Exhibit 1
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CARBO CERAMICS INC.
AND
MELLON INVESTOR SERVICES LLC,
Rights Agent
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Rights Agreement
Dated as of February 13, 2002
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TABLE OF CONTENTS
Section Page
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1. Certain Definitions.....................................................1
2. Appointment of Rights Agent.............................................5
3. Issue of Right Certificate..............................................5
4. Form of Right Certificates..............................................7
5. Countersignature and Registration.......................................7
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates................................................8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights...........8
8. Cancellation and Destruction of Right Certificates.....................10
9. Reservation and Availability of Capital Stock..........................10
10. Preferred Share Record Date............................................11
11. Adjustment of Purchase Price; Number of Shares or Number of Rights.....12
12. Certification of Adjusted Purchase Price or Number of Shares...........19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...20
14. Fractional Rights and Fractional Shares................................23
15. Rights of Action.......................................................24
16. Agreement of Right Holders.............................................24
17. Right Certificate Holder Not Deemed a Stockholder......................25
18. Concerning the Rights Agent............................................25
19. Merger or Consolidation or Change of Name of Rights Agent..............26
20. Duties of Rights Agent.................................................26
21. Change of Rights Agent.................................................29
22. Issuance of New Right Certificates.....................................29
23. Redemption.............................................................30
24. Exchange...............................................................31
25. Notice of Certain Events...............................................31
26. Notices................................................................32
27. Supplements and Amendments.............................................33
28. Successors.............................................................34
29. Benefits of this Agreement.............................................34
30. Severability...........................................................34
31. Determinations and Actions by the Board of Directors, etc..............34
32. Governing Law..........................................................35
33. Counterparts...........................................................35
34. Descriptive Headings...................................................35
Exhibit A.........Form of Certificate of Designations
Exhibit B.........Form of Right Certificate
Exhibit C.........Summary of Rights
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement" or "Rights Agreement"), dated
as of February 13, 2002, between Carbo Ceramics Inc., a Delaware corporation
(the "Company"), and Mellon Investor Services LLC, a New Jersey limited
liability company, as rights agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on February 13, 2002 (the "Declaration Date"), the Board of
Directors of the Company authorized and declared a dividend of one right (a
"Right") for each outstanding share of Common Stock (as hereinafter defined) of
the Company outstanding at the Close of Business on February 25, 2002 (the
"Record Date"), and authorized the issuance of one Right with respect to each
share of Common Stock that shall become outstanding between the Record Date and
the earlier of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined), each Right initially representing the right to purchase
one ten-thousandth (1/10,000) of a Preferred Share (as hereinafter defined) upon
the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person (as hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall, subsequent to the
Declaration Date, become the Beneficial Owner (as hereinafter defined) of 15% or
more of the shares of Common Stock then outstanding (other than as a result of
an Approved Offer (as hereinafter defined)), or (ii) any Person who or which,
together with all Affiliates and Associates of such Person, was on the
Declaration Date the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, if, subsequent to the Declaration Date, such Person,
together with all Affiliates and Associates of such Person, shall increase its
Beneficial Ownership of shares of Common Stock by an additional 1% or more of
the shares of Common Stock then outstanding; provided, however, that (w)
"Acquiring Person" shall not include any Person, together with its Affiliates
and Associates, who becomes the Beneficial Owner of 15% or more (in the case of
clause (i) above) or an additional 1% or more (in the case of clause (ii) above)
of the shares of Common Stock then outstanding solely as a result of a reduction
in the number of shares of Common Stock outstanding due to the repurchase of
shares of Common Stock by the Company, unless and until such time as such Person
shall purchase or otherwise become (as a result of actions taken by such Person
or its Affiliates or Associates) the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of Common
Stock; (x) "Acquiring Person" shall not include any Person, together with its
Affiliates and Associates, who becomes the Beneficial Owner of 15% or more (in
the case of clause (i) above) or an additional 1% or more (in the case of clause
(ii) above) of the outstanding shares of Common Stock but who acquired
beneficial ownership of shares of Common Stock inadvertently (including, without
limitation, because (i) such Person was unaware that it Beneficially Owned 15%
or more of the Common Stock or (ii) such Person was aware of the extent of such
Beneficial Ownership but such Person acquired Beneficial Ownership of such
shares of Common Stock without any plan or intention to change or influence the
control of the Company), and such Person promptly (and in any event within ten
Business Days after being so requested by the Company) enters into an
irrevocable commitment satisfactory to the Company's Board of Directors promptly
(and in any event within twenty Business Days or such shorter period as shall be
determined by the Company's Board of Directors) to divest, and thereafter
promptly divests as required by such commitment, sufficient shares of Common
Stock so that such Person (together with all of its Affiliates and Associates)
ceases to be a Beneficial Owner of 15% or more of shares of Common Stock; (y)
"Acquiring Person" shall not include the Company, any wholly owned Subsidiary
(as hereinafter defined) of the Company, any employee benefit plan of the
Company or of any of its wholly owned Subsidiaries, or any entity holding Common
Stock which was organized, appointed or established by the Company or any of its
wholly owned Subsidiaries for or pursuant to the terms of any such plan; and (z)
"Acquiring Person" shall not include Xxxxxxx X. Xxxxxx or any Affiliate or
Associate of Xxxxxxx X. Xxxxxx, or any Person who becomes the Beneficial Owner
of 15% or more of the outstanding shares of Common Stock upon the death of
Xxxxxxx X. Xxxxxx by will or the laws of descent and distribution.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date hereof.
(c) "Approved Offer" shall mean a tender or exchange offer for all
outstanding shares of Common Stock that is at a price and on terms approved,
prior to the acceptance for payment of shares under such tender or exchange
offer, by the Board of Directors of the Company.
(d) "Associate" shall include (x) any Person included in the
definition of "Associate" in Rule 12b-2 under the Exchange Act, as in effect on
the date of this Rights Agreement, and (y) any Affiliate of any such Person.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own," any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly (as determined pursuant to Rule
13d-3 or Rule 13d-5 under the Exchange Act as in effect on the date of this
Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time or
the satisfaction of one or more conditions or both) pursuant to any
agreement (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities), arrangement or understanding (whether in writing or not), or
upon the exercise of conversion rights, exchange rights, rights (other than
the Rights described herein), warrants or options, or otherwise; (provided,
however, that a Person shall not be deemed to be the Beneficial
Owner of, or to beneficially own, any security solely because such
security has been tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or Associates until such
tendered security is accepted for payment or exchange); or (B) the right to
vote or dispose of, or to direct the vote or disposition of, alone or in
concert with others, pursuant to any agreement, arrangement or
understanding (whether in writing or not); provided, however, that
a Person shall not be deemed pursuant to this clause (ii)(B) to be the
Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote, or direct the vote of,
such security (1) arises solely from a revocable proxy or consent given to
such Person or any such Person's Affiliates or Associates in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act; or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in clause (ii)(B) of
this paragraph (e)) or disposing of any securities of the Company.
If a Person shall be deemed to be the Beneficial Owner of any securities which
are not outstanding, such securities shall be deemed to be outstanding for
purposes of determining the percentage of Common Stock beneficially owned by
such Person but all other securities (including securities of the same class)
not actually outstanding shall not be deemed outstanding for such purposes.
