RIGHTS AGREEMENT
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THE LACLEDE GROUP, INC.
and
UMB BANK N. A.
Rights Agent
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Dated as of October 1, 2001
INDEX
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Page
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Section 1. Definitions.......................................................................1
Section 2. Appointment of Rights Agent.......................................................4
Section 3. Issue of Right Certificates.......................................................5
Section 4. Form of Right Certificates........................................................6
Section 5. Countersignature and Registration.................................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates......................................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.....................8
Section 8. Cancellation and Destruction of Right Certificates................................10
Section 9. Availability of Preferred Shares..................................................10
Section 10. Preferred Shares Record Date......................................................10
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights............................................................................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares........................17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.....................................................................17
Section 14. Fractional Rights and Fractional Shares...........................................18
Section 15. Rights of Action..................................................................19
Section 16. Agreement of Right Holders........................................................19
Section 17. Right Certificate Holder Not Deemed a Stockholder.................................20
Section 18. Concerning the Rights Agent.......................................................20
Section 19. Merger or Consolidation or Change of Name of Rights Agent.........................20
Section 20. Duties of Rights Agent............................................................21
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Page
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Section 21. Change of Rights Agent............................................................22
Section 22. Issuance of New Right Certificates................................................23
Section 23. Redemption........................................................................23
Section 24. Exchange..........................................................................24
Section 25. Notice of Certain Events..........................................................25
Section 26. Notices...........................................................................26
Section 27. Supplements and Amendments........................................................26
Section 28. Successors........................................................................27
Section 29. Benefits of This Agreement........................................................27
Section 30. Severability......................................................................27
Section 31. Governing Law.....................................................................27
Section 32. Counterparts......................................................................27
Section 33. Descriptive Headings..............................................................27
Exhibit A - Form of Certificate of Designation, Preferences and Rights
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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RIGHTS AGREEMENT
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This Agreement, dated as of October 1, 2001 is entered into between THE
LACLEDE GROUP, INC., a Missouri corporation (the "Company") and UMB BANK,
N.A., a national banking corporation, as rights agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one preferred share purchase right (a "Right") for
each Common Share, (as hereinafter defined) of the Company outstanding at the
close of business on October 1, 2001 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date, the time
at which the Rights are exchanged as provided in Section 24 hereof and the
Final Expiration Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates (as hereinafter defined)
and Associates (as hereinafter defined) of such Person, without the Prior
Written Approval of the Company (as hereinafter defined), shall be the
Beneficial Owner (as hereinafter defined) of securities of the Company
constituting 20% or more of the Voting Power (as hereinafter defined) of the
Company or was such a Beneficial Owner at any time after the date hereof,
whether or not such Person continues to be the Beneficial Owner of securities
representing 20% or more of the Voting Power of the Company, but shall not
include (i) the Company, any Subsidiary of the Company, any employee benefit
plan or compensation arrangement of the Company or any Subsidiary of the
Company, or any entity holding securities of the Company to the extent
organized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such employee benefit plan or
compensation arrangement or (ii) any Person who or which, together with all
Affiliates and Associates of such Person, inadvertently may become the
Beneficial Owner of securities of the Company representing 20% or more of the
Voting Power of the Company or otherwise becomes such a Beneficial Owner
without a plan or intention to acquire control of the Company, so long as
such Person, individually or together with the Affiliates and Associates of
such Person, promptly enters into, and delivers to the Company, an
irrevocable commitment promptly to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting, with respect to
such securities), sufficient securities of the Company so that such Person,
together with all Affiliates and Associates of such Person, ceases to be the
Beneficial Owner of 20% or more of the Voting Power of the Company.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
as the result of an acquisition of voting securities of the Company by the
Company which, by reducing the amount of such securities outstanding,
1
increases the proportionate voting power of such securities beneficially
owned by such Person to 20% or more of the Voting Power; provided, however,
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that if a Person becomes the Beneficial Owner of securities constituting 20%
or more of the Voting Power by reason of purchases by the Company and shall,
after such purchases by the Company, become the Beneficial Owner of any
additional voting securities of the Company without the Prior Written
Approval of the Company, then such Person shall be deemed to be an Acquiring
Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) 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 (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
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Beneficial Owner of, or to beneficially own, securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
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deemed the Beneficial Owner of, or to beneficially own, any security under
this clause (B) if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations under the
Exchange Act and (2) is not also then reportable by such person on Schedule
13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's 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 clause (B) of subparagraph (ii) of this paragraph (c)) or
disposing of any securities of the Company.
