Exhibit 4.2
RIGHTS AGREEMENT
dated as of
November 13, 1998
between
MCMORAN EXPLORATION CO.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS SUCCESSOR
TO
MELLON SECURITIES TRUST COMPANY,
as Rights Agent
TABLE OF CONTENTS
PAGE
SECTION 1. Definitions...............................1
SECTION 2. Appointment of Rights Agent...............5
SECTION 3. Issue of Right Certificates...............6
SECTION 4. Form of Right Certificates................7
SECTION 5. Countersignature and Registration.........7
SECTION 6. Transfer and Exchange of Right
Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates................8
SECTION 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights...................9
SECTION 8. Cancellation and Destruction of Right
Certificates...............................10
SECTION 9. Reservation and Availability of
Capital Stock..............................11
SECTION 10. Preferred Stock Record Date.............12
SECTION 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights.....12
SECTION 12. Certificate of Adjusted Purchase
Price or Number of Shares..................21
SECTION 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power........21
SECTION 14. Fractional Rights and Fractional
Shares.....................................24
SECTION 15. Rights of Action........................25
SECTION 16. Agreement of Right Holders..............25
SECTION 17. Right Certificate Holder Not Deemed a
Stockholder................................26
SECTION 18. Concerning the Rights Agent.............26
SECTION 19. Merger or Consolidation or Change of
Name of Rights Agents......................27
SECTION 20. Duties of Rights Agent..................28
SECTION 21. Change of Rights Agent..................30
SECTION 22. Issuance of New Right Certificates......31
SECTION 23. Redemption..............................31
SECTION 24. Exchange................................32
SECTION 25. Notice of Proposed Actions..............33
SECTION 26. Notices.................................34
SECTION 27. Supplements and Amendments..............34
SECTION 28. Successors..............................35
SECTION 29. Determinations and Actions by the
Board, etc.................................35
SECTION 30. Benefits of this Agreement..............35
SECTION 31. Severability............................35
SECTION 32. Governing Law...........................35
SECTION 33. Counterparts............................35
SECTION 34. Descriptive Headings....................36
Exhibit A - Form of Certificate of Designation of
Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary Description of the Stockholder
Rights Plan
RIGHTS AGREEMENT
AGREEMENT dated as of November 13, 1998 between
McMoRan Exploration Co., a Delaware corporation (the
"Company"), and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company (as
successor to Mellon Securities Trust Company), as
Rights Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company
authorized and declared a dividend of one preferred
stock purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) outstanding at
the Close of Business on November 13, 1998 (the "Record
Date") and has authorized the issuance, upon the terms
and subject to the conditions hereinafter set forth, of
one Right (subject to adjustment) in respect of each
share of Common Stock issued after the Record Date,
each Right representing the right to purchase, upon the
terms and subject to the conditions hereinafter set
forth, one one-hundredth (subject to adjustment) of a
share of Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as
follows:
SECTION 1. Definitions. The following terms, as
used herein, have the following meanings:
"Acquiring Person" means any Person who, together
with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of the Threshold
Percentage or more of the shares of Common Stock then
outstanding, but shall not include an Exempt Person;
provided, however, that (a) if the Board determines in
good faith that a Person who would otherwise be an
"Acquiring Person" became the Beneficial Owner of a
number of shares of Common Stock such that the Person
would otherwise qualify as an "Acquiring Person"
inadvertently (including, without limitation, because
(i) such Person was unaware that it beneficially owned
a percentage of Common Stock that would otherwise cause
such Person to be an "Acquiring Person" or (ii) such
Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual knowledge
of the consequences of such Beneficial Ownership under
this Agreement) and without any intention of changing
or influencing control of the Company, then such Person
shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement
unless and until such Person shall have failed to
divest itself, as soon as practicable (as determined,
in good faith, by the Board of Directors of the
Company), of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person
would no longer otherwise qualify as an "Acquiring
Person"; and (b) no Person shall become an "Acquiring
Person" as the result of any acquisition of shares of
Common Stock by the Company which, by reducing the
number of shares of Common Stock outstanding, increases
the proportionate number of shares of Common Stock
beneficially owned by such Person to the Threshold
Percentage or more of the shares of Common Stock then
outstanding; provided, however, that if a Person shall
become the Beneficial Owner of the Threshold Percentage
or more of the shares of Common Stock then outstanding
by reason of such share acquisition by the Company and
shall thereafter become the Beneficial Owner of any
additional shares of Common Stock (other than pursuant
to a dividend or distribution paid or made by the
Company on the outstanding Common Stock or pursuant to
a split or subdivision of the outstanding Common
Stock), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial
Owner of such additional shares of Common Stock such
Person does not beneficially own the Threshold
Percentage or more of the shares of Common Stock then
outstanding.
"Affiliate" and "Associate" have the respective
meanings ascribed to such terms in Rule 12b-2 under the
Exchange Act as in effect on the date hereof.
A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to have "Beneficial Ownership"
of and to "beneficially own", any securities:
(a) which such Person or any of its
Affiliates or Associates, directly or indirectly,
beneficially owns (as determined pursuant to Rule
13d-3 under the Exchange Act as in effect on the
date hereof);
(b) which such Person or any of its
Affiliates or Associates, directly or indirectly,
has
(i) the right to acquire (whether such
right is exercisable immediately or only upon
the occurrence of certain events or the
passage of time or both) pursuant to any
agreement, arrangement or understanding
(other than customary agreements with and
between underwriters and selling group
members with respect to a bona fide public
offering of securities), or upon the exercise
of conversion rights, exchange rights,
rights, warrants or options, or otherwise;
provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to
"beneficially own", (A) securities tendered
pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such
Person's Affiliates or Associates until such
tendered securities are accepted for
purchase, (B) securities which such Person
has a right to acquire upon the exercise of
Rights at any time prior to the time that any
Person becomes an Acquiring Person or (C)
securities issuable upon the exercise of
Rights from and after the time that any
Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof ("Original
Rights") or pursuant to Section 11(i) or
Section 11(p) with respect to an adjustment
to Original Rights; or
(ii) the right to vote (whether such
right is exercisable immediately or only upon
the occurrence of certain events or the
passage of time or both) pursuant to any
agreement, arrangement or understanding
(whether or not in writing) or otherwise;
provided that a Person shall not be deemed
the "Beneficial Owner" of, or to
"beneficially own", any security under this
clause (ii) as a result of an agreement,
arrangement or understanding to vote such
security if such agreement, arrangement or
understanding (A) arises solely from a
revocable proxy or consent given in response
to a public proxy or consent solicitation
made pursuant to the applicable rules and
regulations under the Exchange Act and (B) is
not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate
or Associate thereof) and with respect to which
such Person or any of its Affiliates or Associates
has any agreement, arrangement or understanding
(other than customary agreements with and between
underwriters and selling group members with
respect to a bona fide public offering of
securities) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or
consent as described in subparagraph (b)(ii)
immediately above) or disposing of any such
securities;provided, however, that no Person
who is an officer, director or
employee of an Exempt Person shall be deemed, solely by
reason of such Person's status or authority as such, to
be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities
that are "beneficially owned", including, without
limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or
employee of an Exempt Person.
"Board" means the Board of Directors of the
Company.
"Business Day" means any day other than a
Saturday, Sunday or a day on which banking institutions
in the State of New Jersey are authorized or obligated
by law or executive order to close.
"Close of Business" on any given date means 5:00
P.M., New York City time, on such date; provided that
if such date is not a Business Day "Close of Business"
means 5:00 P.M., New York City time, on the next
succeeding Business Day.
"Common Stock" means the Common Stock, par value
$0.01 per share, of the Company, except that, when used
with reference to any Person other than the Company,
"Common Stock" means the capital stock of such Person
with the greatest voting power, or the equity
securities or other equity interest having power to
control or direct the management, of such Person.
"Distribution Date" means the earlier of (a) the
Close of Business on the tenth day after the Stock
Acquisition Date and (b) the Close of Business on the
tenth Business Day (or such later day as may be
designated prior to the occurrence of a Section
11(a)(ii) Event by action of the Board) after the date
of the commencement of a tender or exchange offer by
any Person if, upon consummation thereof, such Person
would be an Acquiring Person; provided, however, that
if either of such dates occurs after the date of this
Agreement and on or prior to the Record Date, then the
Distribution Date shall be the Record Date.
"Exempt Person" shall mean McMoRan Oil & Gas Co.,
Freeport-McMoRan Sulphur Inc., the Company or any
Subsidiary of the Company, in each case including,
without limitation, in its fiduciary capacity, or any
employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity or trustee
holding Common Stock for or pursuant to the terms of
any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees
of the Company or of any Subsidiary of the Company.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Expiration Date" means the earlier of (a) the
Final Expiration Date and (b) the time at which all
Rights are redeemed as provided in Section 23 or
exchanged as provided in Section 24.
"Final Expiration Date" means the Close of
Business on November 13, 2008.
"Person" means an individual, corporation, limited
liability company, partnership, association, trust or
any other entity or organization.
"Preferred Stock" means the Series A Participating
Cumulative Preferred Stock, par value $0.01 per share,
of the Company, having the terms set forth in the form
of certificate of designation attached hereto as
Exhibit A.
