OGE ENERGY CORP.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
AS RIGHTS AGENT
----------------------------------
AMENDED AND RESTATED
RIGHTS AGREEMENT
DATED OCTOBER 10, 2000
TABLE OF CONTENTS
Section 1. Certain Definitions............................................................................2
Section 2. Appointment of Rights Agent....................................................................7
Section 3. Issuance of Right Certificates.................................................................8
Section 4. Form of Right Certificates....................................................................10
Section 5. Countersignature and Registration.............................................................12
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates..................................................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.................................14
Section 8. Cancellation and Destruction of Right Certificates............................................17
Section 9. Reservation and Availability of Shares of Preferred Stock.....................................17
Section 10. Preferred Stock Record Date...................................................................20
Section 11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase Price..................20
Section 12. Certification of Adjustments..................................................................37
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..........................37
Section 14. Fractional Rights and Fractional Shares.......................................................44
Section 15. Rights of Action..............................................................................45
Section 16. Agreement of Right Holders....................................................................46
Section 17. Right Certificate Holder Not Deemed a Shareowner..............................................47
Section 18. Concerning the Rights Agent...................................................................48
Section 19. Merger or Consolidation or Change of Name of Rights Agent.....................................49
Section 20. Duties of Right Agent.........................................................................50
Section 21. Change of Rights Agent........................................................................53
Section 22. Issuance of New Right Certificate.............................................................55
Section 23. Redemption....................................................................................56
Section 24. Notice of Proposed Action.....................................................................57
Section 25. Notices.......................................................................................59
Section 26. Supplements and Amendments....................................................................60
Section 27. Successors....................................................................................61
Section 28. Exchange......................................................................................61
Section 29. Benefits of this Rights Agreement.............................................................63
Section 30. Oklahoma Contract.............................................................................64
Section 31. Counterparts..................................................................................64
Section 32. Descriptive Headings..........................................................................64
Section 33. Severability..................................................................................64
Section 34. Determination and Actions by the Board of Directors, etc......................................64
Exhibit A - Article XII of Restated Certificate of Incorporation
Exhibit B - Form of Right Certificate
Exhibit C - Form of Summary of Amended and Restated Rights Agreement
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AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (this "Rights Agreement"
or this "Agreement"), dated October 10, 2000, between OGE ENERGY CORP., an
Oklahoma corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company (the "Rights Agent"), hereby
amends and restates the Rights Agreement dated August 7, 1995 between the
Company and The Liberty Bank and Trust Company of Oklahoma City, N.A., as
amended (the "Original Agreement").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on August 7, 1995:
(i) authorized and declared a dividend distribution of one right (a "Right")
for each share of the common stock, par value $.01 per share ("Common
Stock"), of the Company outstanding as of the close of business on August 8,
1995 (the "Record Date"), and authorized the issuance of the Rights as of the
Record Date, each Right representing the right to purchase one one-hundredth
(1/100) of a share of Series A Preferred Stock, par value $.01 per share, of
the Company having the voting powers, designation, preferences and relative
rights described in Article XII of the Company's Restated Certificate of
Incorporation set forth as Exhibit A hereto ("Preferred Stock") upon the
terms and subject to the conditions hereinafter set forth, and (ii) further
authorized the issuance of one Right with respect to each share of Common
Stock of the Company that shall become outstanding between the Record Date
and the Distribution Date (as defined herein);
WHEREAS, as a result of the two-for-one stock split paid to the
Company's shareowners on June 15, 1998, the number of Rights associated with
each share of Common Stock was adjusted pursuant to Section 11(p) hereof, and
each share of Common Stock is now accompanied
by one-half of a Right and each share of Common Stock of the Company that
shall become outstanding between the Record Date and the Distribution Date
shall be entitled to one-half of a Right, subject to further adjustment as
hereinafter provided;
WHEREAS, the Board of Directors of the Company on July 19, 2000
determined it to be in the best interests of the Company and its shareowners
to amend and restate the Original Agreement to extend its term for a period
of ten years and to make certain other changes to the terms of the Original
Agreement as set forth herein;
WHEREAS, ChaseMellon Shareholder Services, L.L.C. has succeeded The
Liberty Bank and Trust Company of Oklahoma City, N.A., as Rights Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner
of securities representing 20% or more of the Voting Power (other than as a
result of a Permitted Offer) or who 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;
PROVIDED, HOWEVER, that the term "Acquiring Person" shall not include an
Exempt Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
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(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule l2b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, as in
effect on the date hereof.
(d) Except in the case of an underwriter acting in such
capacity by agreement with the Company, a Person shall be deemed the
"Beneficial Owner" of, and shall be deemed to "beneficially own", any
securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right or obligation to acquire
(whether such right or obligation is exercisable or effective
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise;
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (1) securities tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (2) securities which such Person
would have a right to acquire on the exercise of Rights at any time
prior to the occurrence of a Triggering Event or (3) securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event if such Rights were acquired by such Person or any
of such Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof ("Original
Rights") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights; or (B) the
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right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); PROVIDED, HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any securities under this clause (B) if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given in response to
a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of 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 (whether or not in writing) for the
purpose of acquiring, holding, voting (except as described in clause
(B) of subparagraph (ii) of this paragraph (d)) or disposing of any
securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Oklahoma City time, on such date; PROVIDED, HOWEVER, that if such date is not
a Business Day, it shall mean 5:00 P.M., Oklahoma City time, on the next
succeeding Business Day.
(g) "Common Stock", when used with reference to the Company,
shall mean the common stock (presently par value $.01 per share) of the
Company. "Common Stock", when used with reference to any Person other than
the Company, shall mean the capital stock with the greatest voting power or
the equity securities or other equity interest having the power to control
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or direct the management of such Person or, if such Person is a Subsidiary of
or is controlled by another Person, the Person which ultimately controls such
first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(i) "Company" shall have the meaning set forth in the preamble.
(j) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(o) "Exchange Ratio" shall have the meaning set forth in
Section 28(a) hereof.
(p) "Exempt Person" shall mean:
(i) Oklahoma Gas and Electric Company, the Company,
any subsidiary of the Company, any employee benefit plan or employee
stock plan of the Company, of any subsidiary of the Company or of
Oklahoma Gas and Electric Company, or any Person or entity
organized, appointed, established or holding Common Stock or other
securities of the Company for or pursuant to the terms of any such
plan; and
(ii) any Person who becomes an Acquiring Person solely
by virtue of a reduction in the number of outstanding shares of
Common Stock; PROVIDED, HOWEVER, that such Person shall not be an
Exempt Person if, subsequent to such reduction, such Person shall
become the Beneficial Owner of, or commence a tender or exchange
offer for, any additional shares of Common Stock.
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(q) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(s) "NYSE" shall mean the New York Stock Exchange.
(t) "Permitted Offer" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(u) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, joint venture, trust, association,
unincorporated organization or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(v) "Preferred Stock" shall have the meaning set forth in the
preamble.
(w) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(x) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof, except as otherwise provided in Section 11(a)(ii) and
Section 13(a) hereof.
(y) "Record Date" shall have the meaning set forth in the
preamble.
(z) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(aa) "Right" shall have the meaning set forth in the preamble.
(bb) "Rights Agent" shall have the meaning set forth in the
preamble.
(cc) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof
(dd) "Section 11(a)(ii) Event" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(ee) "Section 13 Event" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.
(ff) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(gg) "Stock Acquisition Date" shall mean the first date of a
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such or such earlier
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date as a majority of the Board of Directors shall become aware of the
existence of an Acquiring Person.
(hh) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ii) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or
other persons performing similar functions are beneficially owned, directly
or indirectly, by such Person and any corporation or other entity that is
otherwise controlled by such Person.
(jj) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(kk) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(ll) "Triggering Event" shall mean any event described in
Section 11(a)(ii) or Section 13(a) hereof
(mm) "Voting Power" shall mean the voting power of all
securities of the Company then outstanding generally entitled to vote for the
election of directors of the Company.
Any determination required by the definitions contained in this
Section 1 shall be made by the Board of Directors of the Company in its good
faith judgment, which determination shall be binding on the Rights Agent and
the holders of the Rights.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such Co-Rights Agent.