(f) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of Texas, or the state in
which the Rights Agent is located are authorized or obligated by law or
executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(h) "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company (as it may be constituted from time to time during the
term of this Agreement), except that "Common Stock" when used with reference to
any Person other than the Company (or, in the case of a transaction referred to
in Section 13 hereof, if the Company is the successor to the other Person
referred to in clause (a), (b) or (c) of Section 13, or is the surviving
corporation, when thereafter used with reference to the Company) shall mean the
capital stock (or, in the case of a partnership or other unincorporated entity,
the equivalent equity interest) with the greatest voting power of such Person,
together with all rights and benefits (however denominated or constituted)
relating to such capital stock (including, without limitation, any rights or
warrants to acquire additional shares of such capital stock or other securities
or assets, or to participate in any trust for the benefit of holders of such
shares, or to share in the benefits of any agreements or other arrangements for
the benefit of such holders), whether or not such rights are yet exercisable,
and together with any other securities which are represented by the certificates
for such shares or are transferred in connection with transfers of such shares
(i) "Person" shall mean any individual, firm, corporation, limited
liability company, association, trust, partnership or any other entity or
organization.
(j) "Preferred Shares" shall mean shares of Series A Preferred Stock,
par value $0.01 per share, of the Company having the rights, preferences and
limitations set forth in the form of Certificate of Designations attached to
this Agreement as Exhibit A and, to the extent there are not a sufficient number
of shares of Series A Preferred Stock authorized to permit the full exercise of
the then outstanding Rights, any other series of preferred stock of the Company
designated for such purpose by the Board of Directors of the Company containing
terms substantially similar to the terms of the Series A Preferred Stock.
(k) "Stock Acquisition Date" shall mean the time and day of the first
public announcement (which for purposes of this definition shall include,
without limitation, the filing of a report pursuant to the Exchange Act) by the
Company or an Acquiring Person containing information indicating that an
Acquiring Person has become such. For purposes hereof, in the event that it is
publicly announced that any Person has acquired beneficial ownership of
sufficient shares of Common Stock to cause such Person to become an Acquiring
Person under clause (i) or clause (ii) of the definition of Acquiring Person,
such Person shall not be deemed an Acquiring Person for up to ten Business Days
(or such shorter period as shall be determined by the Board of Directors) if
such Person advises the Company that it acquired beneficial ownership
inadvertently (within the meaning of clause (x) of the proviso to the definition
of an Acquiring Person) and the Board of Directors is continuing to determine
whether such Person qualifies for the exclusion contained in such clause (x).
(l) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity as to which such Person beneficially owns sufficient
voting securities (or other ownership interests having ordinary voting power
sufficient, in the absence of contingencies) to elect at least a majority of its
directors (or individuals performing similar functions).
(m) The terms set forth below are defined in the Sections indicated
below:
Term Section
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Act 3(a)
Common Stock Equivalent 11(a)(iv)(B)
current market price 11(d)(i)
Current Value 11(a)(iv)(A)
Declaration Date Recitals
Distribution Date 3(a)
equivalent preferred shares 11(b)
Exchange Act l(b)
Expiration Date 7(a)
Final Expiration Date 7(a)
NASDAQ 11(d)(i)
Purchase Price 7(b)
Record Date Recitals
Redemption Price 23(a)
Right Recitals
Right Certificate 3(a)
Rights Agent Recitals
Security 11(d)(i)
Spread 11(a)(iv)(A)
Substitution Period 11(a)(iv)
Summary of Rights 3(b)
Trading Day 11(d)(i)
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. In the event that the Company appoints one or more
co-Rights Agents, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine. The Rights Agent shall have no
duty to supervise, and in no event shall be liable for, the acts or omissions of
any such co-Rights Agent.
Section 3. Issue of Right Certificate. (a) Until the Close of Business
on the earlier of (i) the tenth Business Day (or such later day 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 day of the first public
announcement by the Company or an Acquiring Person of facts establishing that
the Stock Acquisition Date has occurred (including any such date which is after
the Declaration Date even if prior to the Record Date), (ii) the tenth Business
Day (or such later day 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 of, or the first public announcement of the
intent of any Person (other than (A) the Company, any wholly owned Subsidiary of
the Company, any employee benefit plan of the Company or any of its wholly owned
Subsidiaries or any entity holding Common Stock which was organized, appointed
or established by the Company or any of its wholly owned Subsidiaries for or
pursuant to the terms of any such plan or (B) Xxxxxxx X. Xxxxxx or any Affiliate
or Associate of Xxxxxxx X. Xxxxxx, or any Person who becomes the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock upon the death of
Xxxxxxx X. Xxxxxx by will or the laws of descent and distribution) to commence
(which intention to commence remains in effect for five Business Days after such
announcement), a tender or exchange offer the consummation of which would result
in any Person acquiring (when added to any equity securities as to which such
Person is the Beneficial Owner immediately prior to such commencement)
Beneficial Ownership of 15% or more of the issued and outstanding shares of
Common Stock, and (iii) the tenth Business Day (or such later day 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 filing by any Person (other
than (A) the Company, any wholly owned Subsidiary of the Company, any employee
benefit plan of the Company or any of its wholly owned Subsidiaries or any
entity holding Common Stock which was organized, appointed or established by the
Company or any of its wholly owned Subsidiaries for or pursuant to the terms of
any such plan or (B) Xxxxxxx X. Xxxxxx or any Affiliate or Associate of Xxxxxxx
X. Xxxxxx, or any Person who becomes the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock upon the death of Xxxxxxx X. Xxxxxx by will
or the laws of descent and distribution) of a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to a contemplated
exchange offer to acquire (when added to any equity securities as to which such
Person is the Beneficial Owner immediately prior to such filing) beneficial
ownership of 15% or more of the issued and outstanding shares of Common Stock
(the earliest of the dates referred to in clauses (i), (ii) and (iii) above
being herein referred to as the "Distribution Date"), (y) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall also be deemed (other
than for purposes of this Section 3 and any provision of the Agreement referring
to the issuance of Rights Certificates) to be Right Certificates (as such term
is hereinafter defined)) and not by separate Right Certificates, and (z) the
Rights (and the right to receive Right Certificates) will be transferable only
simultaneously and together with the transfer of the underlying shares of Common
Stock. As soon as practicable after the Distribution Date, subject to Section
11(a)(iii) hereof, the Company shall prepare and execute and the Rights Agent
will countersign, and the Company will send or cause to be sent, by first-class,
postage-prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Distribution Date, as shown by the records of the Company, at
the address of such holder shown on such records, a right certificate,
substantially in the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as herein provided. As of and after the Close of Business on the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates and may be transferred only by the transfer of the Right
Certificates as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock.
(b) Promptly after the Record Date, the Company will mail a copy of
the Summary of Rights in the form attached hereto as Exhibit C (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Record Date, as shown by the
records of the Company, at the address of such holder shown on such records.