"Purchase Price" means the price (subject to
adjustment as provided herein) at which a holder of a
Right may purchase one one-hundredth of a share of
Preferred Stock (subject to adjustment as provided
herein) upon exercise of a Right, which price shall
initially be $80.00.
"Section 11(a)(ii) Event" means any event
described in the first clause of Section 11(a)(ii).
"Section 13 Event" means any event described in
clauses (x), (y) or (z) of Section 13(a).
"Securities Act" means the Securities Act of 1933,
as amended.
"Stock Acquisition Date" means the date of the
first public announcement (including the filing of a
report on Schedule 13D under the Exchange Act (or any
comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person
has become such.
"Subsidiary" of any Person means any other Person
of which securities or other ownership interests having
ordinary voting power, in the absence of contingencies,
to elect a majority of the board of directors or other
Persons performing similar functions are at the time
directly or indirectly owned by such first Person.
"Threshold Percentage" means (i) 20% with respect
to Alpine Capital, L.P., Xxxxxx X. Xxxxx III, Algenpar,
Inc., X. Xxxxxx Xxxxxxxx, Keystone, Inc., Xxxxxx X.
Xxxx and their respective Affiliates and Associates
and (ii) 15% with respect to any other Person and its
Affiliates and Associates.
"Trading Day" means a day on which the principal
national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on
any national securities exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii)
Event or any Section 13 Event.
SECTION 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary
or desirable. If the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company
shall determine. 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.
SECTION 3. Issue of Right Certificates. (a)
Prior to the Distribution Date, (i) the Rights will be
evidenced (subject to the penultimate sentence of this
Section 3(a)) by the certificates for the Common Stock
and not by separate Right Certificates (as hereinafter
defined) and the registered holders of the Common Stock
shall be deemed to be the registered holders of the
associated Rights, and (ii) the Rights will be
transferable only in connection with the transfer of
the underlying shares of Common Stock. As soon as
practicable after the Record Date, the Company will
send a copy of the Summary of Rights substantially in
the form of Exhibit C hereto, by first-class, postage
prepaid mail, to each record holder of the Common Stock
as of the Close of Business on the Record Date at the
address of such holder shown on the records of the
Company. Prior to the Distribution Date (or, if
earlier, the Expiration Date), the surrender for
transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy
of the Summary of Rights, shall also constitute the
transfer of the Rights associated with the Common Stock
represented thereby.
(b) As soon as practicable after the Company has
notified the Rights Agent of the occurrence of the
Distribution Date and provided the Rights Agent with
all necessary information, the Rights Agent will send,
by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the Close of
Business on the Distribution Date (other than any
Acquiring Person or any Affiliate or Associate
thereof), at the address of such holder shown on the
records of the Company, one or more Right Certificates
evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. If an
adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11 the Company
shall, at the time of distribution of the Right
Certificates, make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a))
so that Right Certificates representing only whole
numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. From and after the
Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(c) Rights shall be issued in respect of all
shares of Common Stock outstanding as of the Record
Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration
Date. In addition, in connection with the issuance or
sale of shares of Common Stock following the
Distribution Date and prior to the Expiration Date, the
Company (i) shall, with respect to shares of Common
Stock so issued or sold (x) pursuant to the exercise of
stock options or under any employee plan or arrangement
or (y) upon the exercise, conversion or exchange of
other securities issued by the Company prior to the
Distribution Date and (ii) may, in any other case, if
deemed necessary or appropriate by the Board, issue
Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale;
provided that no such Right Certificate shall be issued
if, and to the extent that, (i) the Company shall be
advised by counsel that such issuance would create a
significant risk of material adverse tax consequences
to the Company or the Person to whom such Right
Certificate would be issued or (ii) appropriate
adjustment shall otherwise have been made in lieu of
the issuance thereof.
(d) Certificates issued for Common Stock after the
Record Date but prior to the earlier of the
Distribution Date and the Expiration Date shall have
impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences
certain Rights as set forth in a
Rights Agreement between McMoRan
Exploration Co. and Mellon
Securities Trust Company, as Rights
Agent, dated as of November 13,
1998 (the "Rights Agreement"), the
terms of which are hereby
incorporated herein by reference
and a copy of which is on file at
the principal executive offices of
the Corporation. The Corporation
will mail to the holder of this
certificate a copy of the Rights
Agreement without charge promptly
after receipt of a written request
therefor. Under certain
circumstances, as set forth in the
Rights Agreement, such Rights may
be evidenced by separate
certificates and no longer be
evidenced by this certificate, may
be redeemed or exchanged or may
expire. As set forth in the Rights
Agreement, Rights issued to, or
held by, any Person who is, was or
becomes an Acquiring Person or an
Affiliate or Associate thereof (as
such terms are defined in the
Rights Agreement), whether
currently held by or on behalf of
such Person or by any subsequent
holder, may be null and void.
SECTION 4. Form of Right Certificates. The
certificates evidencing the Rights (and the forms of
assignment, election to purchase and certificates to be
printed on the reverse thereof) (the "Right
Certificates") shall be substantially in the form of
Exhibit B hereto and may have such marks of
identification or designation and such legends,
summaries or endorsements printed thereon as the
Company may deem appropriate (which do not affect the
duties or responsibilities of the Rights Agent) and as
are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or
regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to
usage. The Right Certificates, whenever distributed,
shall be dated as of the Record Date.
SECTION 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf
of the Company by either of its Co-Chairmen of the
Board, its President or any Vice President, either
manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or
by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned.
In case any officer of the Company whose manual or
facsimile signature is affixed to the Right
Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right
Certificates may, nevertheless, be countersigned by the
Rights Agent and issued and delivered with the same
force and effect as though the Person who signed such
Right Certificates had not ceased to be such officer of
the Company. Any Right Certificate may be signed on
behalf of the Company by any Person who, at the actual
date of the execution of such Right Certificate, shall
be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of
this Rights Agreement any such Person was not such an
officer.
(b) Following the Distribution Date and receipt by
the Rights Agent of all necessary information, the
Rights Agent will keep or cause to be kept, at its
office designated as the place for surrender of Right
Certificates upon exercise, transfer or exchange, books
for registration and transfer of the Right
Certificates. Such books shall show with respect to
each Right Certificate the name and address of the
registered holder thereof, the number of Rights
indicated on the certificate and the certificate
number.
SECTION 6. Transfer and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. (a) At any time after the
Distribution Date and prior to the Expiration Date, any
Right Certificate or Certificates may, upon the terms
and subject to the conditions set forth in this
Agreement, be transferred or exchanged for another
Right Certificate or Certificates evidencing a like
number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder
desiring to transfer or exchange any Right Certificate
or Certificates shall surrender such Right Certificate
or Certificates (with, in the case of a transfer, the
form of assignment and certificate on the reverse side
thereof duly executed) to the Rights Agent at the
office of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate
or Certificates until the registered holder of the
Rights has complied with the requirements of Section
7(e). Upon satisfaction of the foregoing requirements,
the Rights Agent shall, subject to Sections 7(d), 14
and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so
requested. The Company may require payment of a sum
sufficient to cover any tax or other charge that may be
imposed in connection with any transfer or exchange of
any Right Certificate or Certificates. The Rights
Agent shall have no duty or obligation under this
Section unless and until it is satisfied that all such
taxes and/or charges have been paid.
(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, at the Company's request, reimbursement to
the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate
if mutilated, the Company will issue and deliver a new
Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner
in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) The registered holder
of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein,
including Sections 7(d), 7(e), 9(c), 11(a), 23 and 24)
in whole or in part at any time after the Distribution
Date and prior to the Expiration Date upon surrender of
the Right Certificate, with the form of election to
purchase and the certificate on the reverse side
thereof duly and properly executed, to the Rights Agent
at the office of the Rights Agent designated for such
purpose, together with payment (in lawful money of the
United States of America by certified check or bank
draft payable to the order of the Company) of the
aggregate Purchase Price with respect to the Rights
then to be exercised and an amount equal to any
applicable tax or other charge.
(b) Upon satisfaction of the requirements of
Section 7(a) and subject to Section 20(k), the Rights
Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Stock (or make
available, if the Rights Agent is the transfer agent
therefor) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be
purchased (and the Company hereby irrevocably
authorizes its transfer agent to comply with all such
requests) or (B) if the Company shall have elected to
deposit the shares of Preferred Stock issuable upon
exercise of the Rights with a depositary agent,
requisition from the depositary agent depositary
receipts representing interests in such number of one
one-hundredths of a share of Preferred Stock as are to
be purchased (in which case certificates for the shares
of Preferred Stock represented by such receipts shall
be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent
to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu
of issuance of fractional shares in accordance with
Section 14 and (iii) after receipt of such certificates
or depositary receipts and cash, if any, cause the same
to be delivered to or upon the order of the registered
holder of such Right Certificate (with such
certificates or receipts registered in such name or
names as may be designated by such holder). If the
Company is obligated to deliver Common Stock, other
securities or assets pursuant to this Agreement, the
Company will make all arrangements necessary so that
such other securities and assets are available for
delivery by the Rights Agent, if and when necessary to
comply with this Agreement.
(c) In case the registered holder of any Right
Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing
the number of Rights remaining unexercised shall be
issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Right
Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of
Section 6 and Section 14.