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Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the Close of Business on the earlier to occur of (i) the
tenth day following the Stock Acquisition Date or (ii) the tenth day after the
date of the commencement by any Person (other than an Exempt Person) of, or the
first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer, upon the successful
consummation of which such Person, together with its Affiliates and Associates,
would be the Beneficial Owner of Common Stock and/or other securities
representing 20% or more of the Voting Power (irrespective of whether any shares
are actually purchased pursuant to such offer) (the earliest of such dates,
including any date that is after the date of this Agreement and prior to the
Record Date, being referred to herein as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of Section 3(c) hereof) by
the certificates for the Common Stock registered in the names of the holders of
the Common Stock and not by separate certificates, and (y) each Right (or
portion thereof) will be transferable only in connection with the transfer of a
share (subject to adjustment as hereinafter provided) of Common Stock. As soon
as practicable after the Distribution Date, the Company shall promptly notify
the Rights Agent of the occurrence thereof and, if the Rights Agent is not then
also the transfer agent and registrar for the Common Stock, provide the Rights
Agent with the names and addresses of all record holders of the Common Stock,
and the Rights Agent will send, by first-class, postage prepaid mail, to each
record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a certificate in substantially the form of Exhibit B hereto ("Right
Certificate") evidencing one Right for each two shares of Common Stock so held,
subject to adjustment as herein provided. In the event that a further adjustment
in the number of Rights per share of Common Stock has
8
been made pursuant to Section 11(i) or Section 11(p) hereof, at the time of
distribution of the Right Certificate, the Company may elect to make the
necessary and appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As
of and after the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) As soon as practicable following the date hereof, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"),
as may be amended from time to time to reflect amendments to the Rights
Agreement, by postage prepaid mail, to each record holder of Common Stock as
of the Close of Business on the date hereof, at the address of such holder
shown on the records of the Company.
(c) With respect to certificates for Common Stock outstanding
as of the Record Date, until the Distribution Date (or, if earlier, the
Expiration Date), the Rights will be evidenced by certificates for Common
Stock registered in the names of the holders thereof, together with a copy of
the Summary of Rights, and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until the
Distribution Date (or, if earlier, the Expiration Date), the surrender for
transfer of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the surrender for transfer of the Rights associated with the
Common Stock represented thereby.
(d) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the
9
earlier of the Distribution Date or the Expiration Date and, in certain
circumstances provided for in Section 22 hereof, may be issued in respect of
shares of Common Stock that become outstanding after the Distribution Date.
Certificates representing such shares of Common Stock shall also be deemed to
be certificates for Rights, and certificates representing such shares of
Common Stock issued after the date hereof shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in an Amended and Restated
Rights Agreement between OGE Energy Corp. and ChaseMellon
Shareholder Services, L.L.C. as Rights Agent, dated October
10, 2000, as may be 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 office of OGE Energy Corp. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. OGE Energy Corp. will
mail to the holder of record of this certificate a copy of the
Rights Agreement, without charge, within five days after
receipt of a written request therefor. Under certain
circumstances, as provided in the Rights Agreement, Rights
issued to or beneficially owned by Acquiring Persons or their
Associates or Affiliates (as defined in the Rights Agreement)
or any purported subsequent holder of such Rights will become
null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the Distribution Date, be evidenced by such certificates alone, and registered
holders of Common Stock shall also be the registered holders of the associated
Rights and the surrender for transfer of any such certificate shall also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented thereby.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and if
issued, shall be substantially in
10
the form set forth in 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 (provided that such
marks, legends, summaries and endorsements do no affect the rights, duties or
responsibilities of the Rights Agent) and as are not inconsistent with the
provisions of this Rights Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Sections 11 and
22 hereof, the Right Certificates evidencing the Rights, whenever issued,
shall be dated as of the Record Date, and on their face Right Certificates
shall entitle the holders thereof to purchase such number of one
one-hundredth (1/100) of a share of Preferred Stock, or other securities or
property as provided herein, as the same may from time to time be adjusted as
provided herein, at the Purchase Price.
(b) Notwithstanding any other provisions of this Rights
Agreement, any Right Certificate that represents Rights that may be or may
have been at any time on or after the Distribution Date beneficially owned by
an Acquiring Person or any Affiliate or Associate thereof (or any purported
transferee of such Rights) may have impressed on, printed on, written on or
otherwise affixed to it the following legend:
The beneficial owner of the Rights represented by this Right
Certificate may be an Acquiring Person or an Affiliate or
Associate (as defined in the Rights Agreement) of an Acquiring
Person or a subsequent holder of such Right Certificate
beneficially owned by such Persons. Accordingly, under certain
circumstances as provided in the Rights Agreement, this Right
Certificate and the Rights represented hereby will be null and
void.
The provisions of this Rights Agreement shall be operative whether or
not the foregoing legend is imprinted on any such Right Certificate. The Company
shall give notice to the Rights
11
Agent promptly after it becomes aware of the existence of any Acquiring
Person or any Associate or Affiliate thereof.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be signed or signed by facsimile
on behalf of the Company by the Chairman or President and the Secretary or
Treasurer or an Assistant Secretary or Assistant Treasurer, and shall have
affixed thereto the Company's seal or a facsimile thereof. The Right
Certificates shall be countersigned by the Rights Agent, manually, or where
permitted, in facsimile, and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates (either manually or by facsimile) 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 person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its 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 evidenced on its face by each of the Right
Certificates, the date of each of the Right Certificates, and the certificate
numbers for each of the Right Certificates.
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Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 14(b) and the last three
sentences of Section 11(a)(ii) hereof, at any time after the Close of Business
on the Distribution Date and at or prior to the Close of Business on the
Expiration Date, any Right Certificate or Certificates may be (i) transferred or
(ii) split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer any Right Certificate shall
surrender the Right Certificate at the office or offices of the Rights Agent
designated for such purpose, with the form of assignment on the reverse side
thereof duly endorsed (or enclose with such Right Certificate a written
instrument of transfer in a form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his or her attorney
duly authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be split up,
combined or exchanged, along with such other and further documentation as the
Rights Agent or the Company may require, at the office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
properly completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled
13
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. The Rights
Agent shall have no duty or obligation under this Section 6 or any other
similar provision of this Agreement unless and until it is satisfied that all
such taxes and/or governmental charges have been paid in full.
(b) Upon receipt by the Company and the Rights Agent of evidence
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 satisfactory to them, and, if requested by the Company, reimbursement
to the Company of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will execute and deliver a new Right Certificate of like tenor to the
Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to the last three sentences of Section 11(a)(ii)
hereof or as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole at any time after
the Distribution Date, or in part from time to 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 (with such signature duly guaranteed),
to the Rights Agent at the office or offices of the Rights Agent designated for
such purpose, together with payment of the Purchase Price with respect to each
Right exercised, subject to adjustment as hereinafter provided, at or prior to
the time (the "Expiration Date") which is the earlier of (i) the Close of
Business on December 11, 2010 ("Final Expiration Date"), (ii) the action of the
Board
14
of Directors of the Company ordering the redemption of Rights pursuant to
Section 23 hereof or (iii) the action of the Board of Directors of the
Company ordering the exchange of Rights pursuant to Section 28 hereof.
(b) The purchase price for each one one-hundredth (1/100) of a
share of Preferred Stock (the "Purchase Price") issuable pursuant to the
exercise of a Right shall initially be one hundred and thirty dollars ($130.00)
and, along with the number of shares of Preferred Stock or other securities or
consideration to be acquired upon exercise of a Right, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof. The
Purchase Price shall be payable in lawful money of the United States of America,
in accordance with Section 7(c) hereof.
(c) Except as provided in Section 7(d) hereof, 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 or so much
thereof as is necessary for the shares to be purchased and an amount equal to
any applicable tax or governmental charge, by cash, certified check or official
bank check payable to the order of the Company or the Rights Agent, the Rights
Agent, subject to Section 20(i) hereof, shall thereupon promptly (i) (A)
requisition from any transfer agent for the Preferred Stock certificates (or
certificates representing other securities, as the case may be) for the number
of shares of Preferred Stock (or other securities, as the case may be) so
elected to be purchased, and the Company will comply and hereby authorizes and
directs such transfer agent to comply with all such requests or (B) if the
Company, in its sole discretion, shall have elected to deposit the shares of
Preferred Stock or other securities issuable upon exercise of the Rights
hereunder into a depositary, requisition from the depositary agent depositary
receipts representing such number of one one-hundredth of a
15
share of Preferred Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock or other securities represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company will direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14(b) hereof and
(iii) promptly after receipt of such Preferred Stock certificates (or
certificates representing other securities, as the case may be) 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, when necessary to comply with this
Agreement, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. In the event that the
Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) or Section 28
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when necessary to comply with this Agreement. In
addition, in the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii), the Rights Agent shall return such Right Certificate to
the registered holder thereof after imprinting, stamping or otherwise
indicating thereon that the rights represented by such Right Certificate no
longer include the rights provided by Section 11(a)(ii) of the Rights
Agreement and if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii).
(d) 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
16
holder upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) properly completed and
signed the certificate contained in the form of election to purchase set
forth on the reverse side of the Right Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in 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 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. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED
STOCK.
