxxxxxx
------------------------
Xxxxxxx X. Xxxxxxxx,
Co-Chairman of the Board, President
and Chief Executive Officer
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Secretary
Mellon Securities Trust Company
By:
Name:
Title:
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxx
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
McMoRan Exploration Co.
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
We, Xxxxxxx X. Xxxxxxxx, Co-Chairman, President and Chief
Executive Officer, and Xxxxxxx X. Xxxxxxxxxx, Xx., Secretary, of
McMoRan Exploration Co., a corporation organized and existing
under the General Corporation Law of the State of Delaware
("Delaware Law"), in accordance with the provisions thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation,
the Board of Directors duly adopted the following resolution
creating a series of Preferred Stock in the amount and having the
designations, voting powers, preferences and relative,
participating, optional and other special rights and
qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares. The shares of
such series shall be designated as "Series A Participating
Cumulative Preferred Stock" (the "Series A Preferred Stock"), and
the number of shares constituting such series shall be 1,000,000.
Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors;
provided that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares issuable upon
exercise or conversion of outstanding rights, options or other
securities issued by the Corporation.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred Stock
shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable on December 1,
March 1, June 1 and September 1 of each year (each such date
being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of any share or fraction of a
share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of $1.00
and subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends or other distributions and 100 times the aggregate
per share amount of all non-cash dividends or other
distributions (other than a dividend payable in shares of
Common Stock, par value $0.01 per share, of the Corporation
(the "Common Stock") or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise)),
declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A
Preferred Stock. If the Corporation shall at any time after
November 13, 1998 (the "Rights Declaration Date") pay any
dividend on Common Stock payable in shares of Common Stock
or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior
to such event under clause 2(a)(ii) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph 2(a) above immediately after it declares a
dividend or distribution on the Common Stock (other than as
described in clauses 2(a)(ii)(A) and 2(a)(ii)(B) above);
provided that if no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date (or, with respect to the
first Quarterly Dividend Payment Date, the period between
the first issuance of any share or fraction of a share of
Series A Preferred Stock and such first Quarterly Dividend
Payment Date), a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Preferred Stock, unless the
date of issue of such shares is on or before the record date
for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue and be
cumulative from the date of issue of such shares, or unless
the date of issue is a date after the record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and on or
before such Quarterly Dividend Payment Date, in which case
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on shares
of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not
be more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall
entitle the holder thereof to 100 votes on all matters
submitted to a vote of stockholders of the Corporation. If
the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or
combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a
fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock shall vote together as a
single class on all matters submitted to a vote of
stockholders of the Corporation.
(c)(i) If at any time dividends on any Series A Preferred
Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall xxxx
the beginning of a period (herein called a "default period")
which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A
Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all
holders of Preferred Stock and any other series of Preferred
Stock then entitled as a class to elect directors, voting
together as a single class, irrespective of series, shall have
the right to elect two Directors.
(ii) During any default period, such voting right
of the holders of Series A Preferred Stock may be
exercised initially at a special meeting called
pursuant to subparagraph 3(c)(iii) hereof or at any
annual meeting of stockholders, and thereafter at
annual meetings of stockholders; provided that neither
such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase,
in certain cases, the authorized number of Directors
shall be exercised unless the holders of 10% in number
of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum
of holders of Common Stock shall not affect the
exercise by holders of Preferred Stock of such voting
right. At any meeting at which holders of Preferred
Stock shall exercise such voting right initially during
an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may
then exist up to two Directors or, if such right is
exercised at an annual meeting, to elect two Directors.
If the number which may be so elected at any special
meeting does not amount to the required number, the
holders of the Preferred Stock shall have the right to
make such increase in the number of Directors as shall
be necessary to permit the election by them of the
required number. After the holders of the Preferred
Stock shall have exercised their right to elect
Directors in any default period and during the
continuance of such period, the number of Directors
shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Preferred
Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously
exercised their right to elect Directors, the Board of
Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 10% of the total
number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a
special meeting of holders of Preferred Stock, which
meeting shall thereupon be called by either Co-Chairman
of the Board, the President and Chief Executive
Officer, an Executive Vice President, a Senior Vice
President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are
entitled to vote pursuant to this paragraph 3(c)(iii)
shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his
last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time
not earlier than 20 days and not later than 60 days
after such order or request or in default of the
calling of such meeting within 60 days after such order
or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of
shares of Preferred Stock outstanding, irrespective of
series. Notwithstanding the provisions of this
paragraph 3(c)(iii), no such special meeting shall be
called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of
stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the
whole number of Directors until the holders of
Preferred Stock shall have exercised their right to
elect two Directors voting as a class, after the
exercise of which right (x) the Directors so elected by
the holders of Preferred Stock shall continue in office
until their successors shall have been elected by such
holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may
(except as provided in paragraph 3(c)(ii) hereof) be
filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of
stock which elected the Director whose office shall
have become vacant. References in this paragraph 3(c)
to Directors elected by the holders of a particular
class of stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock
as a class to elect Directors shall cease, (y) the term
of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of
Directors shall be such number as may be provided for
in the certificate of incorporation or bylaws
irrespective of any increase made pursuant to the
provisions of paragraph 3(c)(ii) hereof (such number
being subject, however, to change thereafter in any
manner provided by law or in the certificate of
incorporation or bylaws). Any vacancies in the Board
of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a
majority of the remaining Directors.