With respect to certificates for Common Stock outstanding as of the Close of
Business on the Record Date or issued prior to the Distribution Date, until the
Distribution Date, the Rights will be evidenced solely by such certificates
registered in the names of the holders thereof. Until the Distribution Date (or
the earlier redemption or expiration of the Rights), the surrender for transfer
of any certificate for Common Stock outstanding as of the Close of Business on
the Record Date shall also constitute the transfer of the Rights associated with
the shares of Common Stock represented thereby.
(c) The Company will mail to any record holder of a Right (including,
prior to the Distribution Date, a record holder of shares of Common Stock) a
copy of this Rights Agreement, without charge, within ten Business Days after
receipt of a written request therefor.
(d) All certificates for shares of Common Stock issued, or which
become outstanding after the date of this Agreement but prior to the earlier of
the Distribution Date and the Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them substantially the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Carbo
Ceramics Inc. and Mellon Investor Services LLC, as Rights Agent, dated
as of February 13, 2002, as it may from time to time be supplemented
or amended pursuant to its terms (the "Rights Agreement"), the terms
of which are hereby incorporated by reference and a copy of which is
on file at the principal executive offices of Carbo Ceramics Inc.
Under certain circumstances as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. Carbo Ceramics Inc. will mail to the
registered holder of this certificate a copy of the Rights Agreement
without charge within ten business days after receipt of a written
request therefor. Under certain circumstances provided for in the
Rights Agreement, Rights issued to or beneficially owned by any Person
who is an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) or any subsequent
holder of such Rights shall become null and void.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form of Exhibit B hereto, and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate, which do not
affect the rights, duties or responsibilities of the Rights Agent, and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or quotation system on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of one ten-thousandths of a
Preferred Share as shall be set forth therein at the Purchase Price (as
hereinafter defined), but the number and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed or attested any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered with the same force
and effect as though the person who signed or attested such Right Certificates
had not ceased to be such officer of the Company; and any Right Certificate may
be signed or attested on behalf of the Company by any person who, at the actual
date of the execution of such Right Certificate, shall be a proper officer of
the Company to sign or attest such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
all relevant information, the Rights Agent will keep or cause to be kept, at its
office designated by it for such purpose, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the name(s) and
address(es) of the holder(s) of each Right Certificate, the number of Rights
evidenced on its face by each Right Certificate, the certificate number of each
Right Certificate and the date of each Right Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) ___
Subject to the provisions of Sections 11(a)(iii) and 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 Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one ten-thousandths of a Preferred Share (or other
securities, cash and/or assets, as the case may be) as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
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 Right Certificate unless and until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side thereof and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner or Associates and
Affiliates of the foregoing) as the Company shall reasonably request. Thereupon
the Rights Agent shall countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment by the holder of Rights of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates. The Rights
Agent shall have no duty or obligation under this Section 6 unless and until it
is satisfied that all such taxes and/or charges have been paid in full.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of an indemnity
or security satisfactory to the Company and the Rights Agent, and reimbursement
to the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Sections 11(a)(iii) and (iv), the registered holder of
any Right Certificate may exercise the Rights evidenced thereby in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase shares and certificate on the
reverse side thereof duly executed, to the Rights Agent at its office designated
by it for such purpose, together with payment of the Purchase Price for each one
ten-thousandth of a Preferred Share (or other securities, cash and/or assets, as
the case may be) as to which the Rights are exercised, at or prior to the
earlier of (i) the Close of Business on February 13, 2012 (the "Final Expiration
Date"), (ii) the date and time at which the Rights are redeemed as provided in
Section 23 hereof, (iii) the date and time at which the Rights are exchanged as
provided in Section 24 hereof or (iv) the time at which the Rights expire
pursuant to Section 13(d) (such earliest date and time being referred to herein
as the "Expiration Date").
(b) The purchase price (the "Purchase Price") for each one
ten-thousandth of a Preferred Share pursuant to the exercise of a Right shall
initially be $200, shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and certificate duly executed, accompanied by payment of the Purchase
Price for the Preferred Shares (or other securities, cash and/or assets, as the
case may be) to be purchased and an amount equal to any applicable tax or charge
in cash, or by certified check or bank draft payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes such transfer agent to
comply with all such requests or (B) if the Company has elected to deposit the
Preferred Shares issuable upon exercise of the Rights hereunder into a
depository, requisition from the depositary agent depositary receipts
representing such number of one ten-thousandths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) deliver any such cash, promptly after its receipt, to or upon
the order of the registered holder of such Right Certificate. In the event that
the Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash and/or
property are available for distribution by the Rights Agent, if and when
necessary to comply with the Agreement. Notwithstanding the foregoing provisions
of this Section 7(c), the Company may suspend (with prompt notice thereof to the
Rights Agent) the issuance of Preferred Shares or shares of Common Stock or
other securities upon exercise of a Right for a reasonable period, not in excess
of 90 days, during which the Company seeks to register under the Securities Act
of 1933, as amended, and any applicable securities law of any other
jurisdiction, the Preferred Shares or shares of Common Stock or such other
securities to be issued pursuant to the Rights.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Sections 7(e), 11(a)(iii)
and 14 hereof.
(e) Notwithstanding any other provision of this Agreement, neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to a registered holder of any Right Certificate upon the occurrence
of any purported transfer or exercise as set forth in this Section 7 unless and
until the registered holder shall have completed and signed the certificate
contained in the form of election to purchase shares set forth on the reverse
side thereof and shall have provided such additional evidence of the identity of
the Beneficial Owner and former Beneficial Owner (and Associates and Affiliates
of the foregoing) as the Company or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificate shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares or other
securities or any Preferred Shares or other securities held in its treasury, the
number of Preferred Shares or other securities that, as provided in this
Agreement (including Section 11(a)(iv) hereof), will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all Preferred Shares and/or other securities
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(c) The Company covenants and agrees that it will pay when due and
payable any and all taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Preferred Shares and/or
other securities, as the case may be, upon the exercise of Rights. The Company
shall not, however, be required to pay any tax or charge which may be payable in
respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates or depositary receipts
for Preferred Shares and/or other securities, as the case may be, in a name
other than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates or
depositary receipts for Preferred Shares and/or other securities, as the case
may be, upon the exercise of any Rights until any such tax or charge shall have
been paid (any such tax or charge being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax or charge is due.
(d) So long as the Preferred Shares (and/or other securities) issuable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such exercise.