(a) The Company covenants and agrees that at all times it will
cause to be reserved and kept available, out of and to the extent of its
authorized and unissued shares of Preferred Stock not reserved for another
purpose (and, following the occurrence of a Triggering Event, other securities)
or shares of Preferred Stock not reserved for another purpose (and, following
the occurrence of a Triggering Event, other securities) held in its treasury,
the number of shares of
17
Preferred Stock (and, following the occurrence of a Triggering Event, other
securities) that, as provided in this Agreement, will be sufficient to permit
the exercise in full of all outstanding Rights; PROVIDED, HOWEVER, that the
Company shall not be required to reserve and keep available shares of Common
Stock or other securities sufficient to permit the exercise in full of all
outstanding Rights pursuant to the adjustments set forth in Section
11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless, and only to the
extent that, the Rights become exercisable pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be listed
by the NYSE or any other securities exchanges, upon notice of issuance upon such
exercise, and (ii) if then necessary to permit the offer and issuance of such
shares of Preferred Stock (and, following the occurrence of a Triggering Event,
other securities), register and qualify such shares of Preferred Stock (and,
following the occurrence of a Triggering Event, other securities) under the
Securities Act and any applicable state securities or "blue sky" laws (to the
extent exemptions therefrom are not available), cause the related registration
statement and qualifications to become effective as soon as possible after
filing and keep such registration statement and qualifications effective until
the Expiration Date. The Company may temporarily suspend, for a period of time
not to exceed 90 days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall give prompt written
notice to the Rights Agent and shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension
18
is no longer in effect (with notice thereof to the Rights Agent).
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred Stock (and
following the occurrence of a Triggering Event, other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates of such
shares (subject to payment of the Purchase Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares in
accordance with applicable law.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any shares of Preferred
Stock (or other securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any tax or charge 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 for Preferred Stock (or
other securities, as the case may be) upon exercise of Rights in a name other
than that of, the registered holder of the Right Certificate, and the Company
shall not be required to issue or deliver a Right Certificate or certificate for
Preferred Stock (or other securities, as the case may be) to a Person other than
such registered holder until any such tax or charge shall have been paid (any
such tax or charge 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 or charge is due.
19
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for shares of Preferred Stock (or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such rights
was duly surrendered and payment of the Purchase Price (and any applicable taxes
or charges) was made; provided, however, that if the date of such presentation
and payment is a date upon which the Preferred Stock 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 Stock transfer books of the Company are
open.
Section 11. ADJUSTMENTS TO NUMBER AND KIND OF SHARES, NUMBER OF
RIGHTS OR PURCHASE PRICE. The number and kind of shares subject to purchase
upon the exercise of each Right, the number of Rights outstanding and the
Purchase Price are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time
after the Record Date (A) declare or pay any dividend on Preferred
Stock payable in shares of Preferred Stock, (B) subdivide or split the
outstanding shares of Preferred Stock into a greater number of shares,
(C) combine or consolidate the outstanding shares of Preferred Stock
into a smaller number of shares or effect a reverse split of the
outstanding shares of Preferred Stock or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price
in effect at the time of the record date
20
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or capital stock, as
the case may be, which, if such Right had been exercised immediately
prior to such date, the holder thereof would have owned, or would be
deemed to have owned, upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) In the event any Person at any time after the date of
the Rights Agreement becomes an Acquiring Person, other than pursuant
to a tender or exchange offer for all outstanding shares of Common
Stock at a price and on terms that at least a majority of the members
of the Board of Directors of the Company who are not officers of the
Company and who are not Acquiring Persons or Affiliates, Associates,
nominees or representatives of an Acquiring Person, determines prior to
the time such tender or exchange offer is made to be both adequate and
otherwise in the best interests of the Company, its shareowners (other
than the Acquiring Person or an Affiliate or Associate thereof on whose
behalf the offer is being made), and any other constituency which may
appropriately be considered (a "Permitted Offer"), or any Exempt Person
who is the Beneficial Owner of Common Stock and/or other securities
representing 20% or more of
21
the Voting Power shall fail to continue to qualify as an Exempt Person
(either of such events being herein referred to as a "Section
11(a)(ii) Event"), then, subject to Section 23(a) hereof, and except
as otherwise provided in this Section 11, each holder of a Right
shall thereafter have a right to receive for each Right, upon
exercise thereof in accordance with the terms of this Rights
Agreement and payment of the Purchase Price, in lieu of shares of
Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (such product, following such
first occurrence, shall be referred to as the "Purchase Price" with
respect to each Right for all purposes of this Agreement) by 50% of
the Current Market Price per share of Common Stock on the date of
such first occurrence (such number of shares is herein called the
"Adjustment Shares"); PROVIDED that the Purchase Price and the
number of Adjustment Shares shall be further adjusted as provided in
this Agreement to reflect any events occurring after the date of
such first occurrence; and PROVIDED, HOWEVER, that if the
transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof,
then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).
Notwithstanding the foregoing, from and after the occurrence of a
Section 11(a)(ii) Event, any Rights that are or were beneficially
owned by (x) the Acquiring Person or any Associate or Affiliate of
the Acquiring Person, (y) a transferee of such Acquiring Person or
any Associate or Affiliate who became a transferee after the
Acquiring Person became such or (z) a
22
transferee of such Acquiring Person or any such Associate or Affiliate
who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any Person
with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer which the Board
of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the
provisions of this paragraph, and subsequent transferees of such
Persons, shall be null and void without any further action and any
purported holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this
Rights Agreement. The Company shall use all reasonable effort to
ensure that the provisions of this Section 11(a)(ii) and of Section
4(b) hereof are complied with, but neither the Company nor the
Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of the failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. No Right
Certificate shall be issued pursuant to Section 3 hereof that
represents Rights beneficially owned by an Acquiring Person whose
Rights would be null and void pursuant to the provisions of this
paragraph or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any
Rights to any Acquiring Person whose Rights would be null and void
pursuant to the provisions of this paragraph 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 whose Rights would
be null and void pursuant to the provisions of this paragraph shall
be cancelled.
23
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) and
the Rights shall become so exercisable, to the extent permitted by
applicable law and any agreements in effect on the date hereof to which
the Company is a party, the Company shall: (A) determine the value of
the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") and (B) with respect to each Right, upon exercise of
such Right, issue shares of Common Stock to the extent available for
the exercise in full of such Right and, to the extent shares of Common
Stock are not so available, make adequate provision to substitute for
the Adjustment Shares not received upon exercise of such Right (1)
other equity securities of the Company, including, without limitation,
shares, or units of shares, of preferred stock irrespective of the
voting rights associated with any units or shares of preferred stock,
which the Board of Directors of the Company has deemed to have
substantially the same value as shares of Common Stock (such shares or
units of shares of preferred stock are herein called "Common Stock
Equivalents"), (2) debt securities of the Company, (3) other assets,
(4) a reduction in the Purchase Price, (5) cash, or (6) any combination
of the foregoing, having a value which, when added to the value of the
shares of Common Stock actually issued upon exercise of such Right,
shall have an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized independent
investment banking firm; PROVIDED, HOWEVER, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B)
24
above within 30 days following the later of the Stock Acquisition Date
or the date on which the Company's right of redemption pursuant to
Section 23(a) expires then, to the extent permitted by applicable law
and any agreement in effect on the date hereof to which the Company is
a party, the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) or Common Stock
Equivalents and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the excess of the Current Value over the
Purchase Price; PROVIDED, FURTHER, that, notwithstanding anything
contained herein to the contrary, the Board of Directors may determine
that the aggregate value of any cash, debt securities and other assets
issued or distributed by the Company upon exercise of the Rights shall
not exceed the amount of cash that the Company would be entitled to
receive in payment of the Purchase Price upon exercise in full of the
then exercisable Rights; and PROVIDED, HOWEVER, that the Company shall
have the option, but not the obligation, to require actual payment of
the Purchase Price upon exercise of a Right only to the extent that the
Purchase Price exceeds the amount of cash that the holder of such Right
would be entitled to receive from the Company pursuant to this Section
11(a)(iii). If the Board of Directors of the Company shall determine in
good faith that it is likely that sufficient additional shares of
Common Stock or Common Stock Equivalents could be authorized for
issuance upon exercise in full of the Rights, the 30 day period set
forth above may be extended to the extent necessary, but not more than
90 days, in order that the Company may seek shareowner approval for the
authorization of such additional shares (such 30 day period, as it may
be extended, is herein called the "Substitution Period"). To the extent
that the Company
25
determines that some action need be taken pursuant to the first and/or
second sentence of this Section 11(a)(iii), the Company (x) shall
provide, subject to the last three sentences of Section 11(a)(ii)
hereof, that such action shall apply uniformly to all outstanding and
exercisable Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any
such suspension, the Company shall give prompt written notice to the
Rights Agent and shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect (with notice thereof to the Rights Agent). For purposes of
this Section 11(a)(iii), the value of the Common Stock shall be the
Current Market Price per share of the Common Stock on the Stock
Acquisition Date and the per share or per unit value of any Common
Stock Equivalent shall be deemed to equal the Current Market Price
per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate
the right to receive Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all
holders of Common or Preferred Stock entitling them to subscribe for or
purchase (for a period expiring within 45 calendar days after such
record date) Preferred Stock, shares having the same rights, privileges
and preferences as the Preferred Stock ("Equivalent Preferred Stock")
or securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or Equivalent Preferred
Stock (or having a
26
conversion price per share, if a security convertible into Preferred
Stock or Equivalent Preferred Stock) less than the current market price
per share of Preferred Stock on such record date, the Purchase Price
to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record date,
plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock
and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the
denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such
non-cash consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Shares of
Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever
such a record date is fixed and, in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of
indebtedness, cash
27
(other than an ordinary dividend), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current