(d) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring
Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate)
to holders of equity interests in such Acquiring Person
(or in any such Associate or Affiliate) or to any
Person with whom the Acquiring Person (or any such
Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which is part of a plan,
arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(d)
shall become null and void without any further action,
and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The
Company shall notify the Rights Agent when this Section
7(d) applies and shall use all reasonable efforts to
insure that the provisions of this Section 7(d) 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
Company's failure to make any determinations with
respect to an Acquiring Person or its Affiliates and
Associates or any transferee of any of them hereunder.
(e) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company
shall be obligated to undertake any action with respect
to a registered holder of Rights upon the occurrence of
any purported transfer pursuant to Section 6 or
exercise pursuant to this Section 7 unless such
registered holder (i) shall have properly completed and
signed the certificate contained in the form of
assignment or election to purchase, as the case may be,
set forth on the reverse side of the Right Certificate
surrendered for such transfer or exercise, as the case
may be, (ii) shall not have indicated an affirmative
response to clause 1 or 2 thereof and (iii) shall have
provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.
SECTION 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for
exercise, transfer or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to
the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be
canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the
Rights Agent for cancellation, and the Rights Agent
shall cancel, any other Right Certificate purchased or
acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the
Company.
SECTION 9. Reservation and Availability of
Capital Stock. (a) The Company covenants and agrees
that it will cause to be reserved and kept available a
number of shares of Preferred Stock which are
authorized but not outstanding or otherwise reserved
for issuance sufficient to permit the exercise in full
of all outstanding Rights as provided in this
Agreement.
(b) So long as the Preferred Stock issuable upon
the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best
efforts to cause, from and after such time as the
Rights become exercisable, all securities reserved for
such issuance to be listed on any such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to
file, as soon as practicable following the earliest
date after the occurrence of a Section 11(a)(ii) Event
as of which the consideration to be delivered by the
Company upon exercise of the Rights has been determined
in accordance with Section 11(a)(iii), or as soon as is
required by law following the Distribution Date, as the
case may be, a registration statement under the
Securities Act with respect to the securities issuable
upon exercise of the Rights, (ii) to cause such
registration statement to become effective as soon as
practicable after such filing and (iii) to cause such
registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such
securities and (B) the Expiration Date. The Company
will also take such action as may be appropriate under,
or to ensure compliance with, the securities or blue
sky laws of the various states in connection with the
exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed
90 days after the date set forth in clause 9(c)(i), the
exercisability of the Rights in order to prepare and
file such registration statement and permit it to
become effective. Upon any such suspension, the
Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such
time as the suspension is no longer in effect (with
prompt notice thereof to the Rights Agent).
Notwithstanding any such provision of this Agreement to
the contrary, the Rights shall not be exercisable for
securities in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been
obtained, such exercise therefor shall not be permitted
under applicable law or a registration statement in
respect of such securities shall not have been declared
effective.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to insure that
all one one-hundredths of a share of Preferred Stock
issuable upon exercise of Rights shall, at the time of
delivery of the certificates for such securities
(subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all taxes and
other charges which may be payable in respect of the
issuance or delivery of the Right Certificates and of
any certificates for Preferred Stock upon the exercise
of Rights. The Company shall not, however, be required
to pay any tax or other charge which may be payable in
respect of any transfer involved in the issuance or
delivery of any Right Certificates or of any
certificates for Preferred Stock to a Person other than
the registered holder of the applicable Right
Certificate, and prior to any such transfer, issuance
or delivery any such tax or other charge shall have
been paid by the holder of such Right Certificate or it
shall have been established to the Company's
satisfaction that no such tax or other charge is due.
SECTION 10. Preferred Stock Record Date. Each
Person (other than the Company) in whose name any
certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to
have become the holder of record of such Preferred
Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any taxes or
other charges) was made; provided that if the date of
such surrender and payment is a date upon which the
transfer books of the Company relating to the Preferred
Stock are closed, such Person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding
Business Day on which the applicable transfer books of
the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including the
right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any
proceedings of the Company except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights. (a) (i) If
the Company shall at any time after the date of this
Agreement (A) pay a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock into a greater number of
shares, (C) combine the outstanding Preferred Stock
into a smaller number of shares or (D) issue any shares
of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in
connection with a consolidation or merger involving the
Company), the Purchase Price in effect immediately
prior to the record date for such dividend or the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
Preferred Stock or other capital stock issuable on such
date shall be proportionately adjusted so that each
holder of a Right shall (except as otherwise provided
herein, including Section 7(d)) thereafter be entitled
to receive, upon exercise thereof at the Purchase Price
in effect immediately prior to such date, the aggregate
number and kind of shares of Preferred Stock or other
capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and
at a time when the applicable transfer books of the
Company were open, such holder would have been entitled
to receive upon such exercise and by virtue of such
dividend, subdivision, combination or reclassification.
If an event occurs which requires an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its
Affiliates and Associates, shall, at any time after the
date of this Agreement, become an Acquiring Person,
then each holder of a Right shall (except as otherwise
provided herein, including Section 7(d)) thereafter be
entitled to receive, upon exercise thereof at the
Purchase Price in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event, in lieu of
Preferred Stock, such number of duly authorized,
validly issued, fully paid and nonassessable shares of
Common Stock of the Company (such shares being referred
to herein as the "Adjustment Shares") as shall be equal
to the result obtained by dividing
(x) the product obtained by multiplying the
Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event by
the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable
immediately prior to such first occurrence (such
product being thereafter referred to as the
"Purchase Price" for each Right) by
(y) 50% of the current market price
(determined pursuant to Section 11(d)(i)) per
share of Common Stock on the date of such first
occurrence; provided, however, that
the Purchase Price (as so adjusted pursuant
this clause (ii) and the number of Adjustment Shares so
receivable upon exercise of a Right shall, following
the occurrence of such Section 11(a)(ii) Event, be
subject to further adjustment as appropriate in
accordance with Section 11(f). From and after the
occurrence of a Section 13 Event, any Rights that
theretofore have not been exercised pursuant to this
Section 11(a)(ii) shall thereafter be exercisable only
in accordance with Section 13 and not pursuant to this
Section 11(a)(ii).
(iii) If the number of shares of Common Stock that
are authorized by the Company's certificate of
incorporation but not outstanding or reserved for
issuance other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights
in accordance with Section 11(a)(ii), the Company
shall, with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon
payment of the Purchase Price then in effect, (A) (to
the extent available) Common Stock and then, (B) (to
the extent available) such number of one one-hundredths
of a share of Preferred Stock as are then equivalent in
value to the value of the Adjustment Shares, and then,
if necessary, (C) other equity or debt securities of
the Company, cash or other assets, a reduction in the
Purchase Price or any combination of the foregoing,
having an aggregate value (based upon the advice of a
nationally recognized investment banking firm) equal to
the value of the Adjustment Shares; provided that
(x) the Company may, and (y) if the Company shall not
have made adequate provision as required above to
deliver value within 30 days following the first
occurrence of a Section 11(a)(ii) Event (the
"Substitution Period"), then the Company shall be
obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the
Purchase Price, (1) (to the extent available) Common
Stock and then (2) (to the extent available) one-
hundredths of a share of Preferred Stock and then, if
necessary, (3) other equity or debt securities of the
Company, cash or other assets or any combination of the
foregoing, having an aggregate value (based upon the
advice of a nationally recognized investment banking
firm) equal to the excess of the value of the
Adjustment Shares over the Purchase Price. To the
extent that the Company determines that some action is
to be taken pursuant to the preceding sentence, the
Company (X) shall provide, subject to Section 7(d),
that such action shall apply uniformly to all
outstanding Rights and (Y) may suspend the
exercisability of the Rights until the expiration of
the Substitution Period in order to decide the
appropriate form and value of any consideration to be
delivered as referred to in the preceding sentence. If
any such suspension occurs, the Company shall issue a
public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is
no longer in effect (with prompt 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 Common Stock (as
determined pursuant to Section 11(d)) on the date of
the first occurrence of a Section 11(a)(ii) Event; any
common stock equivalent shall be deemed to have the
same value as the Common Stock on such date; and the
value of other securities or assets shall be determined
pursuant to Section 11(d)(iii).