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Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding", when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to beneficially own hereunder.
(d) "Board of Directors" shall mean the Board of Directors of the
Company as constituted from time to time.
(e) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of Missouri are
authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M.,
St. Louis, Missouri time, on such date; provided, however, that if such date
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is not a Business Day it shall mean 5:00 P.M., St. Louis, Missouri time, on
the next succeeding Business Day.
(g) "Common Share" when used with reference to the Company shall
mean the shares of common stock, par value $1.00 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock with the greatest Voting Power of such Person or
the equity securities or other equity interest having power to control or
direct the management of such Person, or, if such Person is a Subsidiary (as
hereinafter defined) of another Person, of the Person which ultimately
controls such first-mentioned Person and which has issued and outstanding
such capital stock, equity securities or equity interests.
(h) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(i) "Exchange Ratio" shall have the meaning set forth in Section
24(a) hereof.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(k) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity, and shall include any
successor (by merger or otherwise) of any such entity.
(l) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $25.00 per share, of the Company
having the rights and preferences set forth in the Form of Certificate of
Designation, Preferences and Rights attached to this Agreement as Exhibit A.
(m) "Prior Written Approval of the Company" shall mean prior express
written consent of the Company to the actions in question, executed on behalf
of the Company by a duly authorized officer of the Company following express
approval by action of at least a majority of the members of the Board of
Directors then in office.
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(n) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(o) "Redemption Date" shall have the meaning set forth in Section
7(a) hereof.
(p) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(q) "Right" shall have the meaning set forth in the second paragraph
of this Agreement.
(r) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(s) "Shares Acquisition Date" shall mean the earlier of (i) the
first date of public announcement by the Company or an Acquiring Person that
an Acquiring Person has become an Acquiring Person, or (ii) the date on which
the Company first has notice, direct or indirect, or otherwise determines
that a Person has become an Acquiring Person.
(t) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(u) "Subsidiary" shall mean, with respect to any Person, 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) of such
other Person are at the time directly or indirectly owned by such Person or
one or more of such Persons' Subsidiaries, except that "Subsidiary" when used
with reference to the Company, shall mean any Person of which either a
majority of the Voting Power of the voting equity securities or a majority of
the equity interests is owned, directly or indirectly, by the Company.
(v) "Trading Day" shall have the meaning set forth in Section
11(f) hereof.
(w) "Voting Power" shall mean the voting power of all securities
of a Person then outstanding generally entitled to vote for the election of
directors of the Person (or, where appropriate, for the election of persons
performing similar functions).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall, prior to the Distribution
Date, also be the holders of the Common Shares of the Company) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable. In the event the Company
appoints one or more co-Rights Agents, the respective duties of the Rights
Agents and any co-Rights Agents shall be as the Company shall determine.
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Section 3. Issue of Right Certificates.
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(a) Until the earlier of (i) the close of business on the tenth
Business Day after the Shares Acquisition Date or (ii) the close of business
on the tenth Business Day (or such later date as may be determined by action
of the Board of Directors but in no event later than the tenth Business Day
after such time as any Person becomes an Acquiring Person) after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan or compensation
arrangement of the Company or of any Subsidiary of the Company, or any entity
holding securities of the Company to the extent organized, appointed or
established by the Company or any Subsidiary of the Company for or pursuant
to the terms of any such employee benefit plan or compensation arrangement)
is first published or sent or given within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act, without the Prior
Written Approval of the Company, which tender or exchange offer would result
in any Person becoming the Beneficial Owner of Voting Power aggregating 20%
or more of the outstanding Voting Power (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"),
(y) the Rights will be evidenced (subject to the provisions of paragraph (b)
of this Section 3) by the certificates for the Common Shares of the Company
registered in the names of the holders of the Common Shares (which
certificates for Common Shares shall be deemed also to be Right Certificates)
and not by separate Right Certificates, as more fully set forth below, and
(z) the Rights (and the right to receive certificates therefor) will be
transferable only in connection with the transfer of the underlying Common
Shares of the Company, as more fully set forth below. As soon as practicable
after the Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Company shall prepare and execute, and the Rights
Agent shall countersign and send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Shares of the Company as of the
close of business on the Distribution Date, at the address of such holder
shown on the records of the Company, a right certificate, in substantially
the form of Exhibit B hereto (the "Right Certificate"), evidencing one Right
