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EXHIBIT 4.19
SOUTHWEST GAS CORPORATION,
a California corporation
and
XXXXXX TRUST COMPANY OF CALIFORNIA,
Rights Agent
----------------------
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of February 9, 1999
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions............................................................1
Section 2. Appointment of Rights Agent....................................................4
Section 3. Issuance of Right Certificates.................................................4
Section 4. Form of Right Certificates.....................................................6
Section 5. Counter signature and Registration.............................................6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates........................7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................8
Section 8. Cancellation and Destruction of Right Certificates............................10
Section 9. Reservation and Availability of Shares; Registration..........................10
Section 10. Record Date...................................................................11
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights............11
Section 12. Certification of Adjusted Purchase Price or Number of Shares..................17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..........18
Section 14. Fractional Rights and Fractional Shares.......................................20
Section 15. Rights of Action..............................................................21
Section 16. Agreement of Right Holders....................................................22
Section 17. Right Certificate Holder Not Deemed a Shareholder.............................22
Section 18. Concerning the Rights Agent...................................................22
Section 19. Merger or Consolidation or Change of Name of Rights Agent.....................23
Section 20. Duties of Rights Agent........................................................23
Section 21. Change of Rights Agent........................................................25
Section 22. Issuance of New Right Certificates............................................26
Section 23. Redemption....................................................................26
Section 24. Notice of Proposed Actions....................................................26
Section 25. Notices.......................................................................27
Section 26. Supplements and Amendments....................................................27
Section 27. Exchange......................................................................28
Section 28. Successors....................................................................29
Section 29. Determination and Actions Taken by the Board of Directors.....................29
Section 30. Conditions to the Agreement...................................................29
Section 31. Benefits of this Agreement....................................................29
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Section 32. Governing Law.................................................................29
Section 33. Counterparts..................................................................30
Section 34. Section Headings..............................................................30
Section 35. Severability..................................................................30
Exhibit A Form of Right Certificate...............................................A-1
Exhibit B Form of Summary of Rights...............................................B-1
Exhibit C Certificate re Junior Participating Preference Stock....................C-1
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AMENDED AND RESTATED RIGHTS AGREEMENT
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of February 9,
1999 between Southwest Gas Corporation, a California corporation (the
"Company"), and Xxxxxx Trust Company of California, as Rights Agent.
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared the distribution of one right for (i) each share of Common Stock of the
Company ("Common Stock") outstanding at the Close of Business (as hereinafter
defined) on April 15, 1996 (the "Rights Record Date"), each right representing
the right to purchase one Unit consisting, initially, of one one-hundredth of a
share of Junior Participating Preference Stock, and (ii) each additional share
of Common Stock which shall become outstanding between the Rights Record Date
and the earliest of the Distribution Date, the Expiration Date (as such terms
are hereinafter defined) and the date, if any, on which such rights may be
redeemed, all upon the terms and subject to the conditions hereinafter set forth
(each such right being hereinafter referred to as a "Right");
NOW, THEREFORE, the parties agree as follows:
Section 1. Certain Definitions.
(a) For purposes of this Agreement, the following terms have the
meanings indicated:
"Acquiring Person" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner (within the meaning of
Section 1(b)) of a Substantial Block of Voting Stock, but shall
not include (i) an Exempt Person or (ii) any Person who or which
acquires a Substantial Block of Voting Stock in connection with a
transaction or series of transactions approved prior to such
transaction or transactions by the Board of Directors of the
Company; provided that no person shall become an Acquiring Person
solely as a result of a reduction in the number of shares of
Voting Stock outstanding, unless and until such Person shall
thereafter become the Beneficial Owner of additional shares
constituting 1% or more of the general voting power of the
Company.
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect as of
the date hereof.
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which banking institutions in the States of
California, New York or Nevada are authorized or obligated by law
or executive order to close.