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all
holders of Preferred Stock entitling them to subscribe
for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock
(or securities having the same rights, privileges and
preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities
convertible into or exercisable for Preferred Stock (or
equivalent preferred stock) at a price per share of
Preferred Stock (or equivalent preferred stock) (in
each case, taking account of any conversion or exercise
price) less than the current market price (as
determined pursuant to Section 11(d)) per share of
Preferred Stock on such record date, the Purchase Price
to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such date by a fraction, the
numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus
the number of shares of Preferred Stock which the
aggregate price (taking account of any conversion or
exercise price) of the total number of shares of
Preferred Stock (and/or equivalent preferred stock) so
to be offered would purchase at such current market
price and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record
date plus the number of additional shares of Preferred
Stock (and/or equivalent preferred stock) so to be
offered. In case such subscription price may be paid
by delivery of consideration part or all of which shall
be in a form other than cash, the value of such
consideration shall be as determined in good faith by
the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes. Shares of Preferred Stock
owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made
successively whenever such a record date is fixed, and
if such rights, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of
Preferred Stock (including any such distribution made
in connection with a consolidation or merger involving
the Company) of evidences of indebtedness, equity
securities other than Preferred Stock, assets (other
than a regular periodic cash dividend out of the
earnings or retained earnings of the Company) or
rights, options or warrants (excluding those referred
to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator
of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of
Preferred Stock on such record date, less the value (as
determined pursuant to Section 11(d)(iii)) of such
evidences of indebtedness, equity securities, assets,
rights, options or warrants so to be distributed with
respect to one share of Preferred Stock and the
denominator of which shall be such current market price
per share of Preferred Stock. Such adjustment shall be
made successively whenever such a record date is fixed,
and if such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation
hereunder other than computations made pursuant to
Section 11(a)(iii) or 14, the "current market price"
per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share
of such Common Stock for the 30 consecutive Trading
Days immediately prior to but not including such date;
for purposes of computations made pursuant to Section
11(a)(iii), the "current market price" per share of
Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such
Common Stock for the 10 consecutive Trading Days
immediately following but not including such date; and
for purposes of computations made pursuant to Section
14, the "current market price" per share of Common
Stock for any Trading Day shall be deemed to be the
closing price per share of Common Stock for such
Trading Day; provided that if the current market price
per share of the Common Stock is determined during a
period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or
securities exercisable for or convertible into shares
of such Common Stock (other than the Rights), or (B)
any subdivision, combination or reclassification of
such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as
set forth above, after the ex-dividend date for such
dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and
in each such case, the "current market price" shall be
properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as
reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or
admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which the
shares of Common Stock are listed or admitted to
trading or, if the shares of Common Stock are not
listed or admitted to trading on any national
securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other
system then in use or, if on any such date the shares
of Common Stock are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker
making a market in the Common Stock selected by the
Board. If on any such date no market maker is making a
market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the
Board (or, if at the time of such determination there
is an Acquiring Person, by a nationally recognized
investment banking firm) shall be used. If the Common
Stock is not publicly held or not so listed or traded,
the "current market price" per share means the fair
value per share as determined in good faith by the
Board, or, if at the time of such determination there
is an Acquiring Person, by a nationally recognized
investment banking firm, which determination shall be
described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the "current market price" per share of
Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in
Section 11(d)(i) (other than the last sentence
thereof). If the current market price per share
of Preferred Stock cannot be determined in such
manner, the "current market price" per share of
Preferred Stock shall be conclusively deemed to be
an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with
respect to the Common Stock occurring after the
date of this Agreement) multiplied by the current
market price per share of Common Stock (as
determined pursuant to Section 11(d)(i) (other
than the last sentence thereof)). If neither the
Common Stock nor the Preferred Stock is publicly
held or so listed or traded, the "current market
price" per share of the Preferred Stock shall be
determined in the same manner as set forth in the
last sentence of Section 11(d)(i). For all
purposes of this Agreement, the "current market
price" of one one-hundredth of a share of
Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock
divided by 100.
(iii) For the purpose of any computation
hereunder, the value of any securities or assets
other than Common Stock or Preferred Stock shall
be the fair value as determined in good faith by
the Board, or, if at the time of such
determination there is an Acquiring Person, by a
nationally recognized investment banking firm
which determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase
Price; provided that any adjustments which by reason of
this Section 11(e) are not required to be made shall be
carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred
Stock, as the case may be.
(f) If at any time, as a result of an adjustment
made pursuant to Section 11(a)(ii) or Section 13(a),
the holder of any Right shall be entitled to receive
upon exercise of such Right any shares of capital stock
other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject
to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock
contained in Section 11(a), 11(b), 11(c), 11(e), 11(g),
11(h), 11(i), 11(j), 11(k) and 11(m), and the
provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made hereunder shall
evidence the right to purchase, at the Purchase Price
then in effect, the then applicable number of one
one-hundredths of a share of Preferred Stock and other
capital stock of the Company issuable from time to time
hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each
adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and 11(c), each
Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number
of one one-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of
a share for which a Right was exercisable immediately
prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the
number of Rights, in lieu of any adjustment in the
number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for
which such Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price.
The Company shall make a public announcement (with
prompt notice thereof to the Rights Agent) of its
election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10
days later than the date of the public announcement.
If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement
for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof,
if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of
the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths
of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to
express the Purchase Price per one one-hundredth of a
share and the number of shares which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the par
value, if any, of the number of one one-hundredths of a
share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue
fully paid and nonassessable such number of one
one-hundredths of a share of Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be
made effective as of a record date for a specified
event, the Company may elect to defer (with prompt
notice thereof to the Rights Agent) until the
occurrence of such event the issuance to the holder of
any Right exercised after such record date the number
of one one-hundredths of a share of Preferred Stock or
other capital stock of the Company, if any, issuable
upon such exercise over and above the number of one
one-hundredths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided that the
Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's
right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make
such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section
11, as and to the extent that it, in its sole
discretion, shall determine to be advisable in order
that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any Preferred Stock
at less than the current market price, issuance wholly
for cash of Preferred Stock or securities which by
their terms are convertible into or exercisable for
Preferred Stock, stock dividends or issuance of rights,
options or warrants referred to in this Section 11,
hereafter made by the Company to the holders of its
Preferred Stock, shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it will
not at any time after the Distribution Date (i)
consolidate, merge or otherwise combine with or (ii)
sell or otherwise transfer (and/or permit any of its
Subsidiaries to sell or otherwise transfer), in one
transaction or a series of related transactions, assets
or earning power aggregating more than 50% of the
assets or earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or
Persons if (x) at the time of or immediately after such
consolidation, merger, combination or sale there are
any rights, warrants or other instruments or securities
outstanding or any agreements or arrangements in effect
which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger,
combination or sale, the stockholders of a Person who
constitutes, or would constitute, the "Principal Party"
for the purposes of Section 13 shall have received a
distribution of Rights previously owned by such Person
or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after
the Distribution Date, it will not, except as permitted
by Sections 23, 24 and 27, take (or permit any
Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such
action will substantially diminish or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(p) Notwithstanding anything in this Agreement to
the contrary, if at any time after the date hereof and
prior to the Distribution Date the Company shall (i)
pay a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock into a larger
number of shares or (iii) combine the outstanding
Common Stock into a smaller number of shares, the
number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered
thereafter as contemplated by Section 3(c), shall be
proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock
following any such event shall equal the result
obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to
such event by a fraction the numerator of which shall
be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total
number of shares of Common Stock outstanding
immediately following the occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase
Price or Number of Shares . Whenever an adjustment is
made as provided in Sections 11 or 13, the Company
shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts and
computations for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for
the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a certificate
representing shares of Common Stock) in the manner set
forth in Section 26. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained 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.
SECTION 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. (a If,
following the occurrence of a Section 11(a)(ii) Event,
directly or indirectly,
(x) the Company shall consolidate with, merge
into, or otherwise combine with, any other Person,
and the Company shall not be the continuing or
surviving corporation of such consolidation,
merger or combination,
(y) any Person shall merge into, or otherwise
combine with, the Company, and the Company shall
be the continuing or surviving corporation of such
merger or combination and, in connection with such
merger or combination, all or part of the
outstanding shares of Common Stock shall be
changed into or exchanged for other stock or
securities of the Company or any other Person,
cash or any other property, or
(z) the Company and/or one or more of its
Subsidiaries shall sell or otherwise transfer, in
one transaction or a series of related
transactions, assets or earning power aggregating
more than 50% of the assets or earning power of
the Company and its Subsidiaries, taken as a
whole, to any other Person or Persons,
then, and in each such case, proper provision shall
promptly be made so that
(i) each holder of a Right shall thereafter
be entitled to receive, upon exercise thereof at
the Purchase Price in effect immediately prior to
the first occurrence of a Section 11(a)(ii) Event,
such number of duly authorized, validly issued,
fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as
hereinafter defined), not subject to any rights of
call or first refusal, liens, encumbrances or
other claims, as shall be equal to the result
obtained by dividing
(A) the product obtained by multiplying
the Purchase Price in effect immediately
prior to the first occurrence of a Section
11(a)(ii) Event by the number of one
one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately
prior to such first occurrence (such product
being thereafter referred to as the "Purchase
Price" for each Right and for all purposes of
this Agreement) by
(B) 50% of the current market price
(determined pursuant to Section 11(d)(i)) per
share of the Common Stock of such Principal
Party on the date of consummation of such
consolidation, merger, combination, sale or
transfer;
provided, however, that the Purchase Price (as so
adjusted pursuant to the foregoing clause (i)(A)and the
number of shares of Common Stock of such Principal Party so
receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with
Section 11(f) to reflect any events occurring in
respect of the Common Stock of such Principal Party
after the occurrence of such consolidation, merger,
sale or transfer;
(ii) the Principal Party shall thereafter be
liable for, and shall assume, by virtue of such
consolidation, merger, combination, sale or
transfer, all the obligations and duties of the
Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being
specifically intended that the provisions of
Section 11 shall apply only to such Principal
Party following the first occurrence of a Section
13 Event; and
(iv) such Principal Party shall take such
steps (including the authorization and reservation
of a sufficient number of shares of its Common
Stock to permit exercise of all outstanding Rights
in accordance with this Section 13(a)) in
connection with the consummation of any such
transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable
upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described
in Section 13(a)(x) or (y), the Person that is the
issuer of any securities into which shares of
Common Stock of the Company are converted in such
merger, consolidation or combination, and if no
securities are so issued, the Person that survives
or results from such merger, consolidation or
combination; and
(ii) in the case of any transaction described
in Section 13(a)(z), the Person that is the party
receiving the greatest portion of the assets or
earning power transferred pursuant to such
transaction or transactions; provided that
in any such case, (A) if the Common Stock of such
Person is not at such time and has not been
continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to
such other Person; and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are
and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market
value.