for each Common Share of the Company so held, subject to adjustment as
provided herein. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Shares of
the Company as of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates
for Common Shares of the Company outstanding as of the Record Date until the
Distribution Date (or the earlier redemption, expiration, exchange or
termination of the Rights), the Rights will be evidenced by such certificates
for the Common Shares of the Company registered in the names of the holders
of the Common Shares, and the registered holders of the Common Shares of the
Company shall also be registered holders of the associated Rights. Until the
Distribution Date (or the earlier redemption, expiration, exchange or
termination of the Rights), the surrender for transfer of any of the
certificates for Common Shares of the Company outstanding in respect of
5
which Rights have been issued shall also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
(c) Certificates for the Common Shares of the Company issued after
the Record Date but prior to the earlier of the Distribution Date or the
redemption, expiration, exchange or termination of the Rights shall be deemed
also to be certificates for Rights and shall have impressed, printed or
written on, or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in an agreement between The Laclede Group,
Inc. (the "Company") and UMB Bank, n.a., as Rights Agent, dated as of
October 1, 2001 as it may be supplemented or amended from time to time
(the "Rights Agreement"), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights (as defined in the Rights Agreement) may
expire or may be redeemed, exchanged or be evidenced by separate
certificates, and no longer be evidenced by this certificate. The
Company 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, Rights issued to or held by
Acquiring Persons or their Affiliates or Associates (as defined in the
Rights Agreement) and any subsequent holder of such Rights may become
null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, expiration, exchange or
termination of the Rights), the Rights associated with the Common Shares of
the Company represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Shares of the Company represented by such certificates.
In the event that the Company purchases or acquires any Common Shares of
the Company after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares that are no longer outstanding.
Section 4. Form of Right Certificates.
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(a) The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as 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 customary usage. Subject to the provisions of
Section 22 hereof, the Right Certificates shall entitle the holders thereof
to
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purchase such number of one one-hundredths of a Preferred Share as shall
be set forth therein at the price per one one-hundredth of a Preferred Share
set forth therein (the "Purchase Price"), but the number of such one
one-hundredths of a Preferred Share and the Purchase Price shall be and
remain subject to adjustment as provided in Sections 11, 13 and 22 hereof.
(b) Any Right Certificate issued pursuant to Section 3(a) hereof
that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time
upon the transfer of any Rights to an Acquiring Person or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate, and any Right Certificate issued pursuant to Section 6, 11 or 22
hereof upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right Certificate were issued to a Person
who was an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person. This Right Certificate and the Rights represented
hereby are void in the circumstances specified in Section 7(e) of the
Rights Agreement.
The failure to print the foregoing legend on any such Right Certificate or
any defect therein shall not affect in any manner whatsoever the application
or interpretation of the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer, President or
any Vice President, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof and shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned manually or by facsimile signature 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, nevertheless, may be countersigned by the
Rights Agent, issued and delivered with the same force and effect as though
the individual 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 individual 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 individual was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its shareholder services office or such other office
designated for such purpose, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
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evidenced on its face by each of the Right Certificates, the certificate
number of each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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Subject to the provisions of Section 14 hereof, at any time after the close
of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Rights Certificates
representing Rights that have become void pursuant to Section 11(b) hereof or
that have been exchanged pursuant to Section 24 hereof), may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
shareholder services office of the Rights Agent or such office designated for
such purpose. Thereupon, the Rights Agent shall countersign and deliver to
the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for 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.
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(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein), in whole or
in part, at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the shareholder services office
of the Rights Agent or such office designated for such purpose, together with
payment of the Purchase Price for each one one-hundredth of a Preferred Share
as to which the Rights are exercised, at or prior to the earliest of (i) the
Final Expiration Date (as defined below), (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (the "Redemption Date"), or
(iii) the time at which such Rights are exchanged as provided in Section 24
hereof. The "Final Expiration Date," as used in this Agreement, shall be
October 1, 2011.
8
(b) The Purchase Price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall initially be
$90.00, shall be subject to adjustment from time to time as provided in
Section 11 or 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Rights Certificate in accordance with Section 9 hereof by certified
check, bank draft or money order payable to the order of the Company or the
Rights Agent, the Rights Agent shall thereupon promptly (i)(A) requisition
from any transfer agent of the Preferred Shares (or make available, if the
Rights Agent is the transfer agent) certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably authorizes any such
transfer agent to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent of the Preferred Shares with such depositary
agent) and the Company hereby directs such depositary agent to comply with
such request; (ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder; and (iv) when appropriate after
receipt of any such cash or securities, promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to such holder's duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, upon
the first occurrence of any Person becoming an Acquiring Person or a
transaction described in Section 13 hereof, any Rights that are or were at
any time on or after the earlier of the Shares Acquisition Date or the
Distribution Date beneficially owned by an Acquiring Person or any Associate
or Affiliate of an Acquiring Person shall become void with respect to the
rights provided under Section 11(b), Section 13(a) and Section 24 hereof, and
any such holder of such Rights shall thereafter have no right to exercise
such Rights under the provisions of Section 11(b) and Section 13(a) hereof,
or to receive any Common Shares in exchange therefor pursuant to the
provisions of Section 24 hereof.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the certificate
contained in the appropriate form of election to purchase set forth on the
reverse side
9
of the Right Certificate surrendered for such exercise shall
have been properly completed and duly executed by the registered holder
thereof and the Company shall have been provided with 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
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Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and
no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Right Certificates to
the Company, or shall, at the written request of the Company, destroy such
cancelled Right Certificates, and, in such case, shall deliver a certificate
of destruction thereof to the Company.
Section 9. Availability of Preferred Shares.
--------------------------------
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares or any Preferred Shares held in its treasury, the number of Preferred
Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 hereof.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
(c) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a
Person other than, or the issuance or delivery of certificates or depositary
receipts for Preferred Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise,
or to issue or deliver any certificates or depositary receipts for Preferred
Shares upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person (other than
----------------------------
the Company) in whose name any certificate for Preferred Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
10
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
-------- -------
date of such surrender and payment is a date upon which the Preferred Shares
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares
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 holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number
---------------------------------------------------------
of Rights. The Purchase Price, the number of Preferred Shares covered by each
---------
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) In the event the Company shall at any time after the date of
this Agreement (i) declare a dividend on the Preferred Shares payable in
Preferred Shares, (ii) subdivide the outstanding Preferred Shares, (iii)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (iv) issue any shares of its capital stock in a reclassification of
the Preferred Shares (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11, the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time, shall be entitled to receive the aggregate number and kind of shares of
capital stock, which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of the
Company were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise of
one Right.
(b) Subject to Section 24 hereof, in the event any Person becomes an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at the then current Purchase Price multiplied
by the then number of one one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and
in lieu of Preferred Shares, such number of Common Shares of the Company as
shall equal the result obtained by (y) multiplying the then current Purchase
Price by the then number of one one-hundredths of Preferred Shares for which
a Right is then exercisable and dividing that product by (z) 50% of the then
current per share market price of the Common Shares of the Company
(determined pursuant to Section 11(f) hereof) on the date of the occurrence
of such event (such number of shares being referred to as the "number of
Adjustment Shares").
11
From and after the occurrence of such event, any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate
or Affiliate of such Acquiring Person) shall be void, and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person, Associate or Affiliate of an Acquiring
Person whose Rights would be void pursuant to the preceding sentence shall be
cancelled.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued shares to permit the
exercise in full of the Rights in accordance with the foregoing Section
11(b), the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise of the Rights.
In the event the Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such additional Common
Shares, the Company shall substitute, for each Common Share that would
otherwise be issuable upon exercise of a Right, a number of Preferred Shares
or fraction thereof such that the current per share market price of one
Preferred Share multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.
(d) If the Company shall fix a record date for the issuance of
rights (other than any Rights hereunder), options or warrants to all holders
of Preferred Shares entitling them (for a period expiring within 90 calendar
days after such record date) to subscribe for or purchase Preferred Shares
(or shares having the same or more favorable rights, privileges and
preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares,
at a price per Preferred Share or equivalent preferred share (or having a
conversion price per Preferred Share, if a security is convertible into
Preferred Shares or equivalent preferred shares), less than the then current
per share market price of the Preferred Shares (as defined in Section 11(f)
hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of Preferred Shares outstanding
on such record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration, part
or all of which
12
shall be in a form other than cash, the value of such consideration shall be
as determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of Rights. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(e) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(d) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of
Preferred Shares on such record date, less the fair market value (as
determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and holders of the Rights) of the
portion of the assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one Preferred Share, and
the denominator of which shall be such then current per share market price of
the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the capital stock of the Company to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(f) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for purposes of this
Section 11(f)), on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as hereinafter defined) immediately prior to such date; provided, however,
-------- -------
that in the event that the current per share market price of a Security is
determined during a period following the announcement by the issuer of such
Security of (i) a dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares or (ii) any
subdivision, combination or reclassification of such Security, and prior to
the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution or the record date for such subdivision, combination
or reclassification, then, and in each such case, the "current per share
market price" shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock
13
Exchange or, if the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high 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 Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected by a majority of the Board of
Directors. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.
For the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in accordance with
the method set forth in immediately preceding paragraph. If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to the immediately
preceding paragraph (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof), multiplied
by one hundred. If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with
the Rights Agent.
(g) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
-------- -------
this Section 11(g) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share
or security, as the case may be. Notwithstanding the first sentence of this
Section 11(g), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which mandates such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(h) In the event that at any time, as a result of an adjustment made
pursuant to Section 11(a) or (b) hereof, the holder of any Right shall be
entitled to receive upon exercise of such Right any shares of capital stock
of the Company other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained
in Section 11(a) through (e) hereof, inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(i) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted
14
Purchase Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(j) Unless the Company shall have exercised its election as provided
in Section 11(k) hereof, upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(d) and (e) hereof, each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
(A) the number of one one-hundredths of a Preferred Share covered by a Right
immediately prior to the adjustment by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(k) The Company may elect, on or after the date of any adjustment of
the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share 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 one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(k), 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 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(l) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
15
(m) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of
the Preferred Shares 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 Preferred Shares at such adjusted Purchase Price.
(n) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder
-------- -------
a due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(o) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that in its sole discretion and good faith judgment a majority
of the Board of Directors shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares, (ii) issuance
wholly for cash of any Preferred Shares at less than the then current per
share market price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred
Shares or (v) issuance of rights, options or warrants referred to hereinabove
in this Section 11, hereafter made by the Company to the holders of its
Preferred Shares, shall not be taxable to such stockholders.
(p) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares, or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then, in any such case, (A)
the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) each Common Share outstanding immediately after
such event shall have issued with respect to it that number of Rights which
each Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
16
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Sections 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Shares or Preferred Shares and the Securities and
Exchange Commission a copy of such certificate and (c) if such adjustment
occurs at anytime after the Distribution Date, mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 26 hereof.
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustments therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power.
-------------
(a) In the event that, directly or indirectly, at any time after a
Person has become an Acquiring Person, (x) the Company shall consolidate
with, or merge with and into, any other Person, (y) any Person shall
consolidate with or merge with and into the Company, and the Company shall be
the continuing or surviving corporation of such merger and, in connection
with such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than to the Company
or one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right, subject to
Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of shares of Common Shares of
such other Person (including the Company as successor thereto or as the
surviving corporation), as shall equal the result obtained by (A) multiplying
the then current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares of such other person (determined in the manner described in Section
11(f) hereof) on the date of consummation of such consolidation, merger, sale
or transfer; (ii) the issuer of such Common Shares shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such issuer, and (iv) such issuer shall take such steps (including, but not
limited to, the authorization and reservation of a sufficient number of its
Common Shares to permit exercise of all outstanding Rights in accordance with
this Section 13(a)) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to the Common Shares of the Company
thereafter deliverable upon the exercise of the Rights.
(b) The Company shall not consummate any such consolidation, merger,
sale or transfer unless, prior thereto, the Company and such issuer shall
have executed and delivered to
17
the Rights Agent a supplemental agreement in which the issuer agrees to
assume, and to be liable for, the obligations and duties of the Company
pursuant to this Agreement. The Company shall not enter into any transaction
of the kind referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits intended
to be afforded by the Rights. The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other
transfers.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted
price, or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Rights selected by a
majority of the Board of Directors. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date
as determined in good faith by a majority of the Board of Directors shall be
used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) or Common Shares upon exercise of the
Rights or to distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) or Common Shares. In lieu of fractional
Preferred Shares that are not integral multiples of one one-hundredth of a
Preferred Share or Common Shares, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Preferred Share or one Common Share. For purposes of this
Section 14(b), the current per share market value of a Preferred Share or a
Common Share shall be the closing price
18
of the Preferred Share or Common Share (as determined pursuant to Section
11(f) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right, by the acceptance of the Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
share upon exercise of Rights (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
----------------
this Agreement, except the rights of action given to the Rights Agent under
Section 20 hereof, are vested in the respective registered holders of the
Right Certificates and (and, prior to the Distribution Date, the registered
holders of Common Shares); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Shares), without the
consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Stock), may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's 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. Holders of Rights shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred by them in any action
to enforce the provisions of 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 Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the shareholder services office of the Rights Agent or such office designated
for such purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Share Certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
Certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary.
19
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 Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
---------------------------
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Right Certificate
or certificate for the Preferred Shares or Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
Any 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 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all
20
such cases, such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and, in case at that
time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name
or in its changed name; and in all such cases, such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be provided or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President,
the Treasurer or the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company 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
exercisability of the Rights (including the Rights becoming void pursuant to
Section 11(b) hereof) or any adjustment in the terms of the Rights (including
the
21
manner, method or amount thereof) provided for in Section 3, 11, 13, 23,
or 24 hereof, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any Preferred Shares or Common Shares to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Preferred Shares or Common
Shares will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary, or the 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 or suffered to be
taken by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions.
(h) The Rights Agent and any 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 legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) 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.
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 Shares and Preferred
22
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail or, prior to the Distribution Date, through any filing made by the
Company pursuant to the Exchange Act. 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 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, in good standing, having an office in the States of New York or
Missouri, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $25,000,000, or (b) an
affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Shares and Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates or, prior to the
Distribution Date, through any filing made by the Company pursuant to the
Exchange Act. Failure to give any notice provided for this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
----------------------------------
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by a majority of the Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
----------
(a) A majority of the Board of Directors may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person redeem all
but not less than all of the then outstanding Rights at a redemption price of
$.01 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption
23
price being hereinafter referred to as the "Redemption Price"). The
redemption of the Rights by the Board of Directors may be made effective
at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights pursuant to Section 23(a) and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption;
provided, however, that the failure to give, or any defect in, any such
-------- -------
notice shall not affect the validity of such redemption. Within 10 days after
the action of the Board of Directors ordering the redemption of the Rights,
the Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Shares. 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.
(c) Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of Common Shares prior
to the Distribution Date.
Section 24. Exchange.
--------
(a) The Board of Directors may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any adjustment in the number of Rights pursuant to
Section 11 (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan or compensation arrangement of the Company or any such Subsidiary, or
any entity holding Common Shares for or pursuant to the terms of any such
plan or compensation arrangement), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Voting Power of the Company.
(b) Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company promptly shall give public notice of any such exchange; provided,
--------
however, that the failure to give, or any defect in, such notice shall not
-------
affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their
last
24
addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of Common Shares 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 the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange
of Rights as contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize additional shares
of Common Shares for issuance upon exchange of the Rights. In the event the
Company shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Common Shares, the Company
shall substitute, for each Common Share that would otherwise be issuable upon
exchange of a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share market price of one
Common Share as of the date of issuance of such Preferred Shares or fraction
thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Common Share. For
the purposes of this paragraph (d), the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(f) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall, at
------------------------
any time after the Distribution Date, propose (a) to pay any dividend payable
in stock of any class to the holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (b) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any other class or any
other securities, right or options, (c) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), or (d) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, (e) to effect the liquidation, dissolution or winding up of the
Company, or (f) to declare or pay any dividend on the Common Shares payable
in Common Shares or to effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares), then, in each such case, the Company shall give
to each holder of a Right, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for
25
the purposes of such stock dividend or distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed and such notice shall be so
given in the case of any action covered by clauses (a) or (b) above at least
10 days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other action,
at least 10 days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier. The failure to give notice
required by this Section 25 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.
In case the event set forth in Section 11(b) shall occur, then the
Company shall, as soon as practicable thereafter, give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(b) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent
by first-class mail, postage prepaid and deemed given upon receipt, addressed
(until another address is filed in writing with the Rights Agent) as follows:
The Laclede Group, Inc.
000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
UMB Bank, n. a.
000 Xxxxx Xxxx.
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry of the Company.
Section 27. Supplements and Amendments. The Company may from time to
--------------------------
time supplement or amend this Agreement without the approval of any holders
of Right Certificates in
26
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein, or to make any other provisions with respect to the Rights which the
Company may deem necessary or desirable, any such supplement or amendment to
be evidenced by a writing signed by the Company and the Rights Agent;
provided, however, that from and after such time as any Person becomes an
-------- -------
Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof to not less than the
greater of (i) any percentage greater than the largest percentage of the
Voting Power of the Company then known by the Company to be beneficially
owned by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan or compensation arrangement of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan or compensation arrangement) and (ii)
10%.
Section 28. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) 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 Common Shares).
Section 30. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. It is the intent of the parties hereto to enforce the remainder
of the terms, provisions, covenants and restrictions of this Agreement to the
maximum extent permitted by law.
