EXHIBIT 4.1
AMENDED AND RESTATED
RIGHTS AGREEMENT
ROWAN COMPANIES, INC.
AND
CITIBANK, N.A., AS RIGHTS AGENT
AMENDED AND RESTATED RIGHTS AGREEMENT
DATED AS OF JANUARY 24, 2002
TABLE OF CONTENTS
Section 1. Certain Definitions.............................................................................2
Section 2. Appointment of Rights Agent.....................................................................6
Section 3. Issue of Rights Certificates....................................................................6
Section 4. Form of Rights Certificates.....................................................................8
Section 5. Countersignature and Registration...............................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates...................................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................................10
Section 8. Cancellation and Destruction of Rights Certificates............................................12
Section 9. Availability of Junior Preferred Stock.........................................................12
Section 10. Junior Preferred Stock Record Date.............................................................13
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights.............................13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................................23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........................23
Section 14. Fractional Rights and Fractional Shares........................................................26
Section 15. Rights of Action...............................................................................27
Section 16. Agreement of Right Holders.....................................................................28
Section 17. Rights Certificate Holder Not Deemed a Stockholder.............................................28
Section 18. Concerning the Rights Agent....................................................................29
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................29
Section 20. Duties of Rights Agent.........................................................................30
Section 21. Change of Rights Agent.........................................................................33
Section 22. Issuance of New Rights Certificates............................................................34
Section 23. Redemption.....................................................................................35
Section 24. Exchange.......................................................................................36
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Section 25. Notice of Certain Events.......................................................................37
Section 26. Notices........................................................................................38
Section 27. Supplements and Amendments.....................................................................39
Section 28. Successors.....................................................................................40
Section 29. Determination and Actions by the Board of Directors............................................40
Section 30. Benefits of this
Rights Agreement..............................................................40
Section 31. Severability...................................................................................41
Section 32. Governing Law..................................................................................41
Section 33. Counterparts...................................................................................41
Section 34. Descriptive Headings...........................................................................41
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AMENDED AND RESTATED
RIGHTS AGREEMENT
This Amended and Restated
Rights Agreement, dated as of January 24,
2002, is by and between Rowan Companies, Inc., a
Delaware corporation (the
"Company"), and Citibank, N.A., as rights agent (the "Rights Agent").
RECITALS:
WHEREAS, the Company and the Rights Agent have previously entered into
a
Rights Agreement, dated as of February 25, 1992, as amended (the "Original
Rights Agreement");
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interest of the Company and its stockholders to further amend and
to restate the Original
Rights Agreement as set forth below;
WHEREAS, Section 26 of the Original
Rights Agreement provides that
prior to the Distribution Date (as defined below) and subject to certain
exceptions, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of the Original
Rights Agreement without the
approval of any holders of certificates representing shares of Company Common
Stock;
WHEREAS, the date of this amendment and restatement is prior to the
Distribution Date;
WHEREAS, at a meeting of the Board of Directors of the Company duly
called and held on February 25, 1992, the Board of Directors of the Company
authorized and declared a distribution of one preferred stock purchase right (a
"Right") for each outstanding share of Common Stock, par value $.125 per share,
of the Company (the "Company Common Stock") to stockholders of record on the
close of business on March 11, 1992 (the "Record Date"), and for each share of
Company Common Stock (including shares distributed from treasury) by the Company
thereafter and prior to the Distribution Date;
WHEREAS, each Right entitles the registered holder to purchase upon the
terms and subject to the conditions hereinafter set forth one one-hundredth of a
share of Series A Junior Preferred Stock, par value $1.00 per share;
WHEREAS, the Board of Directors of the Company has directed that the
Company and the Rights Agent amend and restate the Original Rights Agreement
pursuant to this amendment and restatement (hereinafter referred to as this
"Rights Agreement").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person which shall be the
Beneficial Owner of 15% or more of the shares of Company Common Stock then
outstanding, but shall not include an Exempt Person; provided, however, that if
the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person" has become such inadvertently
(including, without limitation, because (i) such Person was unaware that it
beneficially owned a percentage of shares of Company 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 Company Common Stock but was
unaware of the consequences of such Beneficial Ownership under this Rights
Agreement) and without any intention of changing or influencing control of the
Company, and such Person, as promptly as practicable after being advised of such
determination divested or divests himself or itself of Beneficial Ownership of a
sufficient number of shares of Company Common Stock so that such Person would no
longer be an Acquiring Person, then such Person shall not be deemed to be or to
have become an "Acquiring Person" for any purposes of this Rights Agreement. In
making the determination as to whether a Person who would otherwise be an
"Acquiring Person" has become such inadvertently and without any intention of
changing or influencing control of the Company, the Board will be entitled to
resolve all good faith doubts in a manner that is against finding inadvertency
or lack of intention to change or influence control. The Board may take into
account, but shall not be bound by, any declarations that any such Person may
have made on Schedule 13D (or any comparable or successor report) under the
Exchange Act. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Company Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Company Common Stock then outstanding; provided, however, that if a
Person (other than an Exempt Person) shall become the Beneficial Owner of 15% or
more of the Company Common Stock then outstanding by reason of the share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Company Common Stock, then such
Person shall be deemed to be an "Acquiring Person" unless upon the consummation
of the acquisition of such additional shares
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of Common Stock such Person does not own 15% or more of the shares of Common
Stock then outstanding.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Rights Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to "beneficially
own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (I) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (II) securities which such Person
has a right to acquire upon the exercise of Rights at any time prior to
the time a Person becomes an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security by reason of such an agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act (as
such term is hereinafter defined) and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any
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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 to the extent contemplated by the
proviso to Section 1(d)(ii)(B)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then issued and outstanding which such Person would be
deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the states of New York or Texas are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., New
York, New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York, New York time, on the next
succeeding Business Day.
(f) "Common Stock" of any Person other than the Company shall mean the
capital stock (or equivalent equity interest) with the greatest voting power of
such Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.
(g) "Common Stock equivalent" has the meaning set forth in Section
11(a)(iii).
(h) "Company" has the meaning set forth in the preamble hereof.
(i) "Company Common Stock" has the meaning set forth in the Recitals
hereof.
(j) "current market price" has the meaning set forth in Section 11(d).
(k) "Current Value" has the meaning set forth in Section 11(a)(iii).
(l) "Distribution Date" has the meaning set forth in Section 3.
(m) "equivalent preferred stock" has the meaning set forth in Section
11(b).
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(o) "Exchange Ratio" has the meaning set forth in Section 24(a).
(p) "Exempt Person" shall mean the Company or any Subsidiary (as such
term is hereinafter defined) of the Company, any employee benefit plan of the
Company or any
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Subsidiary of the Company, or any entity holding Company Common Stock for or
pursuant to the terms of any such plan.
(q) "Final Expiration Date" has the meaning set forth in Section 7(a).