(c) The Company shall not consummate any such
consolidation, merger, combination, sale or transfer
unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which
are not outstanding or otherwise reserved for issuance
to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set
forth in Section 13(a) and 13(b) and providing that, as
soon as practicable after the date of any
consolidation, merger, combination, sale or transfer
mentioned in Section 13(a), the Principal Party will:
(i) prepare and file a registration statement
under the Securities Act with respect to the
securities issuable upon exercise of the Rights,
and will use its best efforts to cause such
registration statement (A) to become effective as
soon as practicable after such filing and (B) to
remain effective (with a prospectus at all times
meeting the requirements of the Securities Act)
until the Expiration Date; and
(ii) deliver to holders of the Rights
historical financial statements for the Principal
Party and each of its Affiliates which comply in
all respects with the requirements for
registration on Form 10 under the Exchange Act.
SECTION 14. Fractional Rights and Fractional
Shares. (a) The Company shall not be required to
issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p), or to
distribute Right Certificates which evidence fractional
Rights. In lieu of any such fractional Rights, the
Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional
Rights would otherwise be issuable an amount in cash
equal to the same fraction of the current market price
of a whole Right. For purposes of this Section 14(a),
the current market price of a whole Right shall be the
closing price of a Right for the Trading Day
immediately prior to the date on which such fractional
Rights would otherwise have been issuable. The closing
price of a Right for any day shall be the last sale
price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New
York Stock Exchange, on the principal national
securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the
Rights are not quoted by any such organization, the
average of the closing bid and asked prices as
furnished by a professional market maker making a
market in the Rights selected by the Board. If on any
such date no such market maker is making a market in
the Rights, the current market price of the Rights on
such date shall be as determined in good faith by the
Board, or, if at the time of such determination there
is an Acquiring Person, by a nationally recognized
investment banking firm.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than
fractions which are multiples of one one-hundredth of a
share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which
are multiples of one one-hundredth of a share of
Preferred Stock). In lieu of any such fractional
shares of Preferred Stock, the Company shall pay to the
registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current
market price of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b),
the current market price of one one-hundredth of a
share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of any Triggering
Event or upon any exchange pursuant to Section 24, the
Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or
to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares
of Common Stock, the Company shall pay to the
registered holders of Right Certificates at the time
such Rights are exercised or exchanged as herein
provided an amount in cash equal to the same fraction
of the current market price of a share of Common Stock.
For purposes of this Section 14(c), the current market
price of a share of Common Stock shall be the closing
price of a share of Common Stock (as determined
pursuant to Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise or
exchange.
(d) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any
fractional Rights or any fractional shares upon
exercise of a Right except as permitted by this Section
14.
SECTION 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered
holders of certificates representing Common Stock); and
any registered holder of any Right Certificate (or,
prior to the Distribution Date, of any certificate
representing Common Stock), without the consent of the
Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of any
certificate representing Common Stock), may, in his own
behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced
by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and will be
entitled to specific performance of the obligations
under, and injunctive relief against actual or
threatened violations of the obligations of any Person
subject to, this Agreement.
SECTION 16. Agreement of Right Holders. Every
holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the
Rights will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the
office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate
forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company
and the Rights Agent may deem and treat the Person
in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing
shares of Common Stock) is registered as the
absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or
the certificate representing shares of Common
Stock made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject
to the last sentence of Section 7(d), shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this
Agreement to the contrary, neither the Company nor
the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of
its inability to perform any of its obligations
under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative
agency or commission, or any statute, rule,
regulation or executive order promulgated or
enacted by any governmental authority prohibiting
or otherwise restraining performance of such
obligation; provided that the Company must use its
best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as
possible.
SECTION 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right
Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of
the shares of capital stock which may at any time be
issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the
rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance
with the provisions hereof.
SECTION 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees
and disbursements and other disbursements incurred in
the execution, preparation, delivery, amendment, or
administration of this Agreement and the exercise and
performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement,
cost, or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights
Agent, for any action taken, suffered, or omitted by
the Rights Agent in connection with the administration
of this Agreement or the exercise or performance of its
duties hereunder, including the costs and expenses of
defending against any claim of liability.
(b) The Rights Agent shall be authorized and
protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it
in connection with its acceptance and administration of
this Agreement or the exercise or performance of its
duties hereunder in reliance upon any Right Certificate
or certificate for Common Stock or for other securities
of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter,
notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to
be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper
Person or Persons.
(c) 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
to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the
likelihood of such loss or damage.
SECTION 19. Merger or Consolidation or Change of
Name of Rights Agents. (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
business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any
paper or any further act on the part of any of the
parties hereto; provided that such Person would be
eligible for appointment as a successor Rights Agent
under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and
deliver such Right Certificates so countersigned; and
in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force
provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the
Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its
changed name; and in all such cases such Right
Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights
Agent undertakes only the duties and obligations
expressly imposed by this Agreement upon the following
terms and conditions, by all of which the Company and
the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the
Company), and the 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 by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter
(including, without limitation, the identity of
any "Acquiring Person" and the determination of
"current market price") be proved or established
by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact
or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established
by a certificate signed by either Co- Chairmen of
the Board, the President or any Executive Vice
President, Senior Vice President or Vice President
and by the Treasurer or any Assistant Treasurer or
the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and
such certificate shall be full authorization 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 in good
faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith
or willful misconduct.
(d) The Rights Agent shall not be liable for
or by reason of any of the statements of fact or
recitals contained in this Agreement or in the
Right Certificates (except its countersignature
thereof) or be required to verify the same, but
all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
liability or responsibility in respect of the
validity of this Agreement or the execution and
delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the validity
or execution of any Right Certificate (except its
countersignature thereof); nor shall it be
responsible for any breach by the Company of any
covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be
responsible for any change in the exercisability
of the Rights (including the Rights becoming null
and void pursuant to Section 7(d)) or any
adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for
in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would
require any such adjustment (except with respect
to the exercise of Rights evidenced by Right
Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as
to the authorization or reservation of any shares
of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Right
Certificate or as to whether any shares of Common
Stock or Preferred Stock will, when issued, be
duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered
all such further and other acts, instruments and
assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to
the performance of its duties hereunder from
either Co-Chairmen of the Board, the President or
any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any
Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in
connection with its duties, and it shall not be
liable for any action taken, suffered or omitted
to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder,
director, affiliate, officer or employee of the
Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or
become pecuniarily interested in any transaction
in which the Company may be interested, or
contract with or lend money to the Company or
otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company
or for any other Person.
(i) The Rights Agent may execute and exercise
any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the
Company or to any holders of Rights resulting from
any such act, default, neglect or misconduct;
absent negligence, bad faith or wilful misconduct
in the selection and continued employment thereof.
(j) No provision of this Agreement shall
require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability
in the performance of any of its duties hereunder
or in the exercise of its rights if it believes
that repayment of such funds or adequate
indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of
assignment or form of election to purchase, as the
case may be, has either not been completed or
indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any
further action with respect to such requested
exercise or transfer without first consulting with
the Company.
SECTION 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30
days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock and Preferred
Stock by registered or certified mail, and, subsequent
to the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock and
Preferred Stock by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of
the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal
or after it has been notified in writing of such
resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by
such a court, shall be (a a Person organized and doing
business under the laws of the United States or of any
state of the United States, in good standing, which is
subject to supervision or examination by federal or
state authority and which has at the time of its
appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an Affiliate of
a corporation described in clause 21(a). After
appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and
responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of
any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the
Preferred Stock, and, subsequent to the Distribution
Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, or
any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent,
as the case may be.
SECTION 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement
or of the Rights to the contrary, the Company may, at
its option, issue new Right Certificates evidencing
Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares of stock
issuable upon exercise of the Rights made in accordance
with the provisions of this Agreement.
SECTION 23. Redemption. (a) The Board may, at
its option, at any time prior to the earlier of (i) the
occurrence of a Section 11(a)(ii) Event and (ii) the
Final Expiration Date, redeem all but not less than all
the then outstanding Rights at a redemption price of
$.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as
the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and
with such conditions as the Board in its sole
discretion may establish. The Redemption Price shall
be payable, at the option of the Company, in cash,
shares of Common Stock or such other form of
consideration as the Board shall determine.
(b) Immediately upon the action of the Board
electing to redeem the Rights (or at such later time as
the Board may establish for the effectiveness of such
redemption), and without any further action and without
any notice, the right to exercise the Rights will
terminate and thereafter the only right of the holders
of Rights shall be to receive the Redemption Price for
each Right so held. The Company shall promptly
thereafter give notice of such redemption to the Rights
Agent and the holders of the Rights in the manner set
forth in Section 26; provided that the failure to give,
or any defect in, such notice shall not affect the
validity of such redemption. Any notice which is
mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
SECTION 24. Exchange. (a) At any time after the
occurrence of a Section 11(a)(ii) Event, the Board may,
at its option, exchange all or part of the then
outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant
to Section 7(d)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board shall not be empowered to
effect such exchange at any time after an Acquiring
Person, together with all Affiliates and Associates of
such Acquiring Person, becomes the Beneficial Owner of
50% or more of the shares of Common Stock then
outstanding. From and after the occurrence of a
Section 13 Event, any Rights that theretofore have not
been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this
Section 24(a). The exchange of the Rights by the Board
may be made effective at such time, on such basis and
with such conditions as the Board in its sole
discretion may establish.