market price per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such current market
price per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices per
share of Common Stock for the 30 consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof,
the "Current Market Price" per share of the Common Stock on any date
shall be deemed to be the average of the daily closing prices per share
of the Common Stock for the 10 consecutive Trading Days immediately
following such date; PROVIDED, HOWEVER, that in the event that the
Current
28
Market Price per share of the Common Stock is determined during a
period following the announcement by the issuer of such Common Stock
of (x) any dividend or distribution on Common Stock (other than a
regular quarterly cash dividend and other than the Rights) or (y) any
subdivision, combination or reclassification of Common Stock, and the
ex-dividend date for such dividend or distribution or the record date
for such subdivision, combination or reclassification occurs prior to
the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above, then, and in each such case, the Current
Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the NYSE or, if the shares of Common Stock are not listed or
admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc., Automated Quotations System or such other
system then in use, or, if on any such date the shares of Common Stock
are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker
29
is making a market in the Common Stock, the fair value of such shares
on such date as determined in good faith by the Board of Directors of
the Company shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so
listed or traded, "Current Market Price" per share shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for
all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share (or one one-hundredth of a share) of
Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the current market price per share
(or one one-hundredth of a share) of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
200 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date hereof) multiplied by the Current
Market Price per share of the Common Stock and the "current market
price" per one one-hundredth of a share of Preferred Stock shall be
equal to twice the Current Market Price per share of the Common Stock
(as appropriately adjusted). If
30
neither the Common Stock nor the Preferred stock is publicly held or
so listed or traded, "current market price" per share of the Preferred
Stock shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one ten-thousandth of a share, as
the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates
such adjustment, or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(i),
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares of
Preferred Stock contained in Xxxxxxx 00(x), (x), (x), (x), (x), (x), (x),
(x), (x), (x) and (p) hereof, and the provisions of Sections 7, 9, 10, 13 and
14 hereof with respect to the Preferred Stock shall apply on like terms to
any such other shares.
31
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of fractional or whole
shares of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
fractional or whole shares of Preferred Stock (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (x) the number of fractional or
whole shares covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price or any adjustment to the number of shares of Preferred
Stock for which a Right may be exercised, to adjust the number of Rights, in
lieu of any adjustment in the number of shares of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of
fractional or whole shares of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price. The Company
32
shall give prompt written notice to the Rights Agent and 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 date thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 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 may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of shares or fraction of a share which
were expressed in the initial Right Certificates issued hereunder.
33
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any of the shares of
Preferred Stock, Common Stock or other securities issuable upon exercise of the
Rights, the Company shall take any corporate action, including using its best
efforts to obtain any required shareowner approvals, which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock, Common Stock or
other securities at such adjusted Purchase Price. If upon any exercise of the
Rights, a holder is to receive a combination of Common Stock and Common Stock
Equivalents, a portion of the consideration paid upon such exercise, equal to at
least the then par value, if any, of a share of Common Stock of the Company,
shall be allocated as payment for each share of Common Stock of the Company so
received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the shares of Preferred Stock and/or other securities of the Company, if any,
issuable upon such exercise over and above the shares of Preferred Stock and/or
other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares of Preferred Stock and/or other securities upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly
34
required by this Section 11, as and to the extent that in their good faith
judgment the Board of Directors of the Company shall determine to be advisable
in order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance for cash of any shares of Preferred Stock at less than the current
market price, (iii) issuance for cash of shares of Preferred Stock or securities
which by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such shareowners.
(n) The Company covenants and agrees that it shall not at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company), (ii) merge with or into any other Person (other than
a Subsidiary of the Company) or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to, any other Person or
Persons (other than the Company and/or any of its Subsidiaries), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the shareowners of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates or (z) the form or
nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights. The Company shall not consummate any such
35
consolidation, merger, sale or transfer unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Record Date and prior to
the Distribution Date (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. As a result of a
two-for-one stock split paid to the Company's shareowners on June 15, 1999 and
the adjustment made pursuant to this Section 11(p), one-half of a Right is
currently associated with each share of Common Stock as of the date hereof.
36
Section 12. CERTIFICATION OF ADJUSTMENTS. Whenever an adjustment is
made as provided in Sections 11 and 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the
facts giving rise to such adjustment, (b) promptly file with the Rights Agent
and with each transfer agent for the Common Stock a copy of such certificate and
(c) mail a brief summary thereof to each holder of record of a Right Certificate
(or, if prior to the Distribution Date, to each holder of record of a
certificate representing shares of Common Stock) in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
give such notice shall not affect the validity of or the force or effect of or
the requirement for such adjustment. The Rights Agent shall be fully authorized
and protected in relying on any certificate prepared by the Company pursuant to
Sections 11 and 13 and on any adjustment therein contained, and shall have no
duty with respect to and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such a certificate. Any
adjustment to be made pursuant to Sections 11 and 13 of this Rights Agreement
shall be effective as of the date of the event giving rise to such adjustment.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, at any time on or after the Stock
Acquisition Date, directly or indirectly, (i) the Company shall consolidate
with, or merge with and into, any other Person or Persons (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) and the Company shall not be the surviving or continuing corporation of
such consolidation or merger or (ii) any Person or Persons (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with and into the Company, and the
Company shall be the continuing or surviving
37
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
of the Company shall be changed into or exchanged for stock or other securities
of any other Person or of the Company or cash or any other property or (iii) the
Company or one or more of its Subsidiaries shall sell or otherwise transfer to
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) or any Affiliate or Associate of such
Person, in one or more transactions, or the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) in one or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), then, on the first occurrence of any such
event, proper provision shall be made so that (A) each holder of record of a
Right (except as otherwise provided in the last three sentences of Section
11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise
thereof and payment of the then current Purchase Price in accordance with the
terms of this Rights Agreement, in lieu of Preferred Stock, such number of
shares of validly issued, fully paid and nonassessable and freely tradable
Common Stock of the Principal Party (as defined herein) not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event hereof has occurred prior to
the first occurrence of a Section 13 Event, multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section 11(a)(ii) Event
by the number of one one-hundredths of a share of Preferred Stock for which a
right was exercisable immediately prior
38
to such first occurrence of a Section 11(a)(ii) Event) and (2) dividing that
product (such product, following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for all purposes of this Agreement)
by 50% of the Current Market Price (determined as provided in Section 11(d)
hereof) per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event (or the fair market value on such date of
other securities or property of the Principal Party, as provided for herein);
PROVIDED that the Purchase Price and the number of shares of Common Stock of
such Principal Party issuable upon exercise of each Right shall be further
adjusted as provided in this Agreement to reflect any events occurring after the
date of the first occurrence of a Section 13 Event; (B) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event all the obligations and duties of the Company pursuant to this Rights
Agreement; (C) the term "Company" for all purposes of this Rights Agreement
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall only apply
to such Principal Party following the first occurrence of a Section 13 Event;
and (D) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9 hereof) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
PROVIDED, HOWEVER, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase Price,
such cash, shares, rights, warrants and other property
39
which such holder would have been entitled to receive had he or she, at the time
of such transaction, owned the shares of Common Stock of the Principal Party
purchasable upon the exercise of a Right, and such Principal Party shall take
such steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares, rights, warrants and other
property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of the securities into which shares of Common Stock of
the Company are converted in such merger or consolidation or, if there
is more than one such issuer, the issuer the Common Stock of which has
the greatest market value or (B) if no securities are so issued, (x)
the Person that is the other party to the merger and that survives said
merger or, if there is more than one such Person, the Person the Common
Stock of which has the greatest market value, (y) if the Person that is
the other party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it survives) or
(z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of
the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred, or if the
Person receiving the greatest portion of
40
the assets or earning power cannot be determined, whichever of such
Persons as is the issuer of Common Stock having the greatest market
value of shares outstanding;
PROVIDED, HOWEVER, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act, and (1) such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, (2) if such Person is a
Subsidiary, directly or indirectly, or more than one Person, the Common Stocks
of two or more of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest market value of shares outstanding and (3) in case
such Person is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such Person were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Rights Agreement as the same shall
have been assumed
41
by the Principal Party pursuant to Sections 13(a) and (b) hereof and further
providing that as soon as practicable after executing such agreement pursuant to
this Section 13, the Principal Party will:
(i) Prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date, and similarly comply
with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange,
to list (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on such securities exchange
and, if the Common Stock of the Principal Party shall not be listed on
a national securities exchange, to cause the Rights and the securities
purchasable upon exercise of the Rights to be listed by the NYSE or
another national securities exchange;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act; and
(iv) obtain waivers of any rights of the first refusal or
preemptive rights in respect of the shares of Common Stock of the
Principal Party subject to purchase upon exercise of outstanding
Rights.