(r) "Junior Preferred Stock" shall mean the Series A Junior Preferred
Stock, $1.00 par value per share, of the Company having the voting powers,
designation, preferences and relative, participating, optional or other special
rights and qualifications, limitations and restrictions set forth in the form of
Certificate of Designation attached to this Rights Agreement as Exhibit A.
(s) "Nasdaq" shall mean the National Association of Securities Dealers,
Inc. Automated Quotations System.
(t) "NYSE" shall mean the New York Stock Exchange, Inc.
(u) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership, limited partnership, business trust or other
entity or unincorporated association, and shall include any successor (by merger
or otherwise) of such Person.
(v) "Purchase Price" has the meaning set forth in Section 7(b).
(w) "Record Date" has the meaning set forth in the Recitals hereof.
(x) "Redemption Date" has the meaning set forth in Section 23(a).
(y) "Redemption Price" has the meaning set forth in Section 23(a).
(z) "Right" has the meaning set forth in the Recitals.
(aa) "Rights Certificate" has the meaning set forth in Section 3(a).
(bb) "Rights Agent" has the meaning set forth in the Recitals.
(cc) "Section 11(a)(iii) Trigger Date" has the meaning set forth in
Section 11(a)(iii).
(dd) "Security" has the meaning set forth in Section 11(d).
(ee) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such, provided, that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a) hereof, then no Stock Acquisition Date
shall be deemed to have occurred.
(ff) "Subsidiary" of any Person shall mean any corporation or other
Person of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(gg) "Summary of Rights" has the meaning set forth in Section 3(b).
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(hh) "Trading Day" has the meaning set forth in Section 11(d).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall, prior to the Distribution Date, also
be the holders of the Company Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) the tenth Business Day (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than an Exempt Person) of, or of the first public announcement of the
intention of any Person (other than an Exempt Person) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming an
Acquiring Person; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b)) by Common Stock certificates registered in the names
of the holders thereof (which certificates shall also be deemed to be Rights
Certificates) and not by separate Rights Certificates, and (y) the Rights will
be transferable only in connection with the transfer of Company Common Stock. As
soon as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested, at the expense of the
Company, send) by first-class, insured, postage prepaid mail, to each record
holder of Company Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, a
Rights Certificate, in substantially the form of Exhibit B hereto (a "Rights
Certificate"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. As of the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the date hereof, the Company
will send a copy of a Summary of Rights to Purchase Junior Preferred Stock, in
substantially the form of
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Exhibit C hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Company 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. With respect to certificates for Company Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights attached thereto. Until the Distribution Date (or
the earlier of the Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Company Common Stock outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Stock represented thereby.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock which are issued after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date. Certificates for Company Common Stock which become outstanding
(including, without limitation, reacquired Company Common Stock referred to in
the last sentence of this paragraph (c) that are subsequently issued or
distributed by the Company) after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
Rowan Companies, Inc. (the "Company") and Citibank, N.A. (the "Rights
Agent") dated as of January 24, 2002 (the "Rights Agreement"), as
amended, the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal office of the Company.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may expire, or may be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any
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 become null and void."
With respect to certificates representing shares of Company Common
Stock (whether or not such certificates include the foregoing legend or have
appended to them the Summary of Rights, until the earliest of the Distribution
Date, the Redemption Date or the Final Expiration
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Date, the Rights associated with the Company Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the transfer of the
Rights associated with the shares of Company Common Stock represented thereby.
In the event that the Company purchases or acquires any Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the shares of Common Stock
that are no longer outstanding.
Section 4. Form of Rights Certificates. The Rights Certificates (and
the forms of election to purchase Junior Preferred Stock and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any applicable law or with any
applicable rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed or to conform to usage. Subject to the provisions of Sections 11, 13 and
22 hereof, the Rights Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a share of Junior Preferred Stock as shall
be set forth therein at the price per one one-hundredth of a share of Junior
Preferred Stock set forth therein, but the number of such one one-hundredths of
a share of Junior Preferred Stock and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President, or one of its Vice Presidents
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and
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issued and delivered by the Company with the same force and effect as though the
Person who signed such Rights Certificates had not ceased to be such officer of
the Company; and any Rights Certificate may be signed on behalf of the Company
by any Person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate although at the date of the execution of this Rights Agreement any
such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 14 hereof, at any time after
the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration Date, any
Rights Certificate or Rights Certificates (other than Rights Certificates
representing Rights that have become void pursuant to Section 11(a)(ii) hereof
or that have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Rights Certificate or Rights
Certificates entitling the registered holder to purchase a like number of one
one-hundredths of a share of Junior Preferred Stock as the Rights Certificate or
Rights Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged 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 Rights Certificate until the registered holder
shall have completed and executed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon, the Rights Agent shall countersign and
deliver to
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the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of a Rights
Certificate.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the Final
Expiration Date, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, 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 Rights Certificate if mutilated, the Company will make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein), in whole or in
part, at any time after the Distribution Date, upon surrender of the Rights
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each one
one-hundredth of a share of Junior Preferred Stock as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of Business on January
24, 2012 (the "Final Expiration Date") (ii) the Redemption Date or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a share of Junior
Preferred Stock purchasable pursuant to the exercise of a Right shall initially
be $80.00, and shall be subject to adjustment from time to time as provided in
Section 11 or 13 hereof (the "Purchase Price") and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) of this
Section 7.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for
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the shares to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Rights Certificate in accordance with
Section 9 hereof by certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Junior Preferred Stock certificates
for the number of shares of Junior Preferred Stock to be purchased and the
Company hereby irrevocably authorizes any such transfer agent to comply with all
such requests, or (B) requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of Junior Preferred
Stock as are to be purchased (in which case certificates for the Junior
Preferred Stock represented by such receipts shall be deposited by the transfer
agent of the Junior Preferred Stock with such depositary agent) and the Company
hereby directs such depositary agent to comply with such request; (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof; (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder; and (iv) when appropriate, after receipt, deliver such cash to or
upon the order of the registered holder of such Rights Certificate.
(d) Except as otherwise provided herein, in case the registered holder
of any Rights Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Rights Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights 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 or exercise of Rights pursuant to Section 6 or this Section 7
unless such registered holder shall have (i) completed and executed the
certification contained in the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company
shall reasonably request.
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Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or 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 Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Rights Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Rights Certificates, and, in such case, shall deliver a
certificate of destruction thereof to the Company.