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"Close of Business" on any given date shall mean 5:00
p.m., Las Vegas time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 p.m., Las
Vegas time, on the next succeeding Business Day.
"Common Stock" shall have the meaning assigned to it in
the preamble; and "common stock" when used with reference to
Persons other than the Company shall mean: (i) in the case of
Persons organized in corporate form, the capital stock or equity
security with the greatest voting power of such Person or, if
such Person is a Subsidiary of another Person, of the Person or
Persons which ultimately control such first-mentioned Person; and
(ii) in the case of Persons not organized in corporate form, the
units of beneficial interest which (A) represent the right to
participate generally in the profits and losses of such Person
(including without limitation any flow-through tax benefits
resulting from an ownership interest in such Person) and (B) are
entitled to exercise the greatest voting power of such Person or,
in the case of a limited partnership, shall have the power to
remove the general partner or partners.
"Distribution Date" shall have the meaning assigned to it
in Section 3(a).
"Equivalent Stock" shall have the meaning assigned to it
in Section 7(a).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
"Exempt Person" shall mean the Company, any Subsidiary of
the Company and any employee benefit plan or employee stock plan
of the Company or of any Subsidiary of the Company, or any trust
or other entity organized, established or holding shares of
Common Stock by, for or pursuant to, the terms of any such plan.
"Expiration Date" shall have the meaning assigned to it in
Section 7(a).
"Offer Date" shall have the meaning assigned to it in
Section 3(a).
"Person" shall mean any individual, firm, corporation,
partnership, limited liability company, association, group (as
such term is used in Rule 13d-5 promulgated under the Exchange
Act as in effect on the date hereof), trust or other entity and
shall include any successor by merger (or otherwise) of any of
the foregoing.
"Principal Party" shall have the meaning assigned to it in
Section 13(b).
"Purchase Price" shall mean the price payable for one Unit
upon exercise of a Right.
"Qualified Offer" shall mean a tender or exchange offer
for all outstanding Common Stock at a price and on terms
determined to be adequate and otherwise in the best interests of
the Company and its shareholders (other than the Person or
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an Affiliate or Associate thereof on whose behalf the offer is
made) by at least a majority of the Directors who are not
representatives of or affiliated with the Person making such
offer or any Affiliate or Associate of such Person.
"Redemption Price" shall have the meaning assigned to it
in Section 23(a).
"Right" shall have the meaning assigned to it in the
preamble.
"Rights Record Date" shall have the meaning assigned to it
in the preamble.
"Subject Shares" shall mean the class or series of shares
then issuable on exercise of the Rights.
"Stock Acquisition Date" shall mean the date of the first
public announcement by the Company or an Acquiring Person (which,
for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) that an Acquiring Person has become such.
"Subsidiary" shall mean, with respect to any Person, a
corporation or other entity the securities or other ownership
interests of which having ordinary voting power sufficient to
elect a majority of the board of directors or other persons
performing similar functions are at the time directly or
indirectly owned by such Person and any Affiliate of such Person.
"Substantial Block" shall mean a number of shares of
Voting Stock having in the aggregate 20 percent or more of the
general voting power.
"Trading Day" shall have the meaning assigned to it in
Section 11(d).
"Unit" shall mean the shares or other securities issuable
upon exercise of one Right, initially one one-hundredth of a
share of Junior Participating Preference Stock of the Company
having the rights and preferences set forth in Exhibit C, before
any adjustment pursuant to Section 11(a)(ii) or Section 13.
"Voting Stock" shall mean shares of the Company's capital
stock the holders of which have general voting power.