42
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights shall thereafter continue to be exercisable
in the manner described in Section 13(a). The provisions of this Section 13
shall similarly apply to all successive Section 13 Events.
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its charter or Bylaws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Current Market Price
(determined pursuant to Section 11(d) hereof) or par value per share or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of this Section 13, then, in
such event, the Company hereby agrees with each holder of Rights that it shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction; provided, however, pursuant to Section 26 hereof, that
the prior written consent of the Rights Agent must be obtained in connection
with any such supplemental agreement that alters the rights, duties or
obligations of the Rights Agent.
43
(e) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(i) and (ii) of Section 13(a) if: (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a Permitted
Offer (or a wholly owned subsidiary of any such Person or Persons); (ii) the
price per share of Common Stock offered in such transaction is not less than the
price per share of Common Stock paid to all holders of Common Stock whose shares
were purchased pursuant to such Permitted Offer, and (iii) the form of
consideration being offered to the remaining holders of Common Stock pursuant to
such transaction is the same as the form of consideration paid pursuant to such
Permitted Offer. Upon consummation of any such transaction contemplated by this
Section 13(e), all Rights hereunder shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there may be paid to the holders of record 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 then current market
value of a whole Right. For the purposes of this Section 14(a), the then current
market value of a Right shall be determined in the same manner as the Current
Market Price of a share of stock shall be determined pursuant to Section 11(d)
hereof.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (or other securities, as the case may be) upon exercise of
the Rights or to distribute certificates which evidence fractional shares.
Fractions of shares of Preferred Stock in integral multiples of one
one-hundredth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company
44
and a depositary selected by it, provided that such agreement shall provide
that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as Beneficial Owners of
the shares of Preferred Stock represented by such depositary receipts, and
provided, further, that the Company shall promptly notify the Rights Agent of
any such election pursuant to this Section 14(b). In lieu of issuing
fractions of shares of Preferred Stock (or other securities, as the case may
be), there may be paid to the holders of record of Right Certificates at the
time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the then current market value of a share
of Preferred Stock (or other securities, as the case may be). For purposes of
this Section 14(b), the then current market value of a share of Preferred
Stock (or other securities, as the case may be) shall be the current market
price thereof as determined pursuant to Section 11(d) hereof.
(c) The holder of a Right by the acceptance of a Right expressly
waives his or her right to receive any fractional Right or any fractional shares
upon exercise of a Right. The Rights Agent shall have no duty or obligation with
respect to this Section 14 unless and until it has received specific
instructions (and sufficient cash, if required) from the Company with respect to
its duties and obligations under such Section.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, except those rights of action vested in the Rights Agent
pursuant to Section 28 and Section 20 hereof, are vested in the respective
holders of record of the Right Certificates (and, prior to the Distribution
Date, the holders of record of the Common Stock); and any holder of record of
any Right Certificate (or, prior to the Distribution Date, the holders of record
of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, the holders
of record of the Common Stock), may, in his or her own
45
behalf and for his or her own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company or any other
Person 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, accordingly,
that they will be entitled to specific performance of the obligations under,
and injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and such other and
further documentation as the Rights Agent may reasonably require;
(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 Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent or the transfer agent
of
46
the Common Stock) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company, its directors, officers, employees and agents, nor the
Rights Agent shall have any liability to any holder of a Right or other Person
as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree, judgment or ruling (whether interlocutory or final) issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREOWNER. No
holder of a Right, as such, shall be entitled to vote, receive dividends in
respect of or be deemed for any purpose to be the holder of Preferred Stock or
any other securities of the Company which may at any time be issuable upon the
exercise of the Rights, 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 shareowner of the Company or any right to vote for
the election of directors or upon any matter submitted to shareowners at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareowners, or to receive
dividends or subscription rights in respect of any such stock or securities, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
47
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, delivery, acceptance,
administration, execution and amendment of this Rights 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, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense incurred without gross negligence, bad faith or willful misconduct (each
as finally determined by a court of competent jurisdiction), or breach of this
Rights Agreement on the part of the Rights Agent for any action taken, suffered
or omitted to be taken by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement or the exercise or performance of its
duties hereunder, including, without limitation, the cost and expenses of
defending against any claim of liability in the premises. The indemnity provided
herein shall survive the termination of this Agreement and the termination and
the expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Rights Agent be
liable for special, punitive, indirect, incidental or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Rights Agent has been advised of the possibility of such loss or
damage. Any liability of the Rights Agent under this Agreement shall be limited
to the amount of fees paid by the Company to the Rights Agent.
(b) The Rights Agent shall be authorized to rely on, shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with
48
acceptance and administration of this Rights Agreement in reliance upon any
Right Certificate, certificate for Common Stock or Preferred Stock or 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, guaranteed, verified
or acknowledged, by the proper person or persons. The Rights Agent shall not
be deemed to have any duty or notice unless and until the Company has
provided the Rights Agent with actual written notice.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services' business of the Rights Agent or any successor Rights Agent
shall be the successor to the Rights Agent under this Rights 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 Person would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In the
case at the time such successor Rights Agent shall succeed to the agency created
by this Rights 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
49
such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver such 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 Right Agreement.
Section 20. DUTIES OF RIGHT AGENT. The Rights Agent undertakes
the duties and obligations expressly imposed by this Rights Agreement (and no
implied duties or obligations) 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 advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent , and the
Rights Agent shall incur no liability for or in respect of, any action taken,
suffered or omitted to be taken by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman,
the President, any
50
Vice President or the Treasurer and by the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent, and the Rights
Agent shall incur no liability for or in respect of any action taken,
suffered or omitted in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct (each as finally determined by
a court of competent jurisdiction).
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Rights 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 have any liability for, nor be
under any responsibility in respect of the validity of this Rights 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 Certificates
(except its countersignature thereof); nor shall it have any liability for, nor
be responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor shall it
have any liability for, nor be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Common Stock to be
issued pursuant to this Rights Agreement or any Right Certificate
51
or as to whether any shares of Preferred Stock (or other securities, as the
case may be) 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
advice or instructions with respect to the performance of its duties hereunder
from the Chairman, the President, any Vice President, the Secretary or any
Assistant Secretary, or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, such advice or instructions shall be full authorization and protection
to the Rights Agent and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted to be taken by it in good faith
in accordance with advice or instructions of any such officer. The Rights Agent
may conclusively rely on the most recent advice or instructions given by any
such officer.
(h) The Rights Agent and any shareowner, affiliate, 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 Rights Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
Person.
(i) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to
52
purchase set forth on the reverse thereof, as the case may be, has either not
been completed or indicates an affirmative response to clause I and/or 2 of
such certificate, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with
the Company; provided however, that the Rights Agent shall be protected and
shall incur no liability for, or in respect of any action taken, suffered or
omitted in connection with any such Right Certificate surrendered to the
Rights Agent for exercise or transfer. The Company agrees to give the Rights
Agent prompt written notice of any event or ownership that comes to the
Company's attention that would prohibit the exercise or transfer of the
Rights Certificates.
(j) No provision of this Agreement shall require the Rights Agent
to expend 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
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not assured it.
(k) 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 attorney or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company or any other Person resulting from any
such act, default, neglect or misconduct, absent gross negligence, bad faith, or
willful misconduct in the selection and continued employment thereof.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Rights Agreement upon 30 days' notice in writing mailed to the Company
and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of record of the Right Certificates by mail. The
Company
53
may remove the Rights Agent or any successor Rights Agent (with or without
cause) upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent as the case may be, and to each transfer agent of the
Common Stock by registered or certified mail, and to the holders of record of
the Right Certificates by mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal
of a Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. 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 record of a Right
Certificate (who shall, with such notice, submit such holder's Right
Certificate for inspection by the Company), then the incumbent Rights Agent
or the holder of record 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 Person organized and doing business under the laws of the
United States or any State thereof, in good standing, which is authorized
under such laws to conduct shareholder services business and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least Fifty Million Dollars ($50,000,000) or (b) an Affiliate controlled by a
Person 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
54
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and
mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATE. Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Rights Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; PROVIDED,
HOWEVER, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued,
55
if, and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (x) the Close of Business on the tenth day
following the Stock Acquisition Date (which date may be extended to the extent
permitted by Section 26 hereof), (y) the Close of Business on the Final
Expiration Date or (z) the date the Rights are exchanged pursuant to Section 28
hereof, cause the Company to redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
"Current Market Price," as defined in Section 11(d)(i) hereof, of the shares of
Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors. Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption under this Section 23(a) has expired.