(e) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after occurrence of the Stock
Acquisition Date as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iv) hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act and the rules and regulations thereunder) until the earlier of (A) the date
as of which the Rights are no longer exercisable for such securities and (B) the
expiration of the Rights. The Company will also take such action as may be
appropriate to ensure compliance with the securities or "blue sky" laws of the
various states. The Company may temporarily suspend, in accordance with
applicable law, for a period of time not to exceed 90 days after the date set
forth in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall promptly notify the Rights Agent thereof and issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement (with prompt notice thereof to the
Rights Agent) at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
Section 10. Preferred Share Record Date. Each person in whose name any
certificate or depositary receipt for Preferred Shares and/or other securities,
as the case may be, is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the Preferred Shares and/or
other securities, as the case may be, represented thereby on, and such
certificate or depositary receipt shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable taxes or charges) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
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 or depositary
receipt shall be dated, the next succeeding Business Day on which the transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Shares or other securities of the Company 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 and kind of securities, or fractions
thereof, 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 Agreement (A) declare or pay a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide or split the outstanding Preferred Shares, (C)
combine or consolidate the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of capital stock issuable
upon exercise of a Right on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and kind
of shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the 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, split, combination,
consolidation or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that a Stock Acquisition Date occurs, proper
provision shall be made so that each holder of a Right (except as otherwise
provided in clause (iii) below) thereafter shall have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, in lieu of Preferred Shares, such number of
shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of one
ten-thousandths of a Preferred Share for which a Right is then exercisable
and (y) dividing that product by 50% of the current market price per share
of the Common Stock (determined pursuant to Section 11(d) hereof) on the
Stock Acquisition Date, and, at the time such provision is made the Company
shall cause to be reserved out of its authorized but unissued (or treasury)
shares of Common Stock, the lesser of (m) the number of shares of Common
Stock that will be sufficient to permit the exercise in full of all
outstanding Rights (other than those referred to in clause (iii) below) and
(n) the number of shares of Common Stock which are authorized by the
Company's certificate of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights.
(iii) Notwithstanding any provision of this Agreement, from and after
the Stock Acquisition Date, any Rights beneficially owned by (p) an
Acquiring Person or any Associate or Affiliate thereof, (q) a transferee of
an Acquiring Person (or Associate or Affiliate thereof) who becomes the
transferee of such Rights concurrently with such Acquiring Person becoming
such or at any time thereafter, (r) a transferee of an Acquiring Person (or
Associate or Affiliate thereof) who becomes a transferee prior to the
Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) by the Acquiring Person
to holders of its stock or other equity or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding, whether or not in writing, regarding the transferred Rights
or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding, whether or not
in writing, which has as a primary purpose or effect the avoidance of this
Section 11(a)(iii), or (s) a subsequent transferee of any of the foregoing,
shall become null and void, and any existing or subsequent holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant
to Section 3 hereof that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to the provisions of
this Section 11(a)(iii) or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void pursuant to the provisions
of this Section 11(a)(iii) or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the provisions of this
Section 11(a)(iii) shall be canceled; provided, that if any Right
Certificate that should not have been issued, or should have been
cancelled, pursuant to this sentence is issued or is not cancelled, it
shall nevertheless be void as provided above in this Section 11(a)(iii).
The Company shall use all reasonable efforts to insure that the provisions
of this Section 11(a)(iii) are complied with, but shall have no liability
to any holder of Right Certificates or any other Person as a result of the
failure to make any determination with respect to an Acquiring Person or
its Affiliates, Associates or to transferees of the foregoing.
(iv) In the event that the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing clause (ii) of this Section 11(a),
the Company shall:
(A) determine the excess of (1) the value (the "Current Value")
of the shares of Common Stock issuable upon the exercise of a Right
pursuant to the foregoing clause (ii) of this Section 11(a) (assuming
that there were a sufficient number of authorized but unissued shares
to permit exercise in full of all outstanding Rights for Common Stock)
over (2) the then current Purchase Price (such excess being referred
to herein as the "Spread"), and
(B) with respect to each Right, to the extent permitted by
applicable law and any contractual restrictions binding on the
Company, make adequate provision to substitute for such shares of
Common Stock issuable upon exercise of a Right pursuant to the
foregoing clause (ii) of this Section 11(a), upon payment of the
Purchase Price, (1) Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company has deemed
to have the same value as shares of Common Stock (such shares of
preferred stock being referred to herein as "Common Stock
Equivalents")), (2) debt securities of the Company, (3) cash, (4)
other assets, or (5) any combination of the foregoing (provided, that
in making any such provision, Rights shall, to the fullest extent
feasible in view of the number of shares of authorized Common Stock
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights, be exercisable for Common Stock), in each case
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company;
provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
Stock Acquisition Date, 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 Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread.
Notwithstanding the immediately preceding sentence, if the Board of Directors of
the Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not to more than ninety (90) days after
the Stock Acquisition Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period, as it may
be extended, being referred to herein as the "Substitution Period"). To the
extent that the Company determines that some action need be taken pursuant to
the first and/or second sentences of this Section 11(a)(iv), the Company (x)
shall provide, subject to the foregoing clause (iii) of this Section 11(a), that
such action shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall promptly notify the Rights Agent thereof and issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement (with prompt notice thereof to the Rights Agent)
at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iv), the terms of any Common Stock Equivalent shall be determined
so that such Common Stock Equivalent shall have the same value as the Common
Stock on the Stock Acquisition Date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges, and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the current market
price per Preferred Share (as defined in Section 11(d) hereof) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be the number of
Preferred Shares and equivalent preferred shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares to be so
offered (and/or the aggregate initial conversion price of the convertible
securities to be so offered) would purchase at such current market price and of
which the denominator shall be the number of Preferred Shares and equivalent
preferred shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a 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. Preferred Shares owned by or held for the account
of the Company or any of its Subsidiaries shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights, options
or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current market price per Preferred Share (as defined in Section 11(d) hereof) on
such record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and of which the denominator shall be such
current market price per Preferred Share. 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" for any security (a "Security" for purposes 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 (as such
term is hereinafter defined) immediately prior to such date; provided, however,
that in the event that the current market price per share of the Security is
determined during a period following the announcement by the issuer of such
Security of a dividend or distribution on such Security payable in shares of
such Security or securities convertible into (or exercisable or exchangeable
for) shares of such Security, or any subdivision, split, combination,
consolidation 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, split, combination, consolidation or
reclassification, then, and in each such case, the current market price shall be
appropriately adjusted to reflect ex-dividend or ex-distribution trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of the
Security are listed or admitted to trading or, if the shares of the Security are
not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or any successor
("NASDAQ") or such other system then in use, or, if on any such date the shares
of the Security 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 Security selected by the Board of Directors of the Company. If
on such date no such market maker is making a market in the Security, the fair
value of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used, such determination to be described in a
statement filed with the Rights Agent. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which the shares of the
Security are listed or admitted to trading is open for the transaction of
business or, if the shares of the Security are not listed or admitted to trading
on any national securities exchange, but are quoted on NASDAQ, a day on which
NASDAQ is in operation or if the shares of the Security are neither listed nor
admitted to trading on any national securities exchange nor quoted on NASDAQ, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current market
price" of the Preferred Shares shall be determined in accordance with the
method set forth in Section 11(d)(i), except that if the Preferred Shares
are not publicly traded, the "current market price" of the Preferred Shares
shall be conclusively deemed to be the current per share market price of
the 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 ten thousand. If neither
the Common Stock nor the Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(e) Notwithstanding anything herein to the contrary, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one ten-millionth of a Preferred Share. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment and (ii) the date of the expiration
of the right to exercise any Rights.
(f) In the event that at any time, as a result of an adjustment made
pursuant to Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Preferred Shares,
thereafter the number or amount of such other securities 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 securities contained in Sections 11(a), (b), (c), (g), (h), (j)
and (k), and the provisions of Sections 7, 9, 10, 13 and 14 of this Agreement
with respect to the Preferred Shares shall apply on like terms to any such other
securities.