(b) For purposes of this Agreement, a Person shall be deemed the
"Beneficial Owner" of any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, (whether or not in writing)
or upon the exercise of any conversion, exchange or purchase rights
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(other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for payment or exchange; or
(B) the right to vote or to direct the voting of, pursuant to any
agreement, arrangement or understanding (whether or not in writing); or
(C) the right to dispose or to direct the disposition of, pursuant to
any agreement, arrangement or understanding (whether or not in writing);
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing
of any securities of the Company;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from the grant of a revocable proxy or
consent given to such Person in connection with 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 (or any comparable or successor report) under the Exchange Act;
provided, further, that a Person engaged in business as an underwriter of
securities shall not be deemed the "Beneficial Owner" of securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of the 40-day period immediately following the
date of such acquisition.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights 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 Agent or Agents as it may deem necessary or desirable and determine
the respective duties of the Rights Agent and the Co-Rights Agents.
Section 3. Issuance of Right Certificates.
(a) Until the Close of Business on the earlier of (i) the tenth
Business Day after a Stock Acquisition Date or (ii) the tenth Business Day (or
such later date as the Company's Board of Directors shall determine) after the
date of the commencement by any Person (other than an Exempt Person) of, or the
date of the first public announcement (such commencement date or announcement
date being herein referred to as the "Offer Date") of the intent of any Person
(other than an Exempt Person) to commence, a tender or exchange offer upon the
successful consummation of which such Person, together with its Affiliates and
Associates, would be the Beneficial Owner of 20 percent or more of the then
outstanding Voting Stock (irrespective of whether any shares are actually
purchased pursuant to such offer) (the tenth Business Day after the first to
occur of a Stock Acquisition Date or an Offer Date being herein referred to as
the "Distribution Date"),
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(i) the Rights will automatically attach to, and be
evidenced by, the certificates for Common Stock registered in the names
of the holders of Common Stock (which certificates for Common Stock
shall be deemed also to be Right Certificates) and not by separate Right
Certificates, and
(ii) each Right will be transferable only in connection
with the transfer of the underlying shares of Common Stock.
As soon as practicable after the Distribution Date, the Rights
Agent will mail, by first-class, insured, postage prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date, as
shown by the records of the Company at the Close of Business on the Distribution
Date, at the address of such holder shown on such records, a Right Certificate,
in substantially the form of Exhibit A hereto, evidencing one Right for each
share of Common Stock so held.
(b) As soon as practicable after the Rights Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B, by first-class mail, postage prepaid, to each
record holder of Common Stock as of the Close of Business on the Rights Record
Date, at the address of such holder shown on the records of the Company.
(c) The Company will cause certificates for Common Stock issued
after the Rights Record Date (including replacement certificates for shares of
Common Stock outstanding on or prior to the Rights Record Date), but prior to
the earliest of (i) the Distribution Date, (ii) the Expiration Date and (iii)
the date, if any, on which the Rights may be redeemed, to have impressed on,
printed on, written on or otherwise affixed to them the following legend:
This certificate also entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between the Company
and Xxxxxx Trust Company of California, as Rights Agent, as the
same shall be amended from time to time (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive offices
of the Company. 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.
The Company will mail to the holder of this certificate a copy of
the Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement) or certain transferees of any thereof, whether
currently held by or on behalf of such Person or by any
subsequent holder, may be limited as provided in Section 7(f) of
the Rights Agreement.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with Common Stock represented by such
certificates shall be evidenced by
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such certificates alone, and the surrender for transfer of any such certificates
shall also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
(d) Until the Distribution Date, the surrender for transfer of
any of the certificates for Common Stock outstanding on or after the Rights
Record Date, with or without a copy of the Summary of Rights attached thereto
and with or without the legend set forth in subsection (c) above, shall also
constitute the transfer of the Rights associated with such Common Stock. After
the Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of assignment and
certification and of election to purchase shares to be printed on the reverse
thereof) shall be in substantially the form of Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights may from time
to time be listed, or to conform to usage.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 that represents Rights Beneficially Owned by: (i) an Acquiring Person
or any Associate or Affiliate of any Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding 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 which has as a
primary purpose or effect avoidance of Section 7(f), and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible and reasonably identifiable as such) the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement) or certain transferees thereof.
Accordingly, under certain circumstances as provided in the Rights
Agreement, this Right Certificate and the Rights represented hereby may
be limited as provided in Section 7(f) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its President or any of its Vice Presidents, either manually or by
facsimile signature, and have
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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 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,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer (as specified above) of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each Right Certificate, the date of each Right Certificate and
the number 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 Section 4(b), Section 7(f) and
Section 14, at any time after the Close of Business on the Distribution Date,
and prior to the Close of Business on the Expiration Date or the day prior to
the day, if any, on which the Rights are to be redeemed pursuant to Section 23,
any Right Certificate or Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase such number of Units 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(s) to be transferred, split up,
combined or exchanged, with the form of assignment on the reverse side(s)
thereof duly completed and executed, at the stock transfer office of the Rights
Agent. Thereupon the Rights Agent shall countersign and deliver to the persons
entitled thereto the Right Certificate(s) requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates. Notwithstanding the foregoing, 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 of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(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 indemnity or
security reasonably satisfactory to them,
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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 execute and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(f), and unless earlier redeemed as
provided in Section 23, 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 on the reverse side thereof duly completed and executed, to
the Rights Agent at the stock transfer office of the Rights Agent, together with
payment of the Purchase Price for each Unit as to which the Rights are
exercised, at or prior to the Close of Business on the tenth anniversary of the
Rights Record Date or such other date to which the Rights may be extended as
provided in this Agreement (the latest of such dates being herein referred to as
the "Expiration Date"). If at any time after the Distribution Date but prior to
the Expiration Date the Company is unable, under its Articles of Incorporation,
to issue the number and class of shares required to be issued upon the exercise
of all of the outstanding Rights, the Company may issue upon exercise of any of
the Rights shares of capital stock or other securities of the Company of
equivalent value to the shares so required to be issued ("Equivalent Stock"), as
determined by the Board of Directors.
(b) The Purchase Price for each Unit pursuant to the exercise of
a Right shall initially be $45.00, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 and shall be payable in lawful money of
the United States of America.
(c) Upon receipt of a Right Certificate, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price
for the Units to be purchased and an amount equal to any applicable transfer tax
in cash, or by certified check, bank draft or money order payable to the order
of the Company, the Rights Agent shall thereupon promptly (i) requisition from
the Company or any transfer agent of the Company a certificate for the number of
shares to be purchased and the Company will comply, and hereby irrevocably
authorizes its transfer agent to comply, with all such requests, (ii)
requisition from the Company the amount of cash to be paid in lieu of issuance
of a fractional share, when appropriate, in accordance with Section 14, and
(iii) promptly after receipt of such certificate from any such transfer agent,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated by
such holder, and, when appropriate, after receipt promptly deliver such cash in
lieu of a fractional share to or upon the order of the registered holder of such
Right Certificate; provided, however, that in the case of the purchase, in
connection with the exercise of a Right, of securities other than shares of
stock, the Rights Agent shall promptly take the appropriate actions with respect
thereto as shall as nearly as practicable correspond to the actions described in
the foregoing clauses (i) through (iii).
(d) The Company shall not be required to pay any transfer tax
which may be payable in respect of any transfer involved in the transfer or
delivery of Right Certificates, or the
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issuance or delivery of certificates 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 upon the exercise of any Rights, until any
such tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
(e) 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 Section 14.