(d) The Certificate of Incorporation of the Corporation
shall not be amended in any manner (whether by merger or
otherwise) so as to adversely affect the powers, preferences
or special rights of the Series A Preferred Stock without
the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting
separately as a class.
(e) Except as otherwise provided herein, holders of
Series A Preferred Stock shall have no special voting
rights, and their consent shall not be required for taking
any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on outstanding shares of Series A Preferred
Stock shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
Preferred Stock and all such other parity stock on
which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem, purchase or otherwise acquire for
value any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock; provided that the
Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in
exchange for shares of stock of the Corporation ranking
junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred
Stock; or
(iv) redeem, purchase or otherwise acquire for
value any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors)
to all holders of Series A Preferred Stock and all such
other parity stock upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and
equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for value
any shares of stock of the Corporation unless the
Corporation could, under paragraph 4(a), purchase or
otherwise acquire such shares at such time and in such
manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock redeemed, purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock without designation as to series and
may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors as
permitted by the Certificate of Incorporation or as otherwise
permitted under Delaware Law.
Section 6. Liquidation, Dissolution and Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $0.01 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment;
provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per
share to holders of Common Stock, or (2) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock
and all such other parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. If the Corporation
shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or
effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case
the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. If the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for
or changed into other stock or securities, cash or any other
property, then in any such case the shares of Series A Preferred
Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the
aggregate amount of stock, securities, cash or any other
property, as the case may be, into which or for which each share
of Common Stock is changed or exchanged. If the Corporation
shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or
effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The Series A Preferred Stock
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank
junior (as to dividends and upon liquidation, dissolution and
winding up) to all other series of the Corporation's preferred
stock except any series that specifically provides that such
series shall rank junior to the Series A Preferred Stock.
Section 10. Fractional Shares. Series A Preferred Stock
may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate this 13th day of November, 1998.
McMoRan Exploration Co.
By:/s/ Xxxxxxx X. Xxxxxxxx
------------------------
Xxxxxxx X. Xxxxxxxx
Co-Chairman of the Board,
President and Chief Executive
Officer
By:/s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
------------------------------
Xxxxxxx X. Xxxxxxxxxx, Xx.
Secretary
EXHIBIT B
FORM OF RIGHT CERTIFICATE
No. R- _______________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF NOVEMBER 13, 2008 AND THE
DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR
EXCHANGED BY THE COMPANY AS SET FORTH IN THE RIGHTS AGREEMENT.
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR
TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
MAY BE NULL AND VOID.
RIGHT CERTIFICATE
McMoRan EXPLORATION CO.
This Right Certificate certifies that
______________________, or registered assigns, is the registered
holder of the number of Rights set forth above, each of which
entitles the holder (upon the terms and subject to the conditions
set forth in the Rights Agreement dated as of November 13, 1998
and as amended from time to time (the "Rights Agreement") between
McMoRan Exploration Co., a Delaware corporation (the "Company"),
and Mellon Securities Trust Company (the "Rights Agent")) to
purchase from the Company, at any time after the Distribution
Date and prior to the Expiration Date, ____ one-hundredth[s] of a
fully paid, nonassessable share of Series A Participating
Cumulative Preferred Stock (the "Preferred Stock") of the Company
at a purchase price of $80.00 per one one-hundredth of a share
(the "Purchase Price"), payable in lawful money of the United
States of America, upon surrender of this Right Certificate, with
the form of election to purchase and related certificate duly
executed, and payment of the Purchase Price at an office of the
Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the
meanings assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate
(and the number and kind of shares issuable upon exercise of each
Right) and the Purchase Price set forth above are as of ________,
____, and may have been or in the future be adjusted as a result
of the occurrence of certain events, as more fully provided in
the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the
Rights evidenced by this Right Certificate are beneficially owned
by (a) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (b) a transferee of an Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (c) under certain circumstances
specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person
becoming such, such Rights shall become null and void, and no
holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the
Rights Agent designated for such purpose and subject to the terms
and conditions set forth in the Rights Agreement, any Rights
Certificate or Certificates may be transferred or exchanged for
another Rights Certificate or Certificates evidencing a like
number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Board
of Directors of the Company may, at its option,
(a) at any time prior to the earlier of (i) the
occurrence of a Section 11(a)(ii) Event and (ii) the Final
Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right;
or
(b) at any time after any Person becomes an Acquiring
Person (but before such Person becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then
outstanding), exchange all or part of the then outstanding
Rights (other than Rights held by the Acquiring Person and
certain related Persons) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right. If
the Rights shall be exchanged in part, the holder of this
Right Certificate shall be entitled to receive upon
surrender hereof another Right Certificate or Certificates
for the number of whole Rights not exchanged.