(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 ten-thousandths of a
Preferred Share 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) of this Agreement, upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c) of this
Agreement, 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 ten-thousandths of a Preferred Share
(calculated to the nearest one ten-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one ten-thousandths of a Preferred Share
covered by a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights held by each holder of Rights,
in substitution for any adjustment in the number of one ten-thousandths of a
Preferred Share purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one ten-thousandths of a Preferred Share for which it was
exercisable immediately prior to such adjustment. Each holder of a Right held of
record prior to such adjustment of the number of Rights shall become the holder
of that number of Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement and promptly
notify the Rights Agent of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made, and information as to the manner in which
such adjustment is to be effected. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have not been issued, in the case of a stock
split, stock dividend or similar event, such adjustment in the number of Rights
held by each existing holder of Rights shall be effected (unless the Board of
Directors otherwise elects), by allocating the adjusted number of Rights
proportionately among all shares held by such holder immediately after such
stock split, stock dividend or other event. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i) the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date, Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one ten-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one ten-thousandth of a Preferred
Share and the number of one ten-thousandths of a Preferred Share which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one ten-thousandth of the then par value, if any, of
the Preferred Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt notice of such
election to the Rights Agent) until the occurrence of such event the issuing to
the holder of any Right exercised after such record date of the Preferred Shares
and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(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 the Company's Board of Directors shall, in its sole discretion,
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at
less than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or exchangeable
for Preferred Shares, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that the Company shall, at any time after the date of
this Agreement and prior to the Distribution Date, (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide or split the outstanding Common Stock, (iii) combine or consolidate
the outstanding Common Stock into a smaller number of shares or (iv) effect a
reclassification of its outstanding Common Stock, the number of Rights
associated with each share of Common Stock shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Common Stock
immediately following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction, the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following such event. The Company covenants and
agrees that it shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a wholly-owned Subsidiary of the
Company in a transaction which does not violate Section 11(o) hereof), (ii)
merge with or into any other Person (other than a wholly-owned Subsidiary of the
Company in a transaction which does not violate Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
does not violate Section 11(o) hereof), if (x) at the time of or immediately
after such consolidation, merger, sale or transfer there are any charter or
by-law provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits intended to be afforded
by the Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after a Stock Acquisition
Date it will not, except as permitted by Section 24 or Section 27 hereof, take
(or permit any Subsidiary to take) any action the purpose of which is to, or if
at the time such action is taken it is reasonably foreseeable that the effect of
such action is to, materially diminish or eliminate the benefits intended to be
afforded by the Rights.
Section 12. Certification of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts and computations accounting for
such adjustment and (b) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such certificate. The Rights Agent
shall be fully protected in relying on any such certificate and on the
adjustment therein contained, and shall have no duty with respect to and shall
not be deemed to have knowledge of any such adjustment unless and until it shall
have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event (a "Section 13 Event") that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any Person or Persons, (y) the Company shall
consolidate with, or merge with and into, any Person or Persons, and the Company
shall be the continuing or surviving corporation of such consolidation or merger
(other than, in a case of any transaction described in (x) or (y), a merger or
consolidation which would result in all of the securities generally entitled to
vote in the election of directors ("voting securities") of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and holders of such
securities not having changed as a result of such merger or consolidation), or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole and
calculated on the basis of the Company's most recent regularly prepared
financial statements) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which does not
violate Section 11(o) hereof), then, and in each such case (except as provided
in Section 13(d) hereof), proper provision shall be made so that (i) each holder
of a Right, except as provided in Section 11(a)(iii) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then-current
Purchase Price in accordance with the terms of this Agreement and in lieu of the
Preferred Shares, Common Stock and other securities or assets of the Company,
such number of validly authorized and issued, fully paid, non-assessable and
freely tradeable shares of Common Stock of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (A)
multiplying the then current Purchase Price by the number of one ten-thousandths
of a Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of a Section 13 Event (without taking into account any
amendment previously made pursuant to Section 11(a)(ii)) and (B) dividing that
product by 50% of the current market price per share of the Common Stock of such
Principal Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; and (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock in accordance with Section 9 hereof (applying the provisions thereof with
respect to Preferred Shares of the Company to the Common Stock of such Principal
Party)) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be possible, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a): (A) the Person that is the
issuer of any securities into which Common Stock of the Company is
converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer of Common Stock that has the greatest
aggregate market value or (B) if no securities are so issued, the
Person that is the other party to such merger or consolidation, or, if
there is more than one such Person, the Person the Common Stock of
which has the greatest aggregate market value (including, if
applicable, the Company if it is the surviving corporation); and
(ii) in the case of any transaction described in clause (z) 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 the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons which is the issuer of
Common Stock having the greatest aggregate market value;
provided, however, that in any of the cases described in Section 13(b)(i) or
(b)(ii) above, (1) if the shares of Common Stock of such Person are not at such
time and have not been continuously over the preceding twelve month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the shares of Common Stock of which are
and have been so registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the shares of Common Stock of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the shares of Common Stock having the greatest aggregate market value;
and (3) in case such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint ventures and the Principal
Parties in each such chain shall bear the obligations set forth in this Section
13 in the same ratio as their direct or indirect interests in such Person bear
to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
its authorized shares of Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and that all rights of first refusal or preemptive rights in respect of the
issuance of shares of Common Stock of the Principal Party upon exercise of the
outstanding Rights have been waived and that such transaction shall not result
in a default by the Principal Party under this Agreement, and further providing
that, not later than the effective time of such Section 13 Event, the Principal
Party at its own expense shall:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon the exercise
of the Rights on an appropriate form, and cause such registration
statement to become effective as soon as practicable after such filing
and prior to the effective time of such Section 13 Event, and to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act;
and
(iv) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility
requirement for quotation on NASDAQ.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Stock
Acquisition Date, the Rights which have not theretofore been exercised pursuant
to Section 11(a)(ii) shall thereafter become exercisable in the manner described
in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, this
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if: (i) such transaction is consummated with a
Person or Persons who acquired Common Stock pursuant to an Approved Offer (or an
Affiliate of any such Person or Persons) as promptly as reasonably practical
(and in any event within one year) following consummation of such Approved
Offer; (ii) the price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all holders of Common
Stock whose shares were purchased pursuant to such Approved Offer; and (iii) the
form of consideration offered in such transaction is the same as the form of
consideration paid pursuant to such Approved Offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
(e) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate of Incorporation or By-Laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of Section 13, then, in such
event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended, or
that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights (except, prior to the
Distribution Date, as provided in Section 11 hereof) or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights, as selected by the
Board of Directors of the Company. If on any such date the Rights are not quoted
by any such organization and no professional market maker is making such 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) Following the occurrence of the Stock Acquisition Date or a
Section 13 Event, the Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
ten-thousandth) upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which are integral
multiples of one ten-thousandth). Fractions of Preferred Shares in integral
multiples of one ten-thousandth of a Preferred Share may, at the 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 Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one ten-thousandth of a Preferred Share, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of one
Preferred Share (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 holder of a Right by the acceptance thereof expressly waives
any 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
Agreement, other than the rights of action vested in the Rights Agent under this
Agreement, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, any holder of the Common Stock), may, on his own behalf and
for his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only simultaneously and together with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6, Section 7(e) and Section 11(a) hereof, the
Company and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated 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; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its best efforts to have any such
injunction, order, decree, judgment or ruling lifted, dissolved or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 of this Agreement), or to receive
dividends or other distributions or to exercise any preemptive or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation,
delivery, execution, administration and amendment of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, damage, judgment, fine, settlement, penalty, claim, demand, cost or
expense, incurred without gross negligence, bad faith or willful misconduct (as
each is finally determined by a court of competent jurisdiction) on the part of
the Rights Agent, for any action taken, suffered or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability.