(b) In the case of a redemption under Section 23(a), immediately
upon the action of the Board of Directors of the Company ordering the redemption
of the Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price, without any interest thereon. Within
ten days after the action of the Board of Directors ordering any such redemption
of the Rights, the
56
Company shall give notice of such redemption of the Rights to the Rights
Agent, pursuant to Section 25, and the holders of the then outstanding Rights
by mailing such notice to the Rights Agent and to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
In the case of a redemption permitted under Section 23(a), the Company
may, at its option, discharge all of its obligations with respect to the Rights
by (i) issuing a press release announcing the manner of redemption of the Rights
and (ii) mailing payment of the Redemption Price to the registered holders of
the Rights at their last addresses as they appear on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Stock, and upon such action, all outstanding Right
Certificates shall be null and void without any further action by the Company.
Section 24. NOTICE OF PROPOSED ACTION.
(a) In case the Company, after the earlier of the Distribution
Date or the Stock Acquisition Date, shall propose (i) to pay any dividend to the
holders of record of its Preferred Stock payable in stock of any class or to
make any other distribution to the holders of record of its Preferred Stock
(other than a regular periodic cash dividend), or (ii) to offer to the holders
of record of its Preferred Stock options, warrants, or other rights to subscribe
for or to purchase shares of Preferred Stock (including any security convertible
into or exchangeable for Preferred Stock) or shares of stock of any class or any
other securities, options, warrants, convertible or exchangeable securities or
other rights, or (iii) to effect any reclassification of its Preferred Stock
57
or any recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, 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 more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
the Rights Agent and to each holder of record of a Right Certificate, in
accordance with Section 25 hereof, notice of such proposed action, which shall
specify the record date for the purposes of such dividend or distribution, or
the date on which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Preferred Stock or Common Stock, as the case
may be, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of record of the Preferred
Stock 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 record of Preferred Stock or
Common Stock, as the case may be, whichever shall be the earlier. The failure to
give notice required by this Section 24 or any defect therein shall not affect
the legality or validity of the action taken by the Company or the vote upon any
such action.
(b) In case any of the events referred to in Section 11(a)(ii)
occur or any of the transactions referred to in Section 13 of this Rights
Agreement are proposed, then, in any such case, the Company shall give to the
Rights Agent and to each holder of Rights, in accordance with Section 25 hereof,
notice of the occurrence of such event or proposal of such transaction as
58
promptly as practicable which notice shall specify the proposed event and the
consequences of the event to holders of Rights under Section 11(a)(ii) or
Section 13 hereof, as the case may be, and, upon consummating such transaction,
shall similarly give notice thereof to the Rights Agent and to each holder of
Rights.
Section 25. NOTICES. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on behalf of the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
OGE Energy Corp.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Treasurer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right 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:
ChaseMellon Shareholder Services, L.L.C.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Relationship Manager
with a copy to:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attention: General Counsel
59
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right shall be sufficiently given or made if sent by mail, postage prepaid,
addressed to such holder at the address of such holder as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Rights Agreement without the approval of any holders of Rights
or certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Rights Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, a time period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 26 and, provided
such supplement or amendment does not change or increase the Rights Agent's
duties, liabilities, rights or
60
obligations hereunder without the prior written consent of the Rights
Agent,the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Agreement to the contrary,
no supplement or amendment shall be made which changes the Redemption Price,
the Final Expiration Date, the Purchase Price or the number of one
one-hundredths of a share of Preferred Stock for which a Right is
exercisable, unless such supplement or amendment is not made after the
occurrence of a Triggering Event and such supplement or amendment does not
adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 27. SUCCESSORS. All of the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding Rights (which shall not include Rights that have become
null and void pursuant to the provisions of Section 11(a)(ii) hereof) for shares
of Common Stock at an exchange ratio of two shares of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person),
61
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 of the
Company ordering the exchange of any Rights pursuant to Section 28(a) hereof 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 shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give the Rights Agent written notice of any such exchange and
shall promptly 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 addresses as they appear upon
the registry books of the Rights Agent, or if prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 28, the Company, at
its option, may substitute Preferred Stock (or Equivalent Preferred Stock, as
such term is defined in Section 11(b) hereof) for shares of Common Stock
exchangeable for Rights, at the initial rate of
62
one one-hundredth of a share of Preferred Stock (or Equivalent Preferred
Stock) for each two shares of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 28, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, there shall
be paid to the registered holders of the Right Certificates with regard to which
such fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this Section 28(e), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 28.
Section 29. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this
Rights Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the record holders of the Right Certificates (and,
prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
63
Section 30. OKLAHOMA CONTRACT. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Oklahoma 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; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely with such
State.
Section 31. COUNTERPARTS. This Rights 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 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
several sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of provisions
hereof.
Section 33. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 34. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
or any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-
64
3(d)(l)(i) of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board of
Directors, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make
all determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the Rights
or to amend the Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all
other parties, and (y) not subject the Board of Directors to any liability to
the holders of the Right Certificate. The Rights Agent shall always be
entitled to assume that the Company's Board of Directors acted in good faith
and shall be fully protected and incur no liability in reliance thereon.
65
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
Attest: OGE ENERGY CORP.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------- -------------------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary Title: Chairman of the Board, President
and Chief Executive Officer
Attest: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ R. Xxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------- -------------------------------------------
Name: R. Xxxx Xxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Vice President Title: Vice President
and Regional Manager
EXHIBIT A
ARTICLE XII OF RESTATED
CERTIFICATE OF INCORPORATION OF
OGE ENERGY CORP.
Of the then allotted shares of Preferred Stock described in Article IV
hereof, the Board of Directors on August 7, 1995, established a series of
Preferred Stock in the amount and with the designation, voting powers,
preferences and relative, participating, options or other special rights, and
the qualifications, limitations or restrictions as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated "Series A Preferred Stock" and the number of shares
constituting such series shall be 1,250,000. Shares of Series A Preferred Stock
shall have a par value of $.01 per share.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the possible prior and superior rights of the
holders of any shares of preferred stock of the Company ranking prior and
superior to the shares of Series A Preferred Stock with respect to dividends,
each holder of Series A Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
that purpose: (i) quarterly dividends payable in cash on January 20, April 20,
July 20 and October 20 in each year (each such date being a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of such share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $5.00 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends declared on shares of the
Common Stock of the Company, par value $.01 per share (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 a share of Series A Preferred Stock, and (ii) subject to the provision for
adjustment hereinafter set forth, quarterly distributions (payable in kind) on
each Quarterly Dividend Payment Date in an amount per share equal to 100 times
the aggregate per share amount of all non-cash dividends or other distributions
(other than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock, by reclassification or otherwise) declared
on shares of 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 a share of Series A Preferred Stock. If the
Quarterly Dividend Payment Date is a Saturday, Sunday or legal holiday, then
such Quarterly Dividend Payment Date shall be the first immediately preceding
calendar day which is not a Saturday, Sunday or legal holiday. In the event that
the Company shall at any time after August 7, 1995 (the "Rights Declaration
Date") (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock, or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case, the amount to which the holder of a share of
Series A Preferred Stock was entitled immediately prior to such event pursuant
to the preceding sentence shall be adjusted by
A-1
multiplying such amount by a fraction, the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event, and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on shares
of Series A Preferred Stock as provided in paragraph (A) above immediately after
it declares a dividend or distribution on the shares of Common Stock (other than
a dividend payable in shares of Common Stock); PROVIDED, HOWEVER, 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 $5.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on
each outstanding share of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such share of Series A
Preferred Stock, unless the date of issuance of such share is prior to the
record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such share shall begin to accrue from the date of issuance of such
share, or unless the date of issuance is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and 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
shares of Series A Preferred Stock in an amount less than the aggregate amount
of all such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all shares of Series A
Preferred Stock 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 no more than 60 days prior to the date fixed for the
payment thereof.
(D) Dividends payable on the Series A Preferred Stock for the
initial dividend period and for any period less than a full quarterly period,
shall be computed on the basis of a 360-day year of 30-day months.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the
holder thereof to one vote on all matters submitted to a vote of the
shareholders of the Company.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Company.