(b) Immediately upon the effectiveness of the
action of the Board electing to exchange any Rights
pursuant to Section 24(a) and without any further
action and without any notice, the right to exercise
such Rights will terminate and thereafter the only
right of the holders of such Rights shall be to receive
that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly
thereafter give notice of such exchange to the Rights
Agent and the holders of the Rights to be exchanged in
the manner set forth in Section 26; provided that the
failure to give, or any defect in, such notice shall
not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will
be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than
Rights which have become void pursuant to Section 7(d))
held by each holder of Rights.
(c) The Company may at its option substitute, and,
in the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or
authorized but unissued to permit the exchange of
Rights for Common Stock ordered in accordance with
Section 24(a), the Company shall substitute to the
extent of such insufficiency, for each share of Common
Stock that would otherwise be issuable upon exchange of
a Right, a number of one-one hundredths of a share of
Preferred Stock such that the current market price
(determined pursuant to Section 11(d)) of such number
of one-one hundredths of a share of Preferred Stock is
equal to the current market price (determined pursuant
to Section 11(d)) of one share of Common Stock as of
the date of such exchange.
SECTION 25. Notice of Proposed Actions. (a) In
case the Company shall propose, at any time after the
Distribution Date, (i to pay any dividend payable in
stock of any class to the holders of Preferred Stock or
to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the
Company), or (ii to offer to the holders of its
Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities,
rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or
combination of outstanding shares of Preferred Stock)
or (iv) to effect any consolidation or merger with any
other Person, or to effect and/or to permit one or more
of its Subsidiaries to effect any sale or other
transfer, in one transaction or a series of related
transactions, of assets or earning power aggregating
more than 50% of the assets or earning power of the
Company and its Subsidiaries, taken as a whole, to any
other Person or Persons, or (v) to effect the
liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to the
Rights Agent and to each holder of a Right, in
accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the
purposes of any such dividend, distribution or offering
of rights or warrants, or the date on which any such
reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to
take place and the date of participation therein by the
holders of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of
any action covered by clause 25(a)(i) or 25(a)(ii)
above at least 20 days prior to the record date for
determining holders of the Preferred Stock entitled to
participate in such dividend, distribution or offering,
and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed
action or the date of participation therein by the
holders of Preferred Stock, whichever shall be the
earlier. The failure to give notice required by this
Section or any defect therein shall not affect the
legality or validity of the action taken by the Company
or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to
the contrary, prior to the Distribution Date a public
filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the
holders of securities of the Company, including the
Rights, for purposes of this Agreement and no other
notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in
any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Right,
in accordance with Section 26, a notice of the
occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights
under Section 11(a)(ii) or 13, as the case may be, and
(ii) all references in Section 25(a) to Preferred Stock
shall be deemed thereafter to refer to Common Stock or
other capital stock, as the case may be.
SECTION 26. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right to or on the
Company shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of
the Company indicated on the signature page hereof or
such other address as the Company shall specify in
writing to the Rights Agent. Subject to the provisions
of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the
holder of any Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail
(postage prepaid) to the address of the Rights Agent
indicated on the signature page hereof or such other
address as the Rights Agent shall specify in writing to
the Company. Notices or demands authorized by this
Agreement to be given or made by the Company or the
Rights Agent to the holder of any Right Certificate
(or, prior to the Distribution Date, to the holder of
any certificate representing shares of Common Stock)
shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of
such holder shown on the registry books of the Company.
SECTION 27. Supplements and Amendments. For so
long as the Rights are then redeemable, the Company
may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this
Agreement in any respect without the approval of any
holders of certificates representing shares of Common
Stock. At any time when the Rights are no longer
redeemable, the Company may, and the Rights Agent shall
if the Company so directs, supplement or amend this
Agreement without the approval of any holders of
Rights; provided, however, that no such supplement or
amendment may (a) adversely affect the interests of the
holders of Rights as such (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring
Person), (b) cause this Agreement again to become
amendable other than in accordance with this sentence,
or (c) cause the Rights again to become redeemable.
Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms
of this Section, and if requested by the Rights Agent,
an opinion of counsel, the Rights Agent shall execute
such supplement or amendment. Notwithstanding the
foregoing, the Rights Agent shall not be required to
execute or deliver any supplement or amendment that
changes or increases the Rights Agent's duties,
liabilities or obligations.
SECTION 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns
hereunder.
SECTION 29. Determinations and Actions by the
Board, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock
outstanding at any particular time, including for
purposes of determining the particular percentage of
such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule
13d-3(d)(1)(i) under the Exchange Act as in effect on
the date of this Agreement. The Board shall have the
exclusive power and authority to administer this
Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or
as may be necessary or advisable in the administration
of this Agreement, including the right and power to (i)
interpret the provisions of this Agreement and (ii)
make all determinations deemed necessary or advisable
for the administration of this Agreement (including a
determination to redeem or exchange or not to redeem or
exchange the Rights or to amend the Agreement).
SECTION 30. Benefits of this Agreement. Nothing
in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and,
prior to the Distribution Date, the certificates
representing the shares of Common Stock) any legal or
equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and,
prior to the Distribution Date, the certificates
representing the shares of Common Stock).
SECTION 31. Severability. If any term,
provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 32. Governing Law. This Agreement, each
Right and each Right Certificate issued hereunder shall
be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws
of such State applicable to contracts to be made and
performed entirely within such State; 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 within such State.
SECTION 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together
constitute one and the same instrument.
SECTION 34. Descriptive Headings. The captions
herein are included for convenience of reference only,
do not constitute a part of this Agreement and shall be
ignored in the construction and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
MCMORAN EXPLORATION CO.
By:
--------------------------
Xxxxxxx X. Xxxxxxxx,
Co-Chairman of the Board,President
and Chief Executive Officer
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Secretary
ChaseMellon Shareholder Services, L.L.C.
as successor to
Mellon Securities Trust Company
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name:Xxxxxx X. Xxxxxx
Title:Vice President
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
MCMORAN EXPLORATION CO.
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
We, Xxxxxxx X. Xxxxxxxx, Co-Chairman, President
and Chief Executive Officer, and Xxxxxxx X. Xxxxxxxxxx,
Xx., Secretary, of McMoRan Exploration Co., a
corporation organized and existing under the General
Corporation Law of the State of Delaware ("Delaware
Law"), in accordance with the provisions thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Board of Directors by the Certificate of Incorporation
of the Corporation, the Board of Directors duly adopted
the following resolution creating a series of Preferred
Stock in the amount and having the designations, voting
powers, preferences and relative, participating,
optional and other special rights and qualifications,
limitations and restrictions thereof as follows:
SECTION 1. Designation and Number of Shares. The
shares of such series shall be designated as "Series A
Participating Cumulative Preferred Stock" (the "Series
A Preferred Stock"), and the number of shares
constituting such series shall be 1,000,000. Such
number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of
Directors; provided that no decrease shall reduce the
number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding
plus the number of shares issuable upon exercise or
conversion of outstanding rights, options or other
securities issued by the Corporation.
SECTION 2. Dividends and Distributions.
(a) The holders of shares of Series A
Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors
out of funds legally available for the purpose,
quarterly dividends payable on December 1, March
1, June 1 and September 1 of each year (each such
date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first
issuance of any share or fraction of a share of
Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater
of (i) $1.00 and (ii) subject to the provision for
adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends
or other distributions and 100 times the aggregate
per share amount of all non-cash dividends or
other distributions (other than (A) a dividend
payable in shares of Common Stock, par value $0.01
per share, of the Corporation (the "Common Stock")
or (B) a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise)),
declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred
Stock. If the Corporation shall at any time after
November 13, 1998 (the "Rights Declaration Date")
pay any dividend on Common Stock payable in shares
of Common Stock or effect a subdivision or
combination of the outstanding shares of Common
Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common
Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under
clause 2(a)(ii) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
(b) The Corporation shall declare a dividend
or distribution on the Series A Preferred Stock as
provided in paragraph 2(a) above immediately after
it declares a dividend or distribution on the
Common Stock (other than as described in clauses
2(a)(ii)(A) and 2(a)(ii)(B) above); provided that
if no dividend or distribution shall have been
declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment
Date (or, with respect to the first Quarterly
Dividend Payment Date, the period between the
first issuance of any share or fraction of a share
of Series A Preferred Stock and such first
Quarterly Dividend Payment Date), a dividend of
$1.00 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of
such shares of Series A Preferred Stock, unless
the date of issue of such shares is on or before
the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such
shares shall begin to accrue and be cumulative
from the date of issue of such shares, or unless
the date of issue is a date after the record date
for the determination of holders of shares of
Series A Preferred Stock entitled to receive a
quarterly dividend and on or before such Quarterly
Dividend Payment Date, in which case dividends
shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest.