No fractional shares of Preferred Stock are required to be
issued upon the exercise of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Certificates for
the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder
of the shares of capital stock which may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal by one of its
authorized officers.
Dated as of________________,______
McMoRan Exploration Co.
[Seal] By:____________________________
Name:
Title:
Countersigned:
Mellon Securities Trust Company,
as Rights Agent
By: ___________________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________________
hereby sells, assigns and transfers unto ____________________
_____________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ______________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: _____________________, 19__
____________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being assigned by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by
this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: __________, ____ ____________________________
Signature
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Right Certificate.)
To: McMoRan Exploration Co.
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to
purchase shares of Preferred 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 securities be
issued in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________
(Please print name and address)
_______________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for
the balance of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Dated: ________________, 19__
___________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by
this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: ____________, ____ __________________________________
Signature
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
EXHIBIT C
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR
TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
MAY BE NULL AND VOID.
SUMMARY OF RIGHTS
McMoRan EXPLORATION CO.
STOCKHOLDER RIGHTS PLAN
Summary of Terms
Form of Security The Board has declared a dividend of
one preferred stock purchase right for
each outstanding share of the Company's
Common Stock, payable to holders of
record as of the close of business on
November 13, 1998 (each a "Right" and
collectively, the "Rights")
Transfer Prior to the Distribution Date,
generally will be evidenced by the
certificates for and will be
transferred with the Common Stock, and
the registered holders of the Common
Stock will be deemed to be the
registered holders of the Rights.
After the Distribution Date, the Rights
Agent will mail separate certificates
evidencing the Rights to each record
holder of the Common Stock as of the
close of business on the Distribution
Date, and thereafter the Rights will be
transferable separately from the Common
Stock.
Exercise Prior to the Distribution Date, the
Rights will not be exercisable.
After the Distribution Date, prior to
the occurrence of an event described
below under "Flip-In" and "Flip-Over",
each Right will be exercisable to
purchase, for $80.00 (the "Purchase
Price"), one one-hundredth of a share
of Series A Participating Cumulative
Preferred Stock, par value $0.01 per
share, of the Company.
Flip-In Subject to certain exceptions, if any
person or group (an "Acquiring Person")
becomes the beneficial owner of the
Threshold Percentage or more of the
Company's Common Stock, then each Right
(other than Rights beneficially owned
by the Acquiring Person and certain
affiliated persons) will entitle the
holder to purchase, for the Purchase
Price, a number of shares of the
Company's Common Stock having a market
value of twice the Purchase Price.
"Threshold Percentage" means (i) 20%
with respect to Alpine Capital, L.P.,
Xxxxxx X. Xxxxx III, Algenpar, Inc., X.
Xxxxxx Xxxxxxxx, Keystone, Inc., Xxxxxx
X. Xxxx and their respective Affiliates
and Associates and (ii) 15% with
respect to any other Person and its
Affiliates and Associates.
Flip-Over If, after any person has become an
Acquiring Person, (1) the Company is
involved in a merger or other business
combination in which the Company is not
the surviving corporation or its Common
Stock is exchanged for other securities
or assets or (2) the Company and/or one
or more of its subsidiaries sell or
otherwise transfer assets or earning
power aggregating more than 50% of the
assets or earning power of the Company
and its subsidiaries, taken as a whole,
then each Right will entitle the holder
to purchase, for the Purchase Price, a
number of shares of common stock of the
other party to such business
combination or sale (or in certain
circumstances, an affiliate) having a
market value of twice the Purchase
Price.
Exchange At any time after any person has become
an Acquiring Person (but before any
person becomes the beneficial owner of
50% or more of the Company's Common
Stock), the Board may exchange all or
part of the Rights (other than the
Rights beneficially owned by the
Acquiring Person and certain affiliated
persons) for shares of Common Stock at
an exchange ratio of one share of
Common Stock per Right.
Redemption The Board may redeem all of the Rights
at a price of $0.01 per Right at any
time prior to the time that any person
becomes an Acquiring Person.
Expiration The Rights will expire on November 13,
2008, unless earlier exchanged or
redeemed.
Amendments For so long as the Rights are
redeemable, the Rights Agreement may be
amended in any respect.
At any time after the Rights are no
longer redeemable, the Rights Agreement
may not be amended in any respect that
would adversely affect the Rights
holders (other than any Acquiring
Person and certain affiliated persons)
or cause the Rights again to become
redeemable.
Voting Rights A rights holder has no rights as a
stockholder of the Company, including
the right to vote and to receive
dividends.
Antidilution
Provisions The Rights Agreement includes standard
antidilution provisions designed to
protect the efficacy of the Rights.
Taxes While the dividend of the Rights will
not be taxable to stockholders or to
the Company, stockholders or the
Company may, depending upon the
circumstances, recognize taxable income
in the event that the Rights become
exercisable as set forth above.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, as amended from time to
time, the complete terms of which are hereby incorporated by
reference.