A-2
(C) If at the time of any annual meeting of shareholders for the
election of directors a "default in preference dividends" on the Series A
Preferred Stock shall exist, the holders of the Series A Preferred Stock shall
have the right at such meeting, voting together as a single class, to the
exclusion of the holders of Common Stock, to elect two (2) directors of the
Company. Such right shall continue until there are no dividends in arrears upon
the Series A Preferred Stock. Either or both of the two directors to be elected
by the holders of the Series A Preferred Stock may be to fill a vacancy or
vacancies created by an increase by the Board of Directors in the number of
directors constituting the Board of Directors. Each director elected by the
holders of Preferred Stock (a "Preferred Director") shall continue to serve as
such director for the full term for which he or she shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by, and
shall not be removed except by, the vote of the holders of record of the
outstanding Series A Preferred Stock voting together as a single class, at a
meeting of the shareholders or of the holders of Preferred Stock called for the
purpose. So long as a default in preference dividends on the Series A Preferred
Stock shall exist, (i) any vacancy in the office of a Preferred Director may be
filled (except as provided in the following clause (ii)) by an instrument in
writing signed by the remaining Preferred Director and filed with the Company
and (ii) in the case of the removal of any Preferred Director, the vacancy may
be filled by the vote of the holders of the outstanding Series A Preferred Stock
voting together as a single class, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a Preferred Director.
For the purposes hereof, a "default in preference dividends" on the Preferred
Stock shall be deemed to have occurred whenever the amount of accrued and unpaid
dividends upon the Series A Preferred Stock shall be equivalent to six (6) full
quarterly dividends or more, and having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued dividends on all
Series A Preferred Stock then outstanding shall have been paid to the end of the
last preceding quarterly dividend period. The provisions of this paragraph (C)
shall govern the election of Directors by holders of Series A Preferred Stock
during any default in preference dividends notwithstanding any provisions of the
Company's Certificate of Incorporation to the contrary.
(D) Except as set forth herein, holders of shares 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
shares of Common Stock as set forth herein) for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Until all accrued and unpaid dividends and distributions,
whether or not declared, on outstanding shares of Series A Preferred Stock shall
have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of
junior stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of parity stock, except dividends paid ratably on shares of Series A
Preferred Stock and shares of all
A-3
such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of such Series A Preferred Stock
and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any junior stock, PROVIDED, HOWEVER, that the Company may at any time
redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any other junior stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock or any shares of parity 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. REQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or, otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued 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 in the Certificate of
Incorporation of the Company creating a series of Preferred Stock or any similar
shares or as otherwise required by law.
Section 6. LIQUIDATION. DISSOLUTION OR WINDING UP.
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, no distributions shall be made (i) to the holders of
shares of junior stock unless the holders of Series A Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $100.00 per share plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, or (b) an amount per share equal to 100 times the aggregate per
share amount to be distributed to holders of shares of Common Stock, or (ii) to
the holders of shares of parity stock, unless simultaneously therewith
distributions are made ratably on shares of Series A Preferred Stock and all
other shares of such parity stock in proportion to the total amounts to which
the holders of shares of Series A Preferred Stock are entitled under clause
(i)(a) of this Sentence and to which the holders of shares of such parity stock
are entitled, in each case, upon such liquidation, dissolution or winding up.
(B) In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the aggregate amount to
A-4
which holders of Series A Preferred Stock were entitled immediately prior to
such event pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall
be adjusted by multiplying such amount by a fraction, the numerator of which
shall be the number of shares of Commons Stock that are outstanding
immediately after such event, and the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior to
such event.
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 converted 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 for or
converted 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 converted or
exchanged. In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the amount set forth in the immediately
preceding sentence with respect to the exchange or conversion of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event, and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. RANKING. The shares of Series A Preferred Stock shall
rank junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Company as to the payment of
dividends and the distribution of assets, unless the terms of any such series or
class shall provide otherwise.
Section 10. AMENDMENT. The provisions of this Certificate of
Designation shall not hereafter be amended, either directly or indirectly, or
through merger or consolidation with another corporation, in any manner that
would 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 a majority of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
Section 11. FRACTIONAL SHARES. The Series A Preferred Stock
may be issued in fractions of a share, which fractions shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions, and to have the
benefit of all other rights of holders of Series A Preferred Stock.
Section 12. CERTAIN DEFINITIONS. As used herein with respect
to the Series A Preferred Stock, the following terms shall have the following
meanings:
A-5
(A) The term "junior stock" (i) as used in Section 4, shall mean
the Common Stock and any other class or series of capital stock of the Company
hereafter authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends, and (ii) as used in
Section 6, shall mean the Common Stock and any other class or series of capital
stock of the Company over which the Series A Preferred Stock has preference or
priority in the distribution of assets on any liquidation, dissolution or
winding up of the Company.
(B) The term "parity stock" (i) as used in Section 4, shall mean
any class or series of stock of the Company hereafter authorized or issued
ranking PARI PASSU with the Series A Preferred Stock as to dividends, and (ii)
as used in Section 6, shall mean any class or series of stock of the Company
ranking PARI PASSU with the Series A Preferred Stock in the distribution of
assets on any liquidation, dissolution or winding up.
A-6
EXHIBIT B
(Form of Right Certificate)
Certificate No. W- _____ Rights
NOT EXERCISABLE AFTER DECEMBER 11, 2010 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. IN THE EVENT THAT THE RIGHTS REPRESENTED BY
THIS CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR
AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A PURPORTED
TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY WILL BECOME NULL AND
VOID. [THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE MAY BE AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE (AS
DEFINED IN THE RIGHTS AGREEMENT) OF AN ACQUIRING PERSON OR A SUBSEQUENT
HOLDER OF SUCH RIGHT CERTIFICATE BENEFICIALLY OWNED BY SUCH PERSONS.
ACCORDINGLY, UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS
AGREEMENT, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
WILL BE NULL AND VOID.]
Right Certificate
OGE ENERGY CORP.
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 Amended and
Restated Rights Agreement dated October 10, 2000 ("Rights Agreement") between
OGE Energy Corp., an Oklahoma corporation ("Company"), and ChaseMellon
Shareholder Services, L.L.C. ("Rights Agent"), to purchase from the Company
prior to 5:00 P.M. (Oklahoma City time) on December 11, 2010, at the designated
office of the Rights Agent, or its successors as Rights Agent, in Oklahoma City,
Oklahoma, one one-hundredth of a fully paid and nonassessable share of Series A
Preferred Stock, par value $.01 per share ("Preferred Stock"), of the Company at
a purchase price of $130.00, as the same may from time to time be adjusted in
accordance with the Rights Agreement ("Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
related Certificate duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock which may be purchased upon the exercise of the
Rights evidenced by this Right
B-1
Certificate are subject to modification and adjustment upon the happening of
certain events and, upon the happening of certain events, securities other
than shares of Preferred Stock, or other property, may be acquired upon the
exercise of the Rights evidenced by this Right Certificate, as provided by
the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Company and the holders of record of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive office of
the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificate of like tenor and date evidencing
Rights entitling the holder of record to purchase a like aggregate number of
shares of Preferred Stock as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive, upon surrender hereof, the Right Certificate indicating the
remaining Rights represented thereby or another Right Certificate or Right
Certificates for the number of Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date (as such terms are defined in the Rights Agreement), or under
certain other conditions as specified in the Rights Agreement.
No fractional shares of Preferred Stock shall be required to be issued
upon the exercise of any Right or Rights evidenced hereby, and 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 Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareowner of the Company or any right to vote for the election of directors or
upon any matter submitted to shareowners at any meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting shareowners 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 _______________.
ATTEST: OGE ENERGY CORP.
By:
------------------------------------ ------------------------------
Secretary Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
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 _______________ _____ Rights evidenced by 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:
-------------------------
----------------------------------
Signature
Signature Guaranteed:
B-4
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are 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 or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated:
----------------------
-----------------------------------
Signature
Signature Guaranteed:
B-5
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
exercise the Right Certificate.)
To: OGE ENERGY CORP.
The undersigned hereby irrevocably elects to exercise _____ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of such Rights (or such other securities of the
Company or any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such share(s) be issued in the name:
Please insert social security
or other identifying number
----------------------------------------------
(Please print name and address)
----------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the remaining such rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number
----------------------------------------------
(Please print name and address)
----------------------------------------------
Dated:
------------------------
--------------------------------------------------
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Right
Certificate)
Signature Guaranteed:
B-7
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) 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 or was an Acquiring Person or an Affiliate
or Associate of an Acquiring Person or any transferee of such Persons.
Dated:
----------------------
Signature
Signature Guaranteed:
B-8
EXHIBIT C
OGE ENERGY CORP.