The costs and expenses incurred in enforcing this right of indemnification shall
be paid by the Company. The provisions of this Section 18 and Section 20 below
shall survive the termination of this Agreement, the exercise or expiration of
the Rights and the resignation or removal of the Rights Agent.
The Rights Agent shall be authorized to rely on, shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Agreement in reliance upon any Right Certificate or certificate for shares of
Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document reasonably believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such Person would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificate so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificate either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificate shall have the full force provided in the Right Certificate
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
the duties and obligations expressly set forth in this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, upon the following terms and conditions, as to all of which the Company
and the holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent, and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or any
Affiliate or Associate thereof) be proved or established by the Company prior to
taking or, suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be
full authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability for or in respect of any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct, as each is finally determined by a
court of competent jurisdiction. Anything to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage. Any liability of the Rights Agent under this
Rights Agreement will be limited to the amount of fees paid by the Company to
the Rights Agent.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof), or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not have any liability for, nor be under
any responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be liable or responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be liable or responsible for any change in
the exercisability of the Rights (including Rights becoming null and void
pursuant to Section 11(a)(iii) hereof); nor shall it be liable or responsible
for any adjustment required under the provisions of Sections 11 or 13 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will inform the Rights Agent promptly
upon the Company's determination that a Person has become an Acquiring Person
and the Rights Agent will not be responsible for determining the status of a
Person as an Acquiring Person prior to such notification except as such status
may be indicated in the assignment or election to purchase of a Right
Certificate. The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, the
Assistant Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and such
advice or instructions shall be full authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it in good faith in accordance with the
advice or instructions of any such officer. 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, suffered or omitted by it 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 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, suffering or omitting 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, Affiliate, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company, any holders of Rights or any other Person
resulting from any such act, default, neglect or misconduct, absent gross
negligence or willful misconduct, as each is finally determined by a court of
competent jurisdiction, in the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to any item therein, the
Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), a Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (i)
a Person organized and doing business under the laws of the United States or of
any state thereof, in good standing, having its principal office in the United
States of America, which is authorized under applicable laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (ii) an Affiliate of the Person described in clause (i) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall, upon payment of its charges, deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provision, in the event of resignation, removal or
incapacity of the Rights Agent, the Company shall have the authority to act as
the Rights Agent until a successor Rights Agent shall have assumed the duties of
the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares of stock or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date (other than upon exercise or exchange of a Right) and prior to the
Expiration Date, the Company, subject to Section 11(a)(iii) hereof, (a) shall,
with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Company to the extent that the terms of such securities do not otherwise
adequately adjust for the issuance of Rights, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
the such issuance or sale; provided, however, that (i) the Company shall not be
obligated to issue any Right Certificate if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or to the Person to whom
such Rights Certificate would be issued, and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Company may, by resolution of its
Board of Directors, at its option, at any time prior to the earlier of (x) the
Stock Acquisition Date and (y) the Close of Business on the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any Common
Stock split, Common Stock dividend or similar transaction occurring after the
date of this Rights Agreement (such redemption price being hereinafter referred
to as the "Redemption Price"). The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the "current market
price", as defined in Section 11(d)(i) hereof, of the Common Stock at the time
of such Board resolution) or any other form of consideration deemed appropriate
by the Board of Directors.
(b) Immediately upon the adoption of an effective resolution of
the Board of Directors of the Company to redeem the Rights in compliance with
Section 23(a) (or upon the subsequent satisfaction of all conditions to such
redemption established by such resolution), evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within ten Business Days after the action of the Board of Directors ordering the
redemption of the Rights (or such subsequent satisfaction of all such
conditions), the Company shall give notice of such redemption to the Rights
Agent and the holders of the then-outstanding Rights by mailing such notice to
all such holders at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase any Rights at any time
in any manner other than that specifically set forth in this Section 23, and
other than in connection with the repurchase of Common Stock of the Company
prior to the Distribution Date.
(c) In the event that the Board of Directors adopts an effective
resolution to redeem the Rights in compliance with Section 23(a), the Company
may, at its option, discharge all of its obligations with respect to the Rights
by (i) issuing a press release announcing the manner of redemption of the Rights
in accordance with this Agreement and (ii) mailing payment of the Redemption
Price to the registered holders of the Rights at their last addresses as they
appear on the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent of the Common Stock, and upon
such action, all outstanding Rights and Right Certificates shall be null and
void without any further action by the Company.
Section 24. Exchange. (a) The Board of Directors of the Company may,
at its option, at any time after the Stock Acquisition Date, exchange all or
part of the then-outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section
11(a)(iii) hereof) for Common Stock (or Common Stock equivalents) at an exchange
ratio of one share of Common Stock per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
of this Rights Agreement (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 the (i) Company, any wholly owned Subsidiary of the Company,
any employee benefit plan of the Company or any of its wholly owned Subsidiaries
or any entity holding Common Stock which was organized, appointed or established
by the Company or any of its wholly owned Subsidiaries for or pursuant to the
terms of any such plan or (ii) Xxxxxxx X. Xxxxxx or any Affiliate or Associate
of Xxxxxxx X. Xxxxxx, or any Person who becomes the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock upon the death of Xxxxxxx X.
Xxxxxx by will or the laws of descent and distribution), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to and in compliance with
subsection (a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights, which excludes Rights that have become
void pursuant to the provisions of Section 11(a)(iii) hereof, shall be to
receive that number of shares of Common Stock, or Common Stock Equivalents,
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly file notice of such Board action with
the Rights Agent and 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 shall promptly 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.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit an
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required, pursuant to this Section 24, to
issue fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates, with regard to which such fractional shares of Common Stock would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this
paragraph (d), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24, and the value of any
Common Stock Equivalent shall be deemed to have the same current market value as
the Common Stock on such date.
Section 25. Notice of Certain Events. In case the Company shall
propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution described to the holders of its Preferred Shares (other
than a regular periodic cash dividend), or (b) to offer to the holders of its
Preferred Shares rights, options or warrants to subscribe for or to purchase any
additional Preferred Shares or securities convertible into Preferred Shares, or
(c) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred Shares)
or any other event described in Section 11(a)(i) hereof, or (d) to effect any
merger, consolidation or other combination into or with any Person (other than a
Subsidiary of the Company in a transaction that does not violate Section 11(o)
hereof), 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 Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
does not violate Section 11(o) hereof), or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 26 hereof, a
notice of such proposed action to the extent feasible and file a certificate
with the Rights Agent to that effect, which shall specify the record date for
the purposes of such stock dividend, distribution of rights or Rights, 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 Common Stock and/or Preferred Shares, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (a), (b) or (e) above at least twenty days prior to
the record date for determining holders of the Common Stock for purposes of such
action, and in the case of any such other action, at least twenty days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock and/or Preferred Shares, whichever shall
be earlier.