Section 9. Availability of Junior Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Junior Preferred Stock or
any Junior Preferred Stock held in its treasury, the number of shares of Junior
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7. The Company covenants and
agrees that it will take all such action as may be necessary to ensure that all
shares of Junior Preferred Stock delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such Junior Preferred Stock (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
(b) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates or
of any Junior Preferred Stock upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for the
Junior Preferred Stock in a name other than that of, the registered holder of
the Rights Certificate evidencing Rights surrendered for exercise or to issue or
to deliver any certificates or depositary receipts for Junior Preferred Stock
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
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Section 10. Junior Preferred Stock Record Date. Each Person in whose
name any certificate for Junior Preferred Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the Junior Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Junior Preferred Stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Junior Preferred Stock transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a holder of Junior
Preferred Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of shares of Junior Preferred Stock or
other securities or property covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Rights Agreement (A) declare a dividend on the Junior
Preferred Stock payable in shares of Junior Preferred Stock, (B)
subdivide the outstanding Junior Preferred Stock, (C) combine the
outstanding Junior Preferred Stock into a smaller number of shares or
(D) issue any shares of its capital stock in a reclassification of the
Junior Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in
this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind
of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time
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when the Junior Preferred Stock transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Sections 23 and 24 of this Rights Agreement,
in the event any Person becomes an Acquiring Person, then (A) the
Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to such Person becoming an Acquiring Person
multiplied by the number of one one-hundredths of a share of Junior
Preferred Stock for which a Right was exercisable immediately prior to
such Person becoming an Acquiring Person, whether or not such Right was
then exercisable, and (B) each holder of a Right, except as otherwise
provided in this Section 11(a)(ii) and Subsection 11(a)(iii) hereof,
shall thereafter have the right to receive, upon exercise at a price
equal to the Purchase Price (as so adjusted), in accordance with the
terms of this Rights Agreement and in lieu of Junior Preferred Stock,
such number of shares of Company Common Stock as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Junior Preferred Stock for
which a Right is then exercisable and dividing that product by (y) 50%
of the then current market price of Company Common Stock (determined
pursuant to Section 11(d) hereof) on the date such Person became an
Acquiring Person; provided, however, that the Purchase Price and the
number of shares of Common Stock so receivable upon exercise of a Right
shall thereafter be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof. In the event that any Person
becomes an Acquiring Person and the Rights shall then be outstanding,
the Company shall not take any action that would eliminate or diminish
the benefits intended to be afforded by the Rights. Notwithstanding
anything in this Rights Agreement to the contrary, however, from and
after the time (the "invalidation time") when any Person first becomes
an Acquiring Person, any Rights that are beneficially owned by (x) any
Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the invalidation
time or (z) a transferee of any
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Acquiring Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the invalidation time pursuant
to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined
is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this paragraph, and subsequent
transferees of such Persons, shall be void without any further action,
and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this
Rights Agreement. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a)(ii) are complied with,
but shall have no liability to any holder of Rights Certificates or
other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder. From and after the invalidation time, no Rights
Certificate shall be issued pursuant to Section 3 or Section 6 hereof
that represents Rights that are or have become void pursuant to the
provisions of this paragraph, and any Rights Certificate delivered to
the Rights Agent that represents Rights that are or have become void
pursuant to the provisions of this paragraph shall be canceled. From
and after the occurrence of an event specified in Section 13(a) hereof,
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) In the event that there shall not be sufficient shares
of Company Common Stock issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) of this Section 11(a), the Company
shall take all such action as may be necessary to authorize additional
shares of Company Common Stock for issuance upon exercise of the
Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional shares of Company Common Stock, the Company shall (A)
determine the excess of (1) the value of the shares of Company Common
Stock issuable upon the exercise of a Right in accordance with the
foregoing subparagraph (ii) (the "Current Value") over (2) the then
current Purchase Price multiplied by the number
-15-
of one one-hundredths shares of Junior Preferred Stock for which a
Right was exercisable immediately prior to the time that the Acquiring
Person became such (such excess being, the "Spread"), and (B) with
respect to each Right (other than Rights which have become void
pursuant to Section 11(a)(ii)), make adequate provision to substitute
for the shares of Common Stock issuable in accordance with the
foregoing subparagraph (ii) upon exercise of the Right and payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Junior Preferred Stock or other equity securities
of the Company (including, without limitation, preferred shares or
fractions of shares of preferred stock which, by virtue of having
dividend, voting and liquidation rights substantially comparable to
those of the shares of Common Stock, are deemed in good faith by the
Board of Directors to have substantially the same value as the shares
of Common Stock (such shares of preferred stock or fractions of shares
of preferred stock are hereinafter referred to as "Common Stock
equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having a value which, when
added to the value of the shares of Common Stock actually issued upon
exercise of such Right, shall have an aggregate value equal to the
Current Value (less the amount of any reduction in the Purchase Price),
where such aggregate value has been determined by the Board of
Directors upon the advice of a nationally recognized investment banking
firm selected in good faith by the Board of Directors; provided,
however, that if the Company shall not make adequate provision to
deliver value pursuant to clause (B) above within 30 days (the "Section
11(a)(iii) Trigger Date") following the date that the Acquiring Person
became such, then the Company shall be obligated to deliver upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Company Common Stock (to the extent
available), and then, if necessary, such number of fractions of shares
of Junior Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Junior Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within 45 calendar days
after such record date) shares of Junior Preferred Stock (or shares having the
same rights, privileges and preferences as shares of Junior Preferred Stock
-16-
("equivalent preferred stock")) or securities convertible into Junior Preferred
Stock or equivalent preferred stock at a price per Preferred share of equivalent
preferred stock (or having a conversion price per share, if a security
convertible into Junior Preferred Stock or equivalent preferred stock) less than
the then current market price of the Junior Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Junior
Preferred Stock outstanding on such record date plus the number of shares of
Junior Preferred Stock which the aggregate offering price of the total number of
shares of Junior Preferred Stock and/or equivalent preferred stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of shares of Junior Preferred Stock
outstanding on such record date plus the number of additional Junior Preferred
Stock and/or equivalent preferred stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid 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 of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and holders
of the Rights. Shares of Junior Preferred Stock owned by or held for the account
of the Company or any Subsidiary shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of the shares of Junior Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Junior Preferred Stock) or subscription rights or warrants (excluding those
referred to
-17-
in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current market price of the Junior Preferred Stock on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and holders
of the Rights) of the portion of the assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to one
share of Junior Preferred Stock and the denominator of which shall be such
current market price of the Junior Preferred Stock on such record date;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the 30
consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the current market price of the
Security is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification then, and in each such case, the current market price
shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall
be the last sale price, regular way, reported at or prior to 4:00 P.M.