SUMMARY OF AMENDED AND
RESTATED RIGHTS AGREEMENT
On August 7, 1995, the Board of Directors of OGE Energy Corp. (the
"Company") declared a dividend of one Preferred Stock purchase right (a "Right"
or "Rights") for each outstanding share of Common Stock, par value $.01 per
share ("Common Stock"), of the Company, payable as of the close of business on
August 8, 1995 (the "Record Date"), to shareowners of record as of such Record
Date. As a result of the two-for-one stock split paid on June 15, 1998, each
share is now accompanied by one-half of a Right, so that the total number of
Rights attributable to the shares remains the same. The Board of Directors of
the Company subsequently determined it to be in the best interests of the
Company and its shareholders to amend and restate the Company's Rights Agreement
to extend its term to December 11, 2010 and to change the Purchase Price to
$130.00. The description and terms of the Rights are set forth in the Amended
and Restated Rights Agreement dated October 10, 2000 (the "Rights Agreement")
between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (the "Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Initially, (i) the Rights will not be exercisable, (ii) certificates
will not be sent to shareowners, (iii) the Rights will be evidenced by the
Common Stock certificates, (iv) the Rights will automatically trade with the
Common Stock, (v) the Rights will be transferred with and only with such Common
Stock certificates, (vi) new Common Stock certificates will contain a notation
incorporating the Rights Agreement by reference and (vii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights become exercisable on the "Distribution Date," which is the
close of business on the earlier of:
(i) the tenth day after a public announcement (or, if earlier, the
date a majority of the Board of Directors of the Company becomes aware)
that a person or group of affiliated or associated persons acquired, or
obtained the right to acquire, beneficial ownership of Common Stock or
other securities of the Company representing 20% or more of the voting
power of all securities of the Company then outstanding generally
entitled to vote for the election of directors ("Voting Power") (such
person or group being called an "Acquiring Person" and such date of
first public announcement being called the "Stock Acquisition Date"),
or
(ii) the tenth day after the commencement of, or public
announcement of an intention to commence, a tender or exchange offer
the consummation of which would result in the
C-1
ownership of 20% or more of the outstanding Voting Power (the earlier
of the dates in clause (i) or (ii) being called the "Distribution
Date").
When the Rights initially become exercisable, each Right will entitle
the holder of record to purchase from the Company one one-hundredth of a share
of Series A Preferred Stock, par value $.01 per share ("Preferred Stock"), of
the Company, at a price of $130.00 per one one-hundredth of a share (the
"Purchase Price"), although the price and the securities to be purchased are
subject to adjustment as described below.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Company's Common Stock as of the close of business on
the Distribution Date, and such separate certificates alone will evidence the
Rights from and after the Distribution Date.
EXEMPT PERSONS
Even if they have acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the Voting Power of the Company, each of
the following persons (an "Exempt Person") will not be deemed to be an Acquiring
Person: (i) Oklahoma Gas and Electric Company, the Company, any subsidiary of
the Company, any employee benefit plan or employee stock plan of the Company, of
any subsidiary of the Company or of Oklahoma Gas and Electric Company; and (ii)
any person who becomes an Acquiring Person solely by virtue of a reduction in
the number of outstanding shares of Common Stock, unless and until such person
shall become the beneficial owner of, or make a tender offer for any additional
shares of Common Stock.
EXERCISABILITY AND EXPIRATION
THE HOLDERS OF THE RIGHTS ARE NOT REQUIRED TO TAKE ANY ACTION UNTIL THE
RIGHTS BECOME EXERCISABLE. As stated above, the Rights are not exercisable until
the Distribution Date. The Rights will expire at the close of business on
December 11, 2010, unless earlier redeemed or exchanged by the Company as
described below.
ADJUSTMENTS
In order to protect the value of the Rights to the holders, the
Purchase Price and the number of shares of Preferred Stock (or other securities
or property) issuable upon exercise of the Rights are subject to adjustment from
time to time (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Company's Common Stock or Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding dividends payable in Preferred Stock) or of subscription
rights or warrants (other than those referred to above).
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These adjustments are called anti-dilution provisions and are intended
to ensure that a holder of Rights will not be adversely affected by the
occurrence of such events. With certain exceptions, the Company is not required
to adjust the Purchase Price until cumulative adjustments require a change of at
least 1% in the Purchase Price.
FLIP-IN EVENTS AND FLIP-OVER EVENTS
In the event (i) any person (other than an Exempt Person) becomes an
Acquiring Person (except pursuant to an offer for all outstanding shares of
Common Stock that the independent directors determine prior to the time such
offer is made to be fair to and otherwise in the best interest of the Company
and its shareowners) or (ii) any Exempt Person who is the beneficial owner of
20% or more of the outstanding Voting Power of the Company fails to continue to
qualify as an Exempt Person, then each holder of record of a Right, other than
the Acquiring Person, will thereafter have the right to receive, upon payment of
the Purchase Price, Common Stock (or, in certain circumstances, cash, property
or other securities of the Company) having a market value at the time of the
transaction equal to twice the Purchase Price. Rights are not exercisable
following such event, however, until such time as the Rights are no longer
redeemable by the Company as set forth below. Any Rights that are or were at any
time, on or after the Distribution Date, beneficially owned by an Acquiring
Person shall become null and void.
For example, at a Purchase Price of $130 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase $260
worth of Common Stock (or other consideration, as noted above) for $130.
Assuming that the Common Stock had a per share value of $20 at such time, the
holder of each valid Right would be entitled to purchase 13 shares of Common
Stock for $130.
Subject to certain limited exceptions, if (i) the Company is acquired
after the Stock Acquisition Date in a merger or other business combination (in
which any shares of the Company's Common Stock are changed into or exchanged for
other securities or assets) or (ii) more than 50% of the assets or earning power
of the Company and its subsidiaries (taken as a whole) are sold or transferred
after the Stock Acquisition Date in one or a series of related transactions, the
Rights Agreement provides that proper provision shall be made so that each
holder of record of a Right will have the right to receive, upon payment of the
Purchase Price, that number of shares of common stock of the acquiring company
having a market value at the time of such transaction equal to two times the
Purchase Price.
To the extent that insufficient shares of Common Stock are available
for the exercise in full of the Rights, holders of Rights will receive upon
exercise shares of Common Stock to the extent available and then other
securities of the Company, including units of shares of Preferred Stock with
terms substantially comparable to those of the Common Stock, property, debt
securities, or cash, in proportions determined by the Company, so that the
aggregate value received is equal to twice the Purchase Price. The Company,
however, shall not be required to issue any cash, property or debt securities
upon exercise of the Rights to the extent their
C-3
aggregate value would exceed the amount of cash the Company would otherwise
be entitled to receive upon exercise in full of the then exercisable Rights.
No fractional shares of Preferred Stock or Common Stock will be
required to be issued upon exercise of the Rights and, in lieu thereof, a
payment in cash may be made to the holder of such Rights equal to the same
fraction of the current market value of a share of Preferred Stock or, if
applicable, Common Stock.
REDEMPTION
At any time until the earlier of (i) ten days after the Stock
Acquisition Date (subject to extension by the Board of Directors) or (ii) the
date the Rights are exchanged pursuant to the Rights Agreement, the Company may
redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Company authorizing 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 without any interest thereon.
EXCHANGE OPTION
At any time after any person becomes an Acquiring Person, the Board of
Directors may, at its option, exchange all or part of the outstanding Rights
(other than Rights held by the Acquiring Person and certain related parties) for
shares of Common Stock at an exchange ratio of two shares of Common Stock per
Right (subject to certain anti-dilution adjustments). The Board may not effect
such an exchange, however, at any time any person or group owns 50% or more of
the Voting Power of the Company. Immediately after the Board orders such an
exchange, the right to exercise the Rights shall terminate and the holders of
Rights shall thereafter only be entitled to receive shares of Common Stock at
the applicable exchange ratio.
OTHER PROVISIONS
Under presently existing federal income tax law, the issuance of the
Rights is not taxable to the Company or to shareowners and will not change the
way in which shareowners can presently trade the Company's shares of Common
Stock. If the Rights should become exercisable, shareowners, depending on then
existing circumstances, may recognize taxable income.
The Rights Agreement may be amended by the Board of Directors of the
Company. After the Distribution Date, however, the provisions of the Rights
Agreement may be amended by the Board only to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or an affiliate or associate of
an Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable. In addition, no supplement or amendment may be made which changes
the Redemption Price, the final expiration date, the Purchase Price or the
number of one one-hundredths of a share of Preferred Stock for which a Right is
C-4
exercisable, unless at the time of such supplement or amendment there has been
no occurrence of a Stock Acquisition Date and such supplement or amendment does
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an associate or affiliate of an Acquiring Person).
Until a Right is exercised, the holder, as such, will have no rights as
a shareowner of the Company, including, without limitation, the right to vote or
to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Form 8-K. A copy of the Rights Agreement
is available free of charge from either the Rights Agent or the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated in this summary description herein by reference.
C-5