The Company shall, on the Stock Acquisition Date, or as soon as
practicable thereafter, give each holder of a Right, in accordance with Section
26 hereof, a notice of the occurrence of such event, which notice shall describe
the event and the consequences of such event to holders of Rights under Sections
11(a)(ii), (iii) and (iv) hereof.
The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Carbo Ceramics Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Mellon Investor Services LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Relationship Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, if prior
to the Distribution Date, to the holder of any certificate for shares of Common
Stock) 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. The Company may, and the
Rights Agent shall, if the Company so directs, from time to time supplement or
amend this Agreement without the approval of any holders of Rights 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
(provided that any amendment made pursuant to clause (i) or (ii) hereof after a
Stock Acquisition Date shall not materially adversely affect the interests of
the holders of Right Certificates (other than an Acquiring Person or any
Affiliate or Associate thereof)), (iii) prior to a Stock Acquisition Date, to
effect any other change or modification which the Company may deem necessary or
desirable or (iv) after a Stock Acquisition Date, to make any other provisions
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or any Affiliate
or Associate thereof). Notwithstanding anything contained in this Agreement to
the contrary, this Agreement may not be amended or supplemented (x) to reinstate
a right of redemption if the Rights are not then redeemable or (y) to decrease
the Redemption Price. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
has been approved by the Company's Board of Directors and is in compliance with
the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment; provided, however, that the Rights Agent may, but shall not be
obligated to, enter into any such supplement or amendment that changes or
increases its rights, duties, obligations or immunities under this Agreement.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed to coincide with the interests of holders of shares of Common Stock
(other than an Acquiring Person or any Affiliate or Associate thereof).
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, of the Common Stock of the Company) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, of the Common Stock of the Company).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement or the Rights is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of this Agreement and the Rights shall remain in full force and effect
and shall in no way be affected, impaired or invalidated; provided, however,
that notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to
be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth Business Day following
the date of such determination by the Board of Directors.
Section 31. Determinations and Actions by the Board of Directors, etc.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not to redeem the Rights pursuant to Section 23
hereof or to supplement or amend the Agreement and whether any proposed
supplement or amendment adversely affects the interests of the holders of Right
Certificates and comports with the requirements of Section 27 hereof or to find
or to announce publicly that any Person has become an Acquiring Person). For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock or other securities outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock or any other securities of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act as in effect on the
date of this Agreement. All such actions, calculations, interpretations and
determinations (including for purpose of clause (y) below, all omissions with
respect to the foregoing) which 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 and all other parties, and
(y) not subject the Board of Directors of the Company or any director to any
liability to the holders of the Rights.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the date and the year first above written.
Attest: CARBO CERAMICS INC.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx Xxxxxxx
------------------------------- ------------------------------
Title: Assistant Title: President and Chief
Secretary Executive Officer
MELLON INVESTOR SERVICES LLC
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
Title: Assistant Vice President,
Relationship Manager
EXHIBIT A
---------
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A PREFERRED STOCK
of
CARBO CERAMICS INC.
(Pursuant to Section 151 of the Delaware General Corporation Law)
-------------------------
Carbo Ceramics Inc., a corporation organized and existing under the
Delaware General Corporation Law (hereinafter called the "Corporation"), hereby
certifies that the following resolution was adopted by the Board of Directors of
the Corporation as required by Section 151 of the General Corporation Law by at
a duly convened meeting of the Board of Directors dated February 13, 2002:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share, of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights, preferences,
and limitations thereof as follows:
Series A Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Preferred Stock") and the number
of shares constituting the Preferred Stock shall be 2,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
corporation convertible into Preferred Stock. The Corporation's stated capital
with respect to each issued and outstanding share of Preferred Stock shall be
$.01.
Section 2. Dividends and Distributions.
(A) The holders of shares of Preferred Stock, in preference to the
holders of Common Stock, par value $.01 per share (the "Common Stock"), of
the Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the fifteenth day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a) $.01 or
(b) subject to the provision for adjustment hereinafter set forth, ten
thousand times the aggregate per share amount of all cash dividends, and
ten thousand times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Preferred Stock. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
split or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in
shares of Common Stock), then in each such case the amount to which holders
of shares of Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per
share on the Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not
more than 50 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Preferred Stock
shall have the following voting rights:
(A) Each share of Preferred Stock shall entitle the holder thereof to
ten thousand votes on all matters submitted to a vote of the stockholders
of the Corporation. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or split or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock), then in each such case
the number of votes to which holders of shares of Preferred Stock were
entitled to immediately prior to such event shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation, in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock, or by law, the holders of shares
of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by the
Certificate of Incorporation or by law, holders of Preferred Stock shall
have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Subject to the provisions of the Certificate of Incorporation,
whenever quarterly dividends or other dividends or distributions payable on
the Preferred Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Preferred Stock,
except dividends paid ratably on the Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Preferred Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends and upon dissolution, liquidation or winding up) to the
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Preferred Stock, or any shares of stock ranking on a
parity with the Preferred Stock, except in accordance with the terms
of the Certificate of Incorporation and with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The 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 could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation, or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Preferred Stock
unless, prior thereto, the holders of shares of Preferred Stock shall have
received $2,000,000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 10,000 times the aggregate amount to
be distributed per share to holders of Common Stock, or (2) to the holders of
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Preferred Stock, except distributions made
ratably on the Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or split or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 10,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or split or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange of
change of shares of Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. Ranking. The Preferred Stock shall rank on a parity as to
dividends and upon liquidation, dissolution or winding up with all other
Preferred Stock issued by the Corporation.
Section 9. No Redemption. The shares of Preferred Stock shall not be
redeemable.
Section 10. Fractional Shares. The Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of shares of Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its President and attested by its Secretary as of
the 13th day of February, 2002.
-----------------------------
President
Attest:
--------------------
Secretary
EXHIBIT B
---------
Form of Right Certificate
Certificate No. R- ______________ Rights
NOT EXERCISABLE AFTER FEBRUARY 13, 2012 OR EARLIER IF NOTICE
OF REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR ANY ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
CARBO CERAMICS 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 February 13, 2002 (the "Rights Agreement") between Carbo Ceramics Inc., a
Delaware corporation (the "Company"), and Mellon Investor Services LLC, a New
Jersey limited liability company, as rights agent (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date and prior to
5:00 P.M. (New York City time) on the Expiration Date (as such terms are defined
in the Rights Agreement) at the office of the Rights Agent designated for such
purpose, or of its successors as Rights Agent, one ten-thousandth of a
fully-paid, nonassessable share of Series A Preferred Stock, par value $0.01 per
share (the "Preferred Stock"), of the Company, at a purchase price of $200 per
one ten-thousandth of a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the appropriate Form
of Election to Purchase Shares duly executed. The number of Rights evidenced by
this Right Certificate (and the number of shares which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, have
been determined as of February 13, 2002.