New York City time, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, reported
as of 4:00 P.M. New York City time, in either case, as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the
-18-
NYSE or, if the Security is not listed or admitted to trading on the
NYSE, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to
trading or, if the Security is not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high 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 Security is not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national
securities exchange or quotation system on which the Security is listed
or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of the Junior Preferred Stock shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Junior Preferred Stock is not publicly traded, the "current
market price" of the Junior Preferred Stock shall be conclusively
deemed to be the current market price of the Company Common Stock as
determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by 100. If neither Company
Common Stock nor Junior Preferred Stock is publicly held or so listed
or traded, "current market price" shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and holders of
the Rights.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(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
Company Common Stock or Common Stock or other share or one one-millionth of a
share of
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Junior Preferred Stock or one ten thousandth of any other share or security, as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment and (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Junior Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Junior Preferred Stock contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the Junior 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 to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Junior Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
share of Junior Preferred Stock (calculated to the nearest one millionth of a
share of Junior Preferred Stock) obtained by (A) multiplying (x) the number of
one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (B) 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 Junior Preferred Stock that may
be acquired upon the exercise of a Right. Each of the Rights outstanding after
such adjustment in the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Junior Preferred Stock for which
-20-
a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, such record date shall be at least
ten days later than the date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
to be so distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Rights Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Junior Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-hundredths of a share of Junior Preferred Stock that were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of one one-hundredths of a
share of the Junior Preferred Stock or other shares of capital 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 Junior Preferred Stock or
other such shares at such adjusted Purchase Price.
-21-
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Junior Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Junior Preferred
Stock and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares 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 the sole discretion of its Board of Directors, shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Junior Preferred Stock, (ii) issuance wholly for cash of any shares of
Junior Preferred Stock at less than the current market price, (iii) issuance
wholly for cash or shares of Junior Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of Junior Preferred Stock,
(iv) dividends on Junior Preferred Stock payable in Junior Preferred Stock or
(v) issuance of rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Junior Preferred Stock
shall not be taxable to such shareholders.
(n) In the event that, at any time after the date of this Rights
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the outstanding Company Common Stock payable in Company
Common Stock or (ii) effect a subdivision, combination or consolidation of the
outstanding Company Common Stock (by reclassification or otherwise than by
payment of dividends in Company Common Stock) into a greater or lesser number of
shares of Company Common Stock, then, in any such case, the Rights associated
with each share of Company Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each share
of Company Common Stock immediately prior to such event by a fraction, the
numerator of which shall be equal to the total number of shares of Company
Common Stock outstanding immediately prior to the occurrence
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of the event and the denominator of which shall be equal to the total number of
shares of Company Common Stock outstanding immediately following the occurrence
of such event. The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Junior Preferred Stock and
the Company Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 25
hereof; provided, however, that the failure of the Company to make such a
certificate or give such notice shall not affect the validity or the force or
effect of the requirement for such an adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event, directly or indirectly, at any time after a Person
has become an Acquiring Person, (i) the Company shall consolidate with, or merge
with and into, any other Person, (ii) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Company Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or the Company) or
cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person (other than the Company or one or more of its wholly
owned Subsidiaries), then, and in each such case, proper provision shall be made
so that (A) each holder of a Right (other than Rights that have become void
pursuant to Section 11(a)(ii)) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a share of Junior Preferred
-23-
Stock for which a Right is then exercisable, in accordance with the terms of
this Rights Agreement and in lieu of Junior Preferred Stock, such number of
validly issued, fully paid and non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as defined herein), not subject to any
liens, encumbrances, rights of call or first refusal, transfer restrictions or
other adverse claims, as shall equal the result obtained by (I) multiplying the
then current Purchase Price by the number of one one-hundredths of a share of
Junior Preferred Stock for which a Right is then exercisable and dividing that
product by (II) 50% of the then current market price of the Common Stock of such
Principal Party (determined in accordance with Section 11(d)(i) hereof) on the
date of consummation of such consolidation, merger, sale or transfer; provided
that the Purchase Price and the number of shares of Common Stock of such
Principal Party issuable upon exercise of each Right shall be further adjusted
as provided in Section 11(f) hereof to reflect any events occurring in respect
of such Principal Party after the date of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Rights Agreement; (C) the
term "Company" shall thereafter be deemed to refer to such Principal Party; and
(D) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9 hereof) in connection with such consummation of any
such transaction as may be necessary to assure that the provisions of this
Rights Agreement shall thereafter be applicable, as nearly as reasonably may be,
in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless, prior thereto, the Company and such issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
so providing. The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
-24-
(b) As used in this Section 13, "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of the securities into which the shares of Company Common
Stock are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer of the shares of Common Stock
which have the greatest aggregate market value of shares outstanding,
or (B) if no securities are so issued, (x) the Person that is the other
party to the merger, if such Person survives said merger, or, if there
is more than one such Person, the Person the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding or
(y) if the Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from the
consolidation; and
(ii) in the case of any transaction described in clause (iii)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons is the issuer of Common
Stock having the greatest aggregate market value of shares outstanding;
provided, however, that in any such case described in the foregoing
clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at
such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, then (1) if
such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than one
Person, and the Common Stock of all of such Persons have been so
registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Stock having the greatest aggregate
market value of shares outstanding, or (3) if such Person is owned,
directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in clauses (1) and (2) above shall apply to each of
the owners having an interest in the venture as if the Person owned by
the joint venture was a
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Subsidiary of both or all of such joint venturers, and the Principal
Party in each such case shall bear the obligations set forth in this
Section 13 in the same ratio as its interest in such Person bears to
the total of such interests.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NYSE or, if the Rights are
not listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Junior Preferred Stock (other than fractions which are integral multiples of one
one-hundredths of a share of Junior Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of Junior
Preferred Stock (other than fractions which are integral multiples of one
one-hundredths of a share of Junior Preferred Stock). Fractions of shares of
Junior Preferred Stock in integral multiples of one one-hundredths of a share of
Junior Preferred Stock may, at the
-26-
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Junior Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Junior Preferred Stock that
are not integral multiples of one one-hundredths of a share of Junior Preferred
Stock, the Company shall pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one share of Junior Preferred
Stock. For the purposes of this Section 14(b), the current market value of a
share of Junior Preferred Stock shall be the closing price of a whole share of
Junior Preferred Stock (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The Company shall not be required to issue fractions of shares of
Company Common Stock or to distribute certificates which evidence fractional
shares of Company Common Stock upon the exercise or exchange of Rights. In lieu
of such fractional shares of Company Common Stock, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional shares of Company Common Stock would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of a whole share
of Company Common Stock (as determined in accordance with Section 14(a) hereof)
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 provided above).
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, other than rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
shares of Company Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of shares of Company Common
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of shares of Company
Common Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against
-27-
the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Rights 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 Rights Agreement and will be entitled to specific
performance of the obligations hereunder, and injunctive relief against actual
or threatened violations of the obligations of any Person subject to, this
Rights 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 Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or agency of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Rights Certificate (or, prior to the Distribution Date, the
associated Company Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Company Common
Stock certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Junior Preferred Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, except as provided in Section 25
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hereof, to receive notice of meetings or other actions affecting stockholders,
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate have been exercised in accordance
with the provisions thereof.