Section 31. Governing Law. This Agreement and each Right Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Missouri 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 32. Counterparts. This Agreement may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions
hereof.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
Attest: THE LACLEDE GROUP, INC.
By: _________________________ By: ___________________________
Name: Name:
Title: Secretary Title:
Attest: UMB BANK, N. A.
By: _________________________ By: ___________________________
Name Name:
Title: Title:
28
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
THE LACLEDE GROUP, INC.
(Pursuant to Section 351.180 of the
General and Business Corporation
Law of the State of Missouri)
The Laclede Group, Inc., a corporation organized and existing under the
General and Business Corporation Law of the State of Missouri (hereinafter
called the "Company"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Company as required by the General
Corporation Law at a meeting duly called and held on August 23, 2001.
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Certificate of Incorporation, the Board of Directors hereby creates a series
of Preferred Stock, par value $ 25.00 per share, of the Company (the
"Preferred Stock"), and hereby states the designation and number of shares,
and fixed the relative rights, preferences, and limitations thereof as
follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 700,000. Such number of shares 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
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series A Preferred Stock.
A-1
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, par
value $1.00 per share (the "Common Stock"), of the Company, and of any other
junior 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 in cash on the first day of January, April, July and
October in 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 a 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 (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable
in shares of 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. In
the event the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) 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 (b) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Company shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1 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, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of
A-2
shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series 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 be not more than 60 days prior to the date fixed for
the payment thereof.
Section 3. Voting Rights. 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 the stockholders of the
Company. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) 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, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Company having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series 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 shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:
A-3
(i) declare or pay dividends, 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, 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 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 or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Company ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity 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 such shares upon
such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, 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
A-4
Series A Preferred Stock shall have received $100 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 shares of Common Stock, or (2) to the holders of 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 distributions made
ratably on the Series A Preferred Stock and all such 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. In the event the
Company shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) 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. In case the Company 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 and/or any other property, then in any such case
each share of Series A Preferred Stock shall at the same time be similarly
exchanged 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 and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) 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 shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all
series of any other class of the Company's Preferred Stock.
A-5
Section 10. Amendment. The Certificate of Incorporation of the
Company shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its Chief Executive Officer and attested by its
Secretary this day of _______________, 2001.
---------------------------------
Chief Executive Officer
Attest:
-------------------------------
Secretary
A-6
Exhibit B
[Form of Right Certificate]
Certificate No. R-__________________ ____________ Rights
NOT EXERCISABLE AFTER OCTOBER 1, 2011
OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE AGREEMENT.
Right Certificate
THE LACLEDE GROUP, INC.
This certifies that ___________________________________________________,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Agreement dated as of October 1, 2001 (the
"Rights Agreement") between The Laclede Group, Inc., a Missouri corporation
(the "Company"), and UMB Bank, n.a., a national banking corporation (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 p.m. St. Louis, Missouri time on October 1, 2011, at the shareholder
services office (or such office designated for such purpose) of the Rights
Agent, or its successor as Rights Agent, one one-hundredth of a fully paid,
nonassessable share of Series A Junior Participating Preferred Stock, par
value $25.00 per share, of the Company (the "Preferred Shares"), at a
purchase price of $90.00 per one one-hundredth of a Preferred Share (the
"Purchase Price") upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of one one-hundredths of
a Preferred Share which may be purchased upon exercise hereof) and the
Purchase Price set forth above, are the number and Purchase Price as of
October 1, 2001 based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
B-1
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the office of the Rights Agent and are also available upon
written request to the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the shareholder services office (or such office designated for
such purpose) of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of Preferred Shares
as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to
receive, upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price
of $.01 per Right or (ii) may be exchanged in whole or in part for shares of
the Company's Common Stock, par value $1.00 per share, or Preferred Shares.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may at the
election of the Company, be evidenced by depositary receipt), but, in lieu
thereof, a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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.
B-2
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ______________________, 2001.
Attest: THE LACLEDE GROUP, INC.
By: By:
------------------------------- -------------------------------
Name: Name:
----------------------------- -----------------------------
Title: Title:
---------------------------- ----------------------------
Countersigned:
UMB BANK, n.a.
By:
---------------------------------------------
Authorized Signature
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if
such holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
-------------------------------------------------------
hereby sells, assigns and transfers unto
------------------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________
Attorney to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: , 20___.
---------------------------
------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined in Securities and Exchange Commission Rule 17Ad-15 (17 CFR
240.17AD-15)).