As provided in the Rights Agreement, the Purchase Price and the number
of one ten-thousandths of a share of Preferred Stock or other securities which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events, and in certain circumstances may be exercised to purchase
securities of issuers other than the Company.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above mentioned office of the Rights
Agent and are available free of charge upon written request from the Company at:
Carbo Ceramics Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Secretary
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one ten-thousandths
of a share of Preferred Stock as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive, upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right (payable in cash, shares of Common Stock
or other consideration), appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (and the Rights Agreement itself) may be
amended by action of the Company's Board of Directors.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one ten-thousandth, 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 Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of .
-----------------, -----
ATTEST: CARBO CERAMICS INC.
By: By:
--------------------- ---------------------
Title: Title:
Countersigned:
MELLON INVESTOR SERVICES LLC, as Rights Agent
By:
---------------------
Authorized Signature
(Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED hereby sells, assigns and
-----------------------
transfers unto
----------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney,
-----------------------
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated:
----------------, ---- ------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
----------------, ---- ------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE SHARES
(To be executed if holder desires
to exercise the Right Certificate)
To Carbo Ceramics Inc.:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the
------------------
Preferred Stock (or such other securities of the Company
or any other person) and requests that certificates for such Preferred Stock
be issued in the name of:
Please insert social security or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance 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)
Dated:
----------------, ---- ------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
----------------, ---- ------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase must correspond to
the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
EXHIBIT C
---------
CARBO CERAMICS INC.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On February 13, 2002 (the "Declaration Date"), the Board of Directors
of Carbo Ceramics Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Common Stock of the Company (the "Common
Stock"). The dividend is payable on February 25, 2002 to the stockholders of
record as of the Close of Business on such date (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one ten-thousandth
of a share of the Company's Series A Preferred Stock, par value $0.01 per share
(the "Preferred Shares") at a price of $200 per one ten-thousandth of a share
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and Mellon Investor Services LLC (the "Rights Agent").
Until the Close of Business on the earliest of (i) the tenth business
day (or such later day 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 a public announcement that (A) a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of Common Stock of the
Company (other than pursuant to a tender offer for all outstanding shares of
Common Stock at the price and on terms approved by the Board of Directors)
subsequent to February 13, 2002 or (B) a person or group of affiliated or
associated persons who, on February 13, 2002, was the beneficial owner of 15% or
more of the outstanding shares of Common Stock, has acquired more than an
additional 1% of the outstanding shares of Common Stock (each, an "Acquiring
Person", provided that such term shall not include (x) the Company, any wholly
owned Subsidiary of the Company, any employee benefit plan of the Company or any
of its wholly owned subsidiaries or any entity holding Common Stock which was
organized, appointed or established by the Company or any of its wholly owned
subsidiaries for or pursuant to the terms of any such plan or (y) Xxxxxxx X.
Xxxxxx or certain of his affiliates and transferees); (ii) the tenth business
day (or such later day 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 of, or the first public announcement of the
intent of any person (other than (x) the Company, any wholly owned Subsidiary of
the Company, any employee benefit plan of the Company or any of its wholly owned
subsidiaries or any entity holding Common Stock which was organized, appointed
or established by the Company or any of its wholly owned subsidiaries for or
pursuant to the terms of any such plan or (y) Xxxxxxx X. Xxxxxx or certain of
his affiliates and transferees) to commence (which intention to commence remains
in effect for five business days after such announcement) a tender or an
exchange offer the consummation of which would result in any Person acquiring
(when added to any shares as to which such person is the beneficial owner
immediately prior to such commencement) beneficial ownership of 15% or more of
the issued and outstanding shares of Common Stock; and (iii) the tenth business
day (or such later day 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 filing by any Person (other than (x) the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan of the Company or any of
its wholly owned subsidiaries or any entity holding Common Stock which was
organized, appointed or established by the Company or any of its wholly owned
subsidiaries for or pursuant to the terms of any such plan or (y) Xxxxxxx X.
Xxxxxx or certain of his affiliates and transferees) of a registration statement
under the Securities Act of 1933, as amended, with respect to a contemplated
exchange offer to acquire (when added to any shares as to which such person is
the beneficial owner immediately prior to such filing) beneficial ownership of
15% or more of the issued and outstanding shares of Common Stock (the earliest
of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Company's Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate and this
Summary.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock. New Common Stock
certificates issued after the Record Date upon transfer or new issuance of the
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date, the surrender for transfer of any of the
Common Stock certificates outstanding as of the date of the Rights Agreement
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate and the number of Rights associated with each
share of Common Stock shall be proportionately adjusted in the event of any
dividend in Common Stock on the Common Stock or subdivision, combination or
reclassification of the Common Stock (except as otherwise provided in the Rights
Agreement). As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the Close of Business on the
Distribution Date and such separate certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on February 13, 2012, unless earlier redeemed or exchanged by the
Company as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares or the Common Stock, (ii) upon the grant to holders of Preferred Shares
of certain rights or warrants to subscribe for Preferred Shares or convertible
securities at less than the current market price of the Preferred Shares or
(iii) upon the distribution to holders of Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends or dividends
payable in Preferred Shares) or of subscription rights or warrants (other than
those referred to above).
In the event that any person becomes an Acquiring Person, the Rights
Agreement provides that proper provision would be made so that each holder of a
Right, other than the Acquiring Person and certain of its transferees (whose
Rights would thereafter be null and void), would thereafter have the right to
receive upon exercise of a Right, that number of shares of the Common Stock
having a market value of two times the Purchase Price. In the event of certain
mergers, consolidations or transfers of assets or earnings power involving the
Company after the public announcement that an Acquiring Person has become such,
each Right, other than Rights held by the Acquiring Person and certain of its
transferees (whose Rights would thereafter be null and void), will be converted
into the right to purchase, for the Purchase Price, common stock of the
surviving corporation (which may be the Company) with a market value of two
times the Purchase Price.
At any time after the public announcement that an Acquiring Person has
become such and prior to the time that any person or group becomes the
beneficial ownership of 50% or more of the outstanding Common Stock, the Board
of Directors may exchange the Rights (other than Rights held by any Acquiring
Person or its transferees, which would thereafter be null and void) for Common
Stock at a ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $.01 but will be entitled to an aggregate dividend
of 10,000 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $2,000,000 per share but will be entitled to
an aggregate payment of 10,000 times the payment made per share of Common Stock.
Each Preferred Share will have 10,000 votes, voting together with the Common
Stock. Finally, in the event of any merger, consolidation or other transaction
in which shares of Common Stock are exchanged, each Preferred Share will be
entitled to receive 10,000 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend and
liquidation rights, the value of the one ten-thousandth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares (other than fractions that are
integral multiples of one ten-thousandth) will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading date prior to the date of exercise.
At any time prior to the public announcement that an Acquiring
Person has become such, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash, shares of Common Stock or
other consideration), appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (the "Redemption
Price"). Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, no right
to vote or to receive dividends.
At any time prior to the public announcement that an Acquiring Person
has become such, the Company may amend the Rights Agreement and the terms of the
Rights in any manner deemed necessary or desirable. Thereafter, the Rights
Agreement and the terms of the Rights may be amended by the Company under
certain circumstances, but not in any manner that adversely affects the
interests of the holders of the Rights (other than an Acquiring Person).
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement will be available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference