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, including reasonable
fees and disbursements of its counsel, incurred in connection with the execution
and administration of this Rights Agreement and the exercise and performance of
its duties hereunder. The Company shall indemnify the Rights Agent for, and hold
it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Rights Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly, or prosecuting any action to determine the rights or obligations of
the parties hereunder.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Rights Agreement in reliance upon any Rights
Certificate or certificate for Junior Preferred Stock or Company 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 have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services businesses of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Rights Agreement without the execution or filing of any document or any further
act on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for
-29-
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Rights Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Rights
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
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 or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any
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Assistant Secretary of the Company and delivered to the Rights Agent; provided,
however, that so long as any Person is an Acquiring Person hereunder, such
certificate shall be approved by the Board of Directors.
(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 Rights Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the validity
of this Rights Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or for the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Rights Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt by the Rights
Agent of the certificate describing any such adjustment contemplated by Section
12); nor shall it be responsible for any determination by the Board of Directors
of Current Value or Spread pursuant to the provisions of Section 11(a)(iii) or
the current market price of the Junior Preferred Stock, Company Common Stock or
any other security pursuant to the provisions of Section 11(d); 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 Junior Preferred Stock or any
other securities to be issued pursuant to this Rights Agreement or any Rights
Certificate or as to whether any shares of Junior Preferred Stock or any other
securities will, when so issued, be validly authorized and issued, fully paid
and non-assessable; nor shall it be liable for any federal or state transfer
taxes or charges that may be due upon the issuance or transfer of any shares of
Junior Preferred Stock, Company Common Stock or other securities or any Rights
Certificate.
(f) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and
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assurances as may reasonably be required by the Rights Agent for the performance
by the Rights Agent of its duties under this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, 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 or suffered to be taken
by it in good faith in accordance with instructions of any such officer;
provided, however, that so long as any Person is an Acquiring Person hereunder,
the Rights Agent shall accept such instructions and advice only from the Board
of Directors and shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with such instructions of the Board of
Directors. Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Rights Agreement
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any such officer
of the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Rights Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.
-32-
(j) No provision of this Rights 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 or in the exercise of its rights
hereunder if the Rights Agent shall have reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certification contained the form of
assignment or form of election to purchase, as the case may be, has not been
signed, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company. If
such certificate has been signed, unless previously instructed otherwise in
writing by the Company (which instructions may impose on the Rights Agent
addition ministerial responsibilities, but no discretionary responsibilities),
the Rights Agent may assume without further inquiry that the Rights Certificate
is not owned by a person described in such certification and shall not be
charged with any knowledge to the contrary.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' prior notice in writing mailed to the Company, and to
each transfer agent of the Junior Preferred Stock and the Company Common Stock,
by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' prior notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the
Junior Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 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 Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the
-33-
laws of the United States or the States of Texas or New York in good standing,
shall be authorized to do business as a banking institution in the State of New
York, shall be authorized under such laws to exercise corporate trust or stock
transfer powers, shall be subject to supervision or examination by federal or
state authorities and shall have 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 (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 Junior Preferred Stock and the Company Common Stock, and
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Rights Agreement or the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property that may be acquired under the Rights Certificates
made in accordance with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of Common Stock following the Distribution
Date and prior to the earlier of the Redemption Date or the Final Expiration
Date, the Company may with respect to shares of Company Common Stock so issued
or sold pursuant to (i) the exercise of stock options, (ii) under any employee
plan or arrangement, (iii) upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company or (iv) a contractual
obligation of the Company in each case existing prior to the Distribution Date,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale.
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Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person, redeem all
but not less than all of the then outstanding Rights at a redemption price of
$0.01 per Right, 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 by the Board of Directors of the Company may be made effective at
such time and on such date (the "Redemption Date"), on such basis and with such
conditions as the Board of Directors of the Company, in its sole discretion may
establish. The Company may, at its option, pay the Redemption Price in cash,
shares of Company Common Stock (based on the current market price of the Company
Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23 (or at such later time as the Board of Directors 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 the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such redemption;
provided, however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Within ten days after such
action of the Board of Directors of the Company ordering the redemption of the
Rights, the Company shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the registry
books of the transfer agent for Company Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Company Common Stock prior to the Distribution Date.
-35-
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person first becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
shares of Company Common Stock at an exchange ratio of one share of Company
Common Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Company Common Stock then outstanding.
From and after the occurrence of an event specified in Section 13(a) hereof, 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 of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Company Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
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 Company 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
-36-
become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In the event that there shall not be sufficient shares of Company
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Company Common Stock for issuance upon exchange of the Rights. In the
event the Company shall, after good faith effort, be unable to take all such
action as may be necessary to authorize such additional Company Common Stock,
the Company shall substitute, for each share of Company Common Stock that would
otherwise be issuable upon exchange of a Right, a number of shares of Junior
Preferred Stock or fraction thereof such that the current market price of one
share of Junior Preferred Stock multiplied by such number or fraction is equal
to the current market price of one share of Company Common Stock as of the date
of issuance of such Junior Preferred Stock or fraction thereof.
(d) The Company shall not be required to issue fractions of a share of
Company Common Stock or to distribute certificates which evidence fractional
shares of Company Common Stock. In lieu of such fractional shares of Company
Common Stock, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional shares of Company Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Company Common Stock. For the purposes
of this Section 24(d), the current market value of a whole share of Company
Common Stock shall be the closing price of a share of Company Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i) or the last
sentence of Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall at any time after the earlier of the
Distribution Date and the Stock Acquisition Date propose (i) to pay any dividend
payable in shares of any class to the holders of Junior Preferred Stock or to
make any other distribution to the holders of Junior Preferred Stock (other than
a regular quarterly cash dividend), (ii) to offer to the holders of Junior
Preferred Stock rights or warrants to subscribe for or to purchase any
additional Junior Preferred Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Junior Preferred Stock (other than a reclassification involving
-37-
only the subdivision or combination of outstanding Junior Preferred Stock), (iv)
to effect any consolidation or merger with or into, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Company Common Stock
payable in Company Common Stock or to effect a subdivision, combination or
consolidation of the Company Common Stock (by reclassification or otherwise than
by payment of dividends in Company Common Stock), then, in each such case, the
Company shall give to each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such share dividend, or distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Company Common Stock and/or
Junior 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 (i) or (ii) above at
least ten days prior to the record date for determining holders of the Junior
Preferred Stock for purposes of such action, and in the case of any such other
action, at least ten days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Company Common
Stock and/or Junior Preferred Stock, whichever shall be the earlier.
(b) In case the events set forth in Section 11(a)(ii) or Section 13
hereof shall occur, then the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate (or if occurring prior to the
Distribution Date, the holders of the Company Common Stock), in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) or Section 13 hereof, as the case may be.
Section 26. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
registered or certified mail and deemed given upon receipt, addressed (until
another address is filed in writing with the Rights Agent) as follows:
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Rowan Companies, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Secretary.
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be sent by
registered or certified mail and shall be deemed given upon receipt, and
addressed (until another address is filed in writing with the Company) as
follows:
Citibank, N.A.
000 Xxxx Xxxxxx
5th Floor, Equity Administration
Xxx Xxxx, Xxx Xxxx 00000
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. Except as otherwise provided in
this Section 27, for so long as the Rights are then redeemable, the Company may
in its sole and absolute discretion, and the Rights Agent shall if the Company
so directs, supplement or amend any provision of this Rights Agreement in any
respect without the approval of the Rights Agent or any holders of the Rights.
At any time when the Rights are no longer redeemable, except as otherwise
provided in this Section 27, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend this Rights Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable; provided that no such supplement or amendment shall 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), and no such amendment may
cause the Rights again to become redeemable or cause the Rights Agreement again
to become amendable other than in accordance with this
-39-
sentence. 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 27, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything in this Rights Agreement to
the contrary, no supplement or amendment that changes the rights and duties of
the Rights Agent under this Rights Agreement will be effective against the
Rights Agent without the execution of such supplement or amendment by the Rights
Agent.
Section 28. Successors. All the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determination and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Rights Agreement and to exercise the rights and powers
specifically granted to the Board of Directors of the Company or to the Company,
or as may be necessary or advisable in the administration of this Rights
Agreement, including, without limitation, the right and power (i) to interpret
the provisions of this Rights Agreement and (ii) to make all determinations
deemed necessary or advisable for the administration of this Rights Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Rights Agreement prior to any Person becoming an
Acquiring Person). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board of Directors of the
Company in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights, as such, and all other
parties, and (y) not subject the Board of Directors to any liability to the
holders of the Rights.
Section 30. Benefits of this Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the Company Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Company Common Stock).
-40-
Section 31. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 32. Governing Law. This Rights Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of
Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-41-
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and attested, all as of the day and year first
above written.
Attest: Rowan Companies, Inc.
By: /s/ Xxxx X. Xxx By: /s/ X. X. Xxxxxx
------------------------ ----------------------------
Name: Xxxx X. Xxx Name: X. X. Xxxxxx
Title: Corporate Secretary Title: Senior Vice President
Attest: Citibank, N.A.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxx Xxxxxx
------------------------ ----------------------------
Name: Xxxxxxx Xxxxx Name: Xxxx Xxxxxx
Title: Vice President Title: Vice President
-42-
EXHIBIT A
CERTIFICATE OF DESIGNATION
OF SERIES A JUNIOR PREFERRED STOCK
of
ROWAN COMPANIES, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of
Delaware
We, X. X. Xxxxxx, President of Rowan Companies, Inc., a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), and Xxxx X. Xxx, Secretary of the Corporation, in
accordance with the provisions of Section 151 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation (the "Certificate") of the Corporation, the
Board of Directors on February 25, 1992 duly adopted the following resolution
creating a series of 1,500,000 shares of Junior Preferred Stock designated as
Series A Junior Preferred Stock:
RESOLVED that, pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate, a series of Junior Preferred Stock of this Corporation be and it is
hereby created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional or other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof, are as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Preferred Stock" ("Series A Junior Preferred
Stock") and the number of shares constituting such series shall be 1,500,000.
Such number of shares may be adjusted by appropriate action of the Board of
Directors.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS. (A) Subject to the prior and
superior rights of the holders of any shares of any other series of Junior
Preferred Stock or any other shares of preferred stock of the Corporation
ranking prior and superior to the shares of Series A Junior Preferred Stock with
respect to dividends, each holder of one one-hundredth (1/100th) of a share (a
"Unit") of Series A Junior Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
that purpose, (i) quarterly dividends payable in cash on the first day of
January, April, July and October in each year (each such date
Exhibit A-1
being a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of such Unit of Series A Junior
Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to
the greater of (a) $0.01 or (b) subject to the provision for adjustment
hereinafter set forth, the aggregate per share amount of all cash dividends
declared on shares of the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of a Unit of Series A Junior Preferred Stock, and
(ii) subject to the provision for adjustment hereinafter set forth, quarterly
distributions (payable in kind) on each Quarterly Dividend Payment Rate in an
amount per Unit equal to the aggregate per share amount of all non-cash
dividends or other distributions (other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock, by
reclassification or otherwise) declared on shares of Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or with respect to the
first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Junior Preferred Stock. In the event that the Corporation shall at any
time after February 25, 1992 (the "Rights Declaration Date") (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, then in each
such case the amount to which the holder of a Unit of Series A Junior Preferred
Stock was entitled immediately prior to such event pursuant to the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on Units
of Series A Junior Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the shares of Common
Stock (other than a dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$0.01 per Unit on the Series A Junior Preferred Stock shall nevertheless accrue
on such subsequent Quarterly Dividend Payment Date.
Exhibit A-2
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding Unit of Series A Junior Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such Unit of Series A Junior
Preferred Stock, unless the date of issuance of such Unit is prior to the record
date for the first Quarterly Dividend Payment Date, in which case, dividends on
such Unit shall begin to accrue from the date of issuance of such Unit, or
unless the date of issuance is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of Units of Series A
Junior Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on Units of
Series A Junior Preferred Stock in an amount less than the aggregate amount of
all such dividends at the time accrued and payable on such Units shall be
allocated pro rata on a unit-by-unit basis among all Units of Series A Junior
Preferred Stock at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of Units of Series A Junior Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of Units of Series A Junior
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
Unit of Series A Junior Preferred Stock shall entitle the holder thereof to one
vote on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common Stock or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
then in each such case the number of votes per Unit to which holders of Units of
Series A Junior Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding immediately
after such event and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.
Exhibit A-3
(B) Except as otherwise provided herein or by law, the holders of Units
of Series A Junior Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at anytime dividends on any Units of Series A Junior
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, then during the period (a "default period") from the
occurrence of such event until such time as all accrued and unpaid dividends for
all previous quarterly dividend periods and for the current quarterly dividend
period on all Units of Series A Junior Preferred Stock then outstanding shall
have been declared and paid or set apart for payment, all holders of Units of
Series A Junior Preferred Stock, voting separately as a class, shall have the
right to elect two Directors.
(ii) During any default period, such voting rights of the holders of
Units of Series A Junior Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting rights nor any right of the
holders of Units of Series A Junior Preferred Stock to increase, in certain
cases, the authorized number of Directors may be exercised at any meeting unless
a majority of the outstanding Units of Series A Junior Preferred Stock shall be
present at such meeting in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the holders of Units of
Series A Junior Preferred Stock of such rights. At any meeting at which the
holders of Units of Series A Junior Preferred Stock shall exercise such voting
right initially during an existing default period, they shall have the right,
voting separately as a class, to elect Directors to fill up to two vacancies in
the Board of Directors, if any such vacancies may then exist, 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 Series A Junior 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 Units of Series A
Junior Preferred Stock shall have exercised their right to elect Directors
during any default period, the number of Directors shall not be increased or
decreased except as approved by a vote of the holders of Units of Series A
Junior Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to the Series A Junior Preferred Stock.
Exhibit A-4
(iii) Unless the holders of Series A Junior 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
Units of Series A Junior Preferred Stock outstanding may request in writing, the
calling of a special meeting of the holders of Units of Series A Junior
Preferred Stock, which meeting shall thereupon be called by the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Units of Series A Junior Preferred Stock are entitled to vote pursuant to
this paragraph (C)(iii) shall be given to each holder of record of Units of
Series A Junior 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 ten days and not later than 50 days
after such order or request or in default of the calling of such meeting within
50 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 outstanding Units of Series A Junior Preferred Stock.
(iv) During any default period, the holders of shares of Common Stock
and Units of Series A Junior Preferred Stock, and other classes or series of
stock the Corporation, if applicable, shall continue to be entitled to elect all
the Directors until the holders of Units of Series A Junior Preferred Stock
shall have exercised their right to elect two Directors voting as a separate
class, after the exercise of which right (x) the Directors so elected by the
holders of Units of Series A Junior 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 (C)(ii) of this Section 3) be filled by
vote of a majority of the remaining Directors theretofore elected by the holders
of the class of capital stock which elected the Director whose office shall have
become vacant. References in this paragraph (C) to Directors elected by the
holders of a particular class of capital 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 Units of Series A Junior Preferred Stock as a separate class
to elect Directors shall cease, (y) the term of any Directors elected by the
holders of Units of Series A Junior Preferred Stock as a separate class shall
terminate, and (z) the number of Directors shall be such number as may be
Exhibit A-5
provided for in the Certificate or by-laws irrespective of any increase made
pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided by law or in
the Certificate or by-laws). 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.
(vi) The provisions of this paragraph (C) shall govern the election of
Directors by holders of Units of Series A Junior Preferred Stock during any
default period notwithstanding any provisions of the Certificate to the
contrary.
(D) Except as set forth herein, holders of Units of Series A Junior
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
shares of Common Stock as set forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS. (A) Whenever quarterly dividends or
other dividends or distributions payable on Units of Series A Junior 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
Units of Series A Junior Preferred Stock shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on or
redeem or purchase or otherwise acquire for consideration any shares of junior
stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of parity stock, except dividends paid ratably on Units of Series A
Junior Preferred Stock and shares of all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the
holders of such Units and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any parity stock, provided, however, that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any junior stock;
(iv) purchase or otherwise acquire for consideration any Units of
Series A Junior Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors) to all
holders of such Units.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation
Exhibit A-6
could, under paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any Units of Series A Junior Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled automatically upon the acquisition
thereof. All such Units shall, upon their cancellation, become authorized but
unissued Units of Junior Preferred Stock and may be reissued as part of a new
series of Junior Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series A Junior Preferred Stock
shall have received, subject to adjustment as hereinafter provided in paragraph
(B), the greater of either (a) $.01 per Unit plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not earned or declared,
to the date of such payment, or (b) the amount per Unit equal to the aggregate
per share amount to be distributed to holders of shares of Common Stock, or (ii)
to the holders of shares of parity stock, unless simultaneously therewith
distributions are made ratably on Units of Series A Junior Preferred Stock and
all other shares of such parity stock in proportion to the total amounts which
the holders of Units of Series A Junior Preferred Stock are entitled under
clause (i)(a) of this sentence and to which the holders of shares of such parity
stock are entitled, in each case upon such liquidation, dissolution or winding
up.
(B) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into smaller number
of shares, then in each such case the aggregate amount to which holders of Units
of Series A Junior Preferred Stock were entitled immediately prior to such event
pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted
by multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
Exhibit A-7
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series A Junior Preferred Stock shall at the same time be similarly exchanged
for or converted into an amount per Unit (subject to the provision for
adjustment hereinafter set forth) equal to the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding Common Stock into a smaller number of
shares, then in each such case the amount set forth in the immediately preceding
sentence with respect to the exchange or conversion of Units of Series A Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
SECTION 8. REDEMPTION. The Units of Series A Junior Preferred Stock
shall not be redeemable.
SECTION 9. RANKING. The Units of Series A Junior Preferred Stock shall
rank junior to all other series of the Junior Preferred Stock and to any other
class of preferred stock as to the payment of dividends and the distribution of
assets, unless the Certificate or terms of any such series or class shall
provide otherwise.
SECTION 10. AMENDMENT. The Certificate, including, without limitation,
this resolution, shall not hereafter be amended, either directly or indirectly,
or through merger or consolidation with another corporation, in any manner that
would alter or change the powers, preferences or special rights of the Series A
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of a majority or more of the outstanding Units of Series A
Junior Preferred Stock, voting separately as a class.
SECTION 11. FRACTIONAL SHARES. The Series A Junior Preferred Stock
maybe issued in Units or other fractions of a share, which Units or fractions
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
Exhibit A-8
distributions and to have the benefit of all other rights of holders of Series A
Junior Preferred Stock.
SECTION 12. CERTAIN DEFINITIONS. As used herein with respect to the
Series A Junior Preferred Stock, the following terms shall have the following
meanings:
(A) The term "Common Stock" shall mean the class of stock designated as
the common stock, par value $.125 per share, of the Corporation at the date
hereof or any other class of stock resulting from successive changes or
reclassification of common stock.
(B) The term "junior stock" (i) as used in Section 4, shall mean the
Common Stock and any other class or series of capital stock of the Corporation
hereafter authorized or issued over which the Series A Junior Preferred Stock
has preference or priority as to the payment of dividends and (ii) as used in
Section 6, shall mean the Common Stock and any other class or series of capital
stock of the Corporation over which the Series A Junior Preferred Stock has
preference or priority in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
(C) The term "parity stock" (i) as used in Section 4, shall mean any
class or series of stock of the Corporation hereafter authorized or issued
ranking pari passu with the Series A Junior Preferred Stock as to dividends and
(ii) as used in Section 6, shall mean any class or series of capital stock
ranking pari passu with the Series A Junior Preferred Stock in the distribution
of assets on any liquidation, dissolution or winding up.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate of
Designation and do affirm the foregoing as true under the penalties of perjury
this 2nd day of March, 1992.
/s/ X. X. XXXXXX
----------------------------------------
President
/s/ XXXX XXX
----------------------------------------
Secretary
Exhibit A-9
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER JANUARY 24, 2012 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE AGREEMENT.
Rights Certificate
ROWAN COMPANIES, INC.
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of January 24, 2002 (the "Rights Agreement"), between Rowan
Companies, Inc., a
Delaware corporation (the "Company"), and Citibank, N.A. (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
New York, New York time, on January 24, 2012 at the designated office of the
Rights Agent, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Series A Junior Preferred
Stock, par value $1.00 per share, of the Company (the "Junior Preferred Stock"),
at a purchase price of $80.00 per one one-hundredth of a Preferred (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-hundredths of a
share of Junior Preferred Stock which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number and Purchase
Price as of January ___, 2002, based on the Junior Preferred Stock as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a share of Junior Preferred Stock
which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the designated office of the Rights Agent, may be exchanged
for another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Junior Preferred Stock as the Rights evidenced by the Rights Certificate or
Exhibit B-1
Rights Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged in whole or in part for Junior
Preferred Stock or shares of the Company's Common Stock, without par value.