B-4
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 20
----------------- -- --------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
B-5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights represented by the Right Certificate.)
To The Laclede Group, Inc.
The undersigned hereby irrevocably elects to exercise ___________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Name:
---------------------------------------------------------
Address:
------------------------------------------------------
------------------------------------------------------
Social security
or taxpayer identification
number:
--------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Name:
---------------------------------------------------------
Address:
------------------------------------------------------
------------------------------------------------------
Social security
or taxpayer identification
number:
------------------------------------------------------
Dated: , 20
--------------------- --
-----------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor
Institution (as defined in Securities and Exchange Commission Rule 17Ad-15
(17 CFR 240.17Ad-15)).
B-6
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 pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 20
--------------------- --
------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
NOTICE
------
The signature in the foregoing Form of Assignment or Form of Election to
Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed,
the Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
B-7
Exhibit C
THE LACLEDE GROUP, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On August 23, 2001, the Board of Directors of The Laclede Group, Inc.
(the "Company") declared a dividend of one preferred purchase right (a
"Right") for each outstanding share of common stock, par value $1.00 per
share, of the Company (the "Common Shares"). The dividend is payable on
October 1, 2001 to the stockholders of record on that date. The description
and terms of the Rights are set forth in an Agreement (the "Agreement")
between the Company and UMB Bank, n.a., as Rights Agent (the "Rights Agent").
Purchase Price
--------------
Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock
of the Company, par value $25.00 per share (the "Preferred Shares"), at a
price of $90.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment.
Flip-In
-------
In the event that any person or group of affiliated or associated
persons (an "Acquiring Person") acquires beneficial ownership of 20% or more
of the voting power of all the securities of the Company entitled to vote in
the election of directors (the "Voting Power"), each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereafter
be void), will thereafter have the right to receive upon exercise that number
of Common Shares having a market value of two times the exercise price of the
Right.
Flip-Over
---------
If the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are
sold after a person or group has become an Acquiring Person, each holder of a
Right (other than Rights beneficially owned by the Acquiring Person, which
will be void) will thereafter have the right to receive that number of shares
of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right.
Distribution Date
-----------------
The distribution date is the earlier of:
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(i) 10 business days following a public announcement that
a person or group of affiliated or associated persons have acquired
beneficial ownership of 20% or more of the outstanding Voting Power; or
(ii) 10 business days (or such later date as may be
determined by action of the Board of Directors of the Company prior to such
time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 20% or more of the
outstanding Voting Power.
Transfer and Detachment
-----------------------
Until the Distribution Date, the Rights will be evidenced, with respect
to any of the Common Share certificates outstanding as of the Record Date, by
such Common Share certificate with a copy of this Summary of Rights attached
thereto. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the Rights will be transferred with and only with the Common
Shares, and transfer of those certificates will also constitute transfer of
these Rights.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
Exercisability
--------------
The Rights are not exercisable until the Distribution Date. The Rights
will expire on October 1, 2011 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed
or exchanged by the Company, in each case, as described below.
Adjustments
-----------
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution in the event of stock
dividends, stock splits, reclassifications, or certain distributions with
respect to the Preferred Shares. The number of outstanding Rights and the
number of one one-hundredths of a Preferred Share issuable upon exercise of
each Right are also subject to adjustment if, prior to the Distribution Date,
there is a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares. With certain exceptions, no adjustment in
the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are integral multiples of
one one-hundredth of a
C-2
Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Shares on the last trading day
prior to the date of exercise.
Preferred Shares
----------------
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment made per
Common Share. Each Preferred Share will have 100 votes, voting together with
the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 100 times the amount received per Common Share.
These rights are protected by customary antidilution provisions.
The value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should, because of the nature of the
Preferred Shares' dividend, liquidation and voting rights, approximate the
value of one Common Share.
Exchange
--------
At any time after any person or group becomes an Acquiring Person, and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by the Acquiring Person, which will have
become void), in whole or in part, at an exchange ratio of one Common Share,
for one one-hundredth of a Preferred Share (subject to adjustment to prevent
dilution).
Redemption
----------
At any time prior to any person or group becoming an Acquiring Person,
the Board of Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time on such basis
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Amendments
----------
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) any percentage greater than the
C-3
largest percentage of the Voting Power of the Company then known to the
Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%.
Rights and Holders
------------------
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Further Information
-------------------
A copy of the Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to Form 8-A effective October 1, 2001. A copy of the
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 Agreement, which is incorporated herein by
reference.
C-4