Dividends paid on shares of Series A Preferred
Stock in an amount less than the total amount of
such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a
record date for the determination of holders of
shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution
declared thereon, which record date shall not be
more than 60 days prior to the date fixed for the
payment thereof.
SECTION 3. Voting Rights. In addition to any
other voting rights required by law, the holders of
shares of Series A Preferred Stock shall have the
following voting rights:
(a) Subject to the provision for adjustment
hereinafter set forth, each share of Series A
Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of
stockholders of the Corporation. If the
Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock
payable in shares of Common Stock or effect a
subdivision or combination of the outstanding
shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the
number of votes per share to which holders of
shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted
by multiplying such number by a fraction the
numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
(b) Except as otherwise provided herein or by
law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock
shall vote together as a single class on all
matters submitted to a vote of stockholders of the
Corporation.
(c) (i) If at any time dividends on any
Series A Preferred Stock shall be in arrears in an
amount equal to six quarterly dividends thereon,
the occurrence of such contingency shall xxxx the
beginning of a period (herein called a "default
period") which shall extend until such time when
all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current
quarterly dividend period on all shares of Series
A Preferred Stock then outstanding shall have been
declared and paid or set apart for payment.
During each default period, all holders of
Preferred Stock and any other series of Preferred
Stock then entitled as a class to elect directors,
voting together as a single class, irrespective of
series, shall have the right to elect two
Directors.
(ii) During any default period, such
voting right of the holders of Series A
Preferred Stock may be exercised initially at
a special meeting called pursuant to
subparagraph 3(c)(iii) hereof or at any
annual meeting of stockholders, and
thereafter at annual meetings of
stockholders; provided that neither such
voting right nor the right of the holders of
any other series of Preferred Stock, if any,
to increase, in certain cases, the authorized
number of Directors shall be exercised unless
the holders of 10% in number of shares of
Preferred Stock outstanding shall be present
in person or by proxy. The absence of a
quorum of holders of Common Stock shall not
affect the exercise by holders of Preferred
Stock of such voting right. At any meeting
at which holders of Preferred Stock shall
exercise such voting right initially during
an existing default period, they shall have
the right, voting as a class, to elect
Directors to fill such vacancies, if any, in
the Board of Directors as may then exist up
to two Directors or, if such right is
exercised at an annual meeting, to elect two
Directors. If the number which may be so
elected at any special meeting does not
amount to the required number, the holders of
the Preferred Stock shall have the right to
make such increase in the number of Directors
as shall be necessary to permit the election
by them of the required number. After the
holders of the Preferred Stock shall have
exercised their right to elect Directors in
any default period and during the continuance
of such period, the number of Directors shall
not be increased or decreased except by vote
of the holders of Preferred Stock as herein
provided or pursuant to the rights of any
equity securities ranking senior to or pari
passu with the Series A Preferred Stock.
(iii) Unless the holders of Preferred
Stock shall, during an existing default
period, have previously exercised their right
to elect Directors, the Board of Directors
may order, or any stockholder or stockholders
owning in the aggregate not less than 10% of
the total number of shares of Preferred Stock
outstanding, irrespective of series, may
request, the calling of a special meeting of
holders of Preferred Stock, which meeting
shall thereupon be called by either Co-
Chairman of the Board, the President and
Chief Executive Officer, an Executive Vice
President, a Senior Vice President, a Vice
President or the Secretary of the
Corporation. Notice of such meeting and of
any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant
to this paragraph 3(c)(iii) shall be given to
each holder of record of Preferred Stock by
mailing a copy of such notice to him at his
last address as the same appears on the books
of the Corporation. Such meeting shall be
called for a time not earlier than 20 days
and not later than 60 days after such order
or request or in default of the calling of
such meeting within 60 days after such order
or request, such meeting may be called on
similar notice by any stockholder or
stockholders owning in the aggregate not less
than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of
series. Notwithstanding the provisions of
this paragraph 3(c)(iii), no such special
meeting shall be called during the period
within 60 days immediately preceding the date
fixed for the next annual meeting of
stockholders.
(iv) In any default period, the holders
of Common Stock, and other classes of stock
of the Corporation if applicable, shall
continue to be entitled to elect the whole
number of Directors until the holders of
Preferred Stock shall have exercised their
right to elect two Directors voting as a
class, after the exercise of which right (x)
the Directors so elected by the holders of
Preferred Stock shall continue in office
until their successors shall have been
elected by such holders or until the
expiration of the default period, and (y) any
vacancy in the Board of Directors may (except
as provided in paragraph 3(c)(ii) hereof) be
filled by vote of a majority of the remaining
Directors theretofore elected by the holders
of the class of stock which elected the
Director whose office shall have become
vacant. References in this paragraph 3(c) to
Directors elected by the holders of a
particular class of stock shall include
Directors elected by such Directors to fill
vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of a
default period, (x) the right of the holders
of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the
number of Directors shall be such number as
may be provided for in the certificate of
incorporation or bylaws irrespective of any
increase made pursuant to the provisions of
paragraph 3(c)(ii) hereof (such number being
subject, however, to change thereafter in any
manner provided by law or in the certificate
of incorporation or bylaws). Any vacancies
in the Board of Directors effected by the
provisions of clauses (y) and (z) in the
preceding sentence may be filled by a
majority of the remaining Directors.
(d) The Certificate of Incorporation of the
Corporation shall not be amended in any manner
(whether by merger or otherwise) so as to
adversely affect the powers, preferences or
special rights of the Series A Preferred Stock
without the affirmative vote of the holders of a
majority of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
(e) Except as otherwise provided herein,
holders of Series A Preferred Stock shall have no
special voting rights, and their consent shall not
be required for taking any corporate action.
SECTION 4. Certain Restrictions.
(a) Whenever quarterly dividends or other
dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not
declared, on outstanding shares of Series A
Preferred Stock shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, or make
any other distributions on, any shares of
stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make
any other distributions on, any shares of
stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred
Stock, except dividends paid ratably on the
Series A Preferred Stock and all such other
parity stock on which dividends are payable
or in arrears in proportion to the total
amounts to which the holders of all such
shares are then entitled;
(iii) redeem, purchase or otherwise
acquire for value any shares of stock ranking
junior (either as to dividends or upon
liquidation, dissolution or winding up) to
the Series A Preferred Stock; provided that
the Corporation may at any time redeem,
purchase or otherwise acquire shares of any
such junior stock in exchange for shares of
stock of the Corporation ranking junior (as
to dividends and upon dissolution,
liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem, purchase or otherwise
acquire for value any shares of Series A
Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except
in accordance with a purchase offer made in
writing or by publication (as determined by
the Board of Directors) to all holders of
Series A Preferred Stock and all such other
parity stock upon such terms as the Board of
Directors, after consideration of the
respective annual dividend rates and other
relative rights and preferences of the
respective series and classes, shall
determine in good faith will result in fair
and equitable treatment among the respective
series or classes.
(b) The Corporation shall not permit any
subsidiary of the Corporation to purchase or
otherwise acquire for value any shares of stock of
the Corporation unless the Corporation could,
under paragraph 4(a), purchase or otherwise
acquire such shares at such time and in such
manner.
SECTION 5. Reacquired Shares. Any shares of
Series A Preferred Stock redeemed, purchased or
otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after
the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued
shares of Preferred Stock without designation as to
series and may be reissued as part of a new series of
Preferred Stock to be created by resolution or
resolutions of the Board of Directors as permitted by
the Certificate of Incorporation or as otherwise
permitted under Delaware Law.
SECTION 6. Liquidation, Dissolution and Winding
Up. Upon any liquidation, dissolution or winding up of
the Corporation, no distribution shall be made (1) to
the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A
Preferred Stock shall have received $0.01 per share,
plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to
the date of such payment; provided that the holders of
shares of Series A Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per
share to holders of Common Stock, or (2) to the holders
of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such
other parity stock in proportion to the total amounts
to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up. If
the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock
payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the
proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of
Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
SECTION 7. Consolidation, Merger, Etc. If the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other
stock or securities, cash or any other property, then
in any such case the shares of Series A Preferred Stock
shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount of stock, securities,
cash or any other property, as the case may be, into
which or for which each share of Common Stock is
changed or exchanged. If the Corporation shall at any
time after the Rights Declaration Date pay any dividend
on Common Stock payable in shares of Common Stock or
effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set
forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such
event and the denominator of which is the number of
shares of Common Stock that were outstanding
immediately prior to such event.
SECTION 8. No Redemption. The Series A Preferred
Stock shall not be redeemable.
SECTION 9. Rank. The Series A Preferred Stock
shall rank junior (as to dividends and upon
liquidation, dissolution and winding up) to all other
series of the Corporation's preferred stock except any
series that specifically provides that such series
shall rank junior to the Series A Preferred Stock.
SECTION 10. Fractional Shares. Series A
Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to
have the benefit of all other rights of holders of
Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and
subscribed this Certificate this 13th day of November,
1998.
McMoRan Exploration Co.
By: /s/Xxxxxxx X. Xxxxxxxx
___________________________
Xxxxxxx X. Xxxxxxxx
Co-Chairman of the Board, President
and Chief Executive Officer
By: /s/Xxxxxxx X. Xxxxxxxxxx, Xx.
___________________________
Xxxxxxx X. Xxxxxxxxxx, Xx.