No fractional Junior Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredths of a share of Junior 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.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Junior
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a 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 subscription rights,
or otherwise, until exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of the _____ day of ___________, 20__.
ATTEST: ROWAN COMPANIES, INC.
------------------------------- ----------------------------------------
Name: Name:
Title: Title:
COUNTERSIGNED:
Citibank, N.A.
By:
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Name:
Title:
Exhibit B-2
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and transfers unto
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer the
within Rights Certificate on the books of the within-named Company, with full
power of substitution.
Dated:
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Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
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Signature
Exhibit B-3
Form of Reverse Side of Rights Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
TO: ROWAN COMPANIES, INC.
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Rights Certificate to purchase the Junior Preferred Stock
issuable upon the exercise of such Rights and requests that certificates for
such Junior Preferred Stock be issued in the name of:
Please insert social security
or other identifying number
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(Please print name and address)
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If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining 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)
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Dated:
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Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
Exhibit B-4
The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
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Signature
Exhibit B-5
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
Exhibit B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
INTRODUCTION
On February 25, 1992 the Board of Directors of Rowan Companies, Inc.
(the "Company") declared a dividend of one preferred share purchase right (an
"Original Right") for each outstanding share of common stock, par value $.125
per share, of the Company. The dividend was paid to the stockholders of record
as of the close of business on March 11, 1992. On January 24, 2002 the Board of
Directors amended the Original Rights in their entirety to represent a right (a
"Right") to purchase one one-hundredth of a share of Series A Junior Preferred
Stock, $1.00 par value ("Preferred Stock"), of the Company at a price of $80.00
(as the same may be adjusted, the "Purchase Price"). The description and terms
of the Rights are set forth in an Amended and Restated Rights Agreement (as the
same may be amended from time to time, the "Rights Agreement") dated as of
January 24, 2002, between the Company and Citibank, N.A., as Rights Agent (the
"Rights Agent").
Our Board has adopted the Rights Agreement providing for these rights
in order to protect stockholders from coercive or otherwise unfair takeover
tactics. In general terms, it works by imposing a significant penalty upon any
person or group which acquires 15% or more of our outstanding common stock
without the approval of our Board. The Rights Agreement should not interfere
with any merger or other business combination approved by our Board.
For those interested in the specific terms of the Rights Agreement we
provide the following summary description. Please note, however, that this
description is only a summary, and is not complete, and should be read together
with the entire Rights Agreement, which has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A/A
dated February 12, 2002. A copy of the agreement is available free of charge
from our Company.
THE RIGHTS. The Rights trade with, and are inseparable from, the common
stock. The Rights are evidenced only by certificates that represent shares of
common stock. New Rights will accompany any new shares of common stock we issue
until the Distribution Date described below.
Exhibit C-1
EXERCISE PRICE. Each Right will allow its holder to purchase from our
Company one one-hundredth of a share of Preferred Stock for $80.00, once the
Rights become exercisable. This portion of the share of Preferred Stock will
give the stockholder approximately the same dividend, voting, and liquidation
rights as would one share of common stock. Prior to exercise, the Right does not
give its holder any dividend, voting, or liquidation rights.
EXERCISABILITY. The Rights will not be exercisable until
o ten days after the public announcement that a person or group has become an
"Acquiring Person" by obtaining beneficial ownership of 15% or more of our
outstanding common stock, or, if earlier,
o 10 business days (or a later date determined by our Board before any person
or group becomes an Acquiring Person) after a person or group begins a
tender or exchange offer which, if completed, would result in that person
or group becoming an Acquiring Person.
We refer to the date when the Rights become exercisable as the
"Distribution Date." Until that date, the common stock certificates will also
evidence the Rights, and any transfer of shares of common stock will constitute
a transfer of Rights. After that date, the Rights will separate from the common
stock and be evidenced by book-entry credits or by Rights certificates that we
will mail to all eligible holders of common stock. Any Rights held by an
Acquiring Person are void and may not be exercised.
CONSEQUENCES OF A PERSON OR GROUP BECOMING AN ACQUIRING PERSON
o FLIP IN. If a person or group becomes an Acquiring Person, all holders of
Rights except the Acquiring Person may, for $80.00, purchase shares of our
common stock with a market value of $160.00, based on the market price of
the common stock prior to such acquisition.
o FLIP OVER. If our Company is later acquired in a merger or similar
transaction after the Rights Distribution Date, all holders of Rights
except the Acquiring Person may, for $80.00, purchase shares of the
acquiring corporation with a market value of $160.00 based on the market
price of the acquiring corporation's stock, prior to such merger.
PREFERRED SHARE PROVISIONS
Each one one-hundredth of a share of Preferred Stock, if issued:
o will not be redeemable.
o will entitle holders to quarterly dividend payments of $.01 per fractional
share, or an amount equal to the dividend paid on one share of common
stock, whichever is greater.
Exhibit C-2
o will entitle holders upon liquidation either to receive $.01 per fractional
share or an amount equal to the payment made on one share of common stock,
whichever is greater.
o will have the same voting power as one share of common stock.
o if shares of our common stock are exchanged via merger, consolidation, or a
similar transaction, will entitle holders to a per share payment equal to
the payment made on one share of common stock.
The value of one one-hundredth interest in a share of Preferred Stock should
approximate the value of one share of common stock.
EXPIRATION. The Rights will expire on January 24, 2012.
REDEMPTION. Our Board may redeem the Rights for $.01 per Right at any
time before any person or group becomes an Acquiring Person. If our Board
redeems any Rights, it must redeem all of the Rights. Once the Rights are
redeemed, the only right of the holders of Rights will be to receive the
redemption price of $.01 per Right. The redemption price will be adjusted if we
have a stock split or stock dividends of our common stock.
EXCHANGE. After a person or group becomes an Acquiring Person, but
before an Acquiring Person owns 50% or more of our outstanding common stock, our
Board may extinguish the Rights by exchanging one share of common stock or an
equivalent security for each Right, other than Rights held by the Acquiring
Person.
ANTI DILUTION PROVISIONS. Our Board may adjust the purchase price of
the Preferred Stock, the number of shares of Preferred Stock issuable and the
number of outstanding Rights to prevent dilution that may occur from a stock
dividend, a stock split, a reclassification of the Preferred Stock or common
stock. No adjustments to the Exercise Price of less than 1% will be made.
AMENDMENTS. The terms of the Rights Agreement may be amended by our
Board without the consent of the holders of the Rights. After a person or group
becomes an Acquiring Person, our Board may not amend the agreement in a way that
adversely affects holders of the Rights.
Exhibit C-3