Secretary
EXHIBIT B
FORM OF RIGHT CERTIFICATE
No. R-______________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF NOVEMBER 13, 2008
AND THE DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE
REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN
THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED OR TRANSFERRED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BE NULL AND VOID.
RIGHT CERTIFICATE
MCMORAN EXPLORATION CO.
This Right Certificate certifies that
______________________, or registered assigns, is the
registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the
terms and subject to the conditions set forth in the
Rights Agreement dated as of November 13, 1998 and as
amended from time to time (the "Rights Agreement")
between McMoRan Exploration Co., a Delaware corporation
(the "Company"), and ChaseMellon Shareholder Services,
L.L.C., as successor to Mellon Securities Trust Company
(the "Rights Agent")) to purchase from the Company, at
any time after the Distribution Date and prior to the
Expiration Date, ____ one-hundredth[s] of a fully paid,
nonassessable share of Series A Participating
Cumulative Preferred Stock (the "Preferred Stock") of
the Company at a purchase price of $80.00 per one
one-hundredth of a share (the "Purchase Price"),
payable in lawful money of the United States of
America, upon surrender of this Right Certificate, with
the form of election to purchase and related
certificate duly executed, and payment of the Purchase
Price at an office of the Rights Agent designated for
such purpose.
Terms used herein and not otherwise defined herein
have the meanings assigned to them in the Rights
Agreement.
The number of Rights evidenced by this Right
Certificate (and the number and kind of shares issuable
upon exercise of each Right) and the Purchase Price set
forth above are as of ________, ____, and may have been
or in the future be adjusted as a result of the
occurrence of certain events, as more fully provided in
the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event,
if the Rights evidenced by this Right Certificate are
beneficially owned by (a) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (b) a
transferee of an Acquiring Person (or any such
Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a
transferee of an Acquiring Person (or any such
Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming
such, such Rights shall become null and void, and no
holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section
11(a)(ii) Event.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is
hereby made for a full description of the rights,
limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates, which
limitations of rights include the temporary suspension
of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement.
Upon surrender at the office of the Rights Agent
designated for such purpose and subject to the terms
and conditions set forth in the Rights Agreement, any
Rights Certificate or Certificates may be transferred
or exchanged for another Rights Certificate or
Certificates evidencing a like number of Rights as the
Rights Certificate or Certificates surrendered.
Subject to the provisions of the Rights Agreement,
the Board of Directors of the Company may, at its
option,
(a) at any time prior to the earlier of (i)
the occurrence of a Section 11(a)(ii) Event and
(ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a
redemption price of $.01 per Right; or
(b) at any time after any Person becomes an
Acquiring Person (but before such Person becomes
the Beneficial Owner of 50% or more of the shares
of Common Stock then outstanding), exchange all or
part of the then outstanding Rights (other than
Rights held by the Acquiring Person and certain
related Persons) for shares of Common Stock at an
exchange ratio of one share of Common Stock per
Right. If the Rights shall be exchanged in part,
the holder of this Right Certificate shall be
entitled to receive upon surrender hereof another
Right Certificate or Certificates for the number
of whole Rights not exchanged.
No fractional shares of Preferred Stock are
required to be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in
lieu thereof a cash payment will be made, as provided
in the Rights Agreement. If this Right Certificate
shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right
Certificate or Certificates for the number of whole
Rights not exercised.
No holder of this Right Certificate shall be
entitled to vote, receive dividends or be deemed for
any purpose the holder of the shares of capital stock
which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting
stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal
by one of its authorized officers.
Dated as of, ____
McMoRan Exploration Co.
By:___________________
[Seal] Name:
Title:
Countersigned:
ChaseMellon Shareholder Services, L.L.C.,
as successor to
Mellon Securities Trust Company,
as Rights Agent
By:
______________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably
constitute and appoint ______________________ Attorney,
to transfer the within Right Certificate on the books
of the within-named Company, with full power of
substitution.
Dated: _____________________, 19__
______________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
___are ___are not being assigned by or on behalf of a
Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it ___did ___did not acquire the
Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____
_______________________
Signature
The signatures to the foregoing Assignment and
Certificate must correspond to the name as written upon
the face of this Right Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to
exercise Rights represented by the Right Certificate.)
To: MCMORAN EXPLORATION CO.
The undersigned hereby irrevocably elects to
exercise ____________ Rights represented by this Right
Certificate to purchase shares of Preferred Stock
issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and
requests that certificates for such securities be
issued in the name of and delivered to:
Please insert social security
or other identifying number
_________________________________________________
(Please print name and address)
If such number of Rights shall not be all the
Rights evidenced by this Right Certificate, a new Right
Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ________________, 19__
________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
___are ___are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it ___did ___did not acquire the
Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________, ____
Signature
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon
the face of this Right Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
EXHIBIT C
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR
TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BE NULL AND VOID.
SUMMARY OF RIGHTS
MCMORAN EXPLORATION CO.
STOCKHOLDER RIGHTS PLAN
Summary of Terms
Form of Security The Board has declared a dividend
of one preferred stock purchase
right for each outstanding share
of the Company's Common Stock,
payable to holders of record as of
the Close of Business on November
13, 1998 (each a "Right" and
collectively, the "Rights")
Transfer Prior to the Distribution Date1,
generally will be evidenced by the
1 Distribution Date generally means the earlier
of:
(1)the 10th day after public announcement that
any person or group has become the beneficial
owner of the Threshold Percentage or more of the
certificates for and will be
transferred with the Common Stock,
and the registered holders of the
Common Stock will be deemed to be
the registered holders of the
Rights.
After the Distribution Date, the
Rights Agent will mail separate
certificates evidencing the Rights
to each record holder of the
Common Stock as of the Close of
Business on the Distribution Date,
and thereafter the Rights will be
transferable separately from the
Common Stock.
Exercise Prior to the Distribution Date,
the Rights will not be
exercisable.
After the Distribution Date, prior
to the occurrence of an event
described below under "Flip-In"
and "Flip-Over", each Right will
be exercisable to purchase, for
$80.00 (the "Purchase Price"), one
one-hundredth of a share of Series
A Participating Cumulative
Preferred Stock, par value $0.01
per share, of the Company.
Flip-In Subject to certain exceptions, if
any person or group (an "Acquiring
Person") becomes the beneficial
owner of the Threshold Percentage
Company's Common Stock; and
(2)the 10th business day after the date of the
commencement of a tender or exchange offer by any
person which would, if consummated, result in such
person becoming the beneficial owner of the
Threshold Percentage or more of the Company's
Common Stock.
or more of the Company's Common
Stock, then each Right (other than
Rights beneficially owned by the
Acquiring Person and certain
affiliated persons) will entitle
the holder to purchase, for the
Purchase Price, a number of shares
of the Company's Common Stock
having a market value of twice the
Purchase Price. "Threshold
Percentage" means (i) 20% with
respect to Alpine Capital, L.P.,
Xxxxxx X. Xxxxx III, Algenpar,
Inc., X. Xxxxxx Xxxxxxxx,
Keystone, Inc., Xxxxxx X. Xxxx and
their respective Affiliates and
Associates and (ii) 15% with
respect to any other Person and
its Affiliates and Associates.
Flip-Over If, after any person has become an
Acquiring Person, (1) the Company
is involved in a merger or other
business combination in which the
Company is not the surviving
corporation or its Common Stock is
exchanged for other securities or
assets or (2) the Company and/or
one or more of its subsidiaries
sell or otherwise transfer assets
or earning power aggregating more
than 50% of the assets or earning
power of the Company and its
subsidiaries, taken as a whole,
then each Right will entitle the
holder to purchase, for the
Purchase Price, a number of shares
of common stock of the other party
to such business combination or
sale (or in certain circumstances,
an affiliate) having a market
value of twice the Purchase Price.
Exchange At any time after any person has
become an Acquiring Person (but
before any person becomes the
beneficial owner of 50% or more of
the Company's Common Stock), the
Board may exchange all or part of
the Rights (other than the Rights
beneficially owned by the
Acquiring Person and certain
affiliated persons) for shares of
Common Stock at an exchange ratio
of one share of Common Stock per
Right.
Redemption The Board may redeem all of the
Rights at a price of $0.01 per
Right at any time prior to the
time that any person becomes an
Acquiring Person.
Expiration The Rights will expire on November
13, 2008, unless earlier exchanged
or redeemed.
Amendments For so long as the Rights are
redeemable, the Rights Agreement
may be amended in any respect.
At any time after the Rights are
no longer redeemable, the Rights
Agreement may not be amended in
any respect that would adversely
affect the Rights holders (other
than any Acquiring Person and
certain affiliated persons) or
cause the Rights again to become
redeemable.
Voting Rights A rights holder has no rights as a
stockholder of the Company,
including the right to vote and to
receive dividends.
Antidilution Provisions The Rights Agreement includes
standard antidilution provisions
designed to protect the efficacy
of the Rights.
Taxes While the dividend of the Rights
will not be taxable to
stockholders or to the Company,
stockholders or the Company may,
depending upon the circumstances,
recognize taxable income in the
event that the Rights become
exercisable as set forth above.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. A copy of the
Rights Agreement is available free of charge from the
Company. This summary description of the Rights does
not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, as
amended from time to time, the complete terms of which
are hereby incorporated by reference.