(f) Notwithstanding any provision of this Agreement to the
contrary, upon the occurrence of any of the events described in any of clauses
(A), (B), (C) or (D) of Section 11(a)(ii), the adjustment provided for under
Section 11(a)(ii) shall not apply with respect to any Rights that are at the
time of the occurrence of such event Beneficially Owned by (i) an Acquiring
Person or by any Associate or Affiliate of such Acquiring Person (which
Acquiring Person or Affiliate or Associate engages in, or realizes the benefit
of, one or more of the transactions described in clause (A) or clause (B) of
Section 11(a)(ii), realizes the benefits set forth in clause (C) of Section
11(a)(ii) or, alone or together, become the Beneficial Owner(s) of a number of
shares of Voting Stock which equals or exceeds the percentage of the general
voting power as provided in clause (D) of Section 11(a)(ii), as the case may
be), or (ii) a transferee of an Acquiring Person or of any Associate or
Affiliate of such Acquiring Person (which Acquiring Person or Associate or
Affiliate engages in, or realizes the benefit of, one or more of the
transactions described in clause (A) or clause (B) of Section 11(a)(ii),
realizes the benefits set forth in clause (C) of Section 11(a)(ii) or, alone or
together with such Acquiring Person or any such Associate or Affiliate, become
the Beneficial Owner(s) of a number of shares of Voting Stock which equals or
exceeds the percentage of the general voting power as provided in clause (D) of
Section 11(a)(ii), as the case may be) (A) who becomes a transferee after the
Acquiring Person becomes such, or (B) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (1) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (2) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(f). Upon the exercise of such Rights, the holders
thereof shall be entitled to receive, upon payment of the Purchase Price, the
number of Units issuable upon exercise of such Rights without giving effect to
the adjustment provided for under Section 11(a)(ii). The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(f) and
Section 4(b) are complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its making or failing to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(g) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the
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form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by this 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 can-celled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares; Registration.
(a) The Company covenants and agrees that it shall (i) on or
prior to the Rights Record Date, take all such action as shall be necessary to
cause to be reserved and kept available out of its authorized and unissued
capital stock, the number, class and series of shares that will be sufficient to
permit the exercise in full of all Rights to be outstanding as of the Rights
Record Date, (ii) no later than promptly following the Distribution Date, take
all such action as shall be necessary to cause to be reserved and kept available
out of its authorized and unissued capital stock, the number of additional
shares that will, from time to time, be sufficient to permit the exercise in
full of all Rights from time to time outstanding, (iii) take all such action as
may be necessary to insure that all shares 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, and (iv) pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any shares upon the
exercise of Rights (except as otherwise provided in Section 7(d)).
(b) The Company agrees to take all such action, from and after
the Distribution Date, as may be necessary or appropriate to permit the issuance
of shares in connection with the exercise of the Rights, including any required
registration under (i) the Securities Act of 1933, as amended from time to time
(the "Securities Act"), and (ii) the securities or "blue sky" laws of the
various states and obtaining any necessary approvals of the California Public
Utilities Commission and any other governmental agency as shall be required by
law. The Company may temporarily suspend, for a period of time not to exceed 120
days, the exercisability of the Rights in order to prepare and file a
registration statement or statements for the purpose of effecting any such
registration and permit such statement(s) to become effective and to prepare and
file any application or applications for the purpose of obtaining any such
approvals and permit such approvals to be obtained. At the commencement and
termination of any such suspension, the Company shall issue a public
announcement and shall provide written
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notice to the Rights Agent, stating that the exercisability of the Rights has
been temporarily suspended, or that such suspension has terminated, as the case
may be.
(c) If and so long as the stock issuable upon the exercise of
Rights is listed on any national securities exchange, the Company shall use its
reasonable efforts to cause all shares reserved for issuance upon exercise of
Rights to be listed on such exchange upon official notice of issuance upon such
exercise.
Section 10. Record Date. Each Person in whose name any stock
certificate is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the shares represented thereby on,
and such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including without limitation the
right to vote or to receive dividends or other distributions, and such holder
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 shares or other
securities 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 and pay a dividend on the shares which are
subject to the Rights ("Subject Shares") payable in shares of stock of
the Company, (B) subdivide or split the Subject Shares, (C) combine or
consolidate the Subject Shares into a smaller number of shares or effect
a reverse stock split of the Subject Shares or (D) issue any shares of
its capital stock in a reclassification of the Subject Shares (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), then,
and in each such event, except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, split,
reverse split, combination, consolidation or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall
be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the transfer books of
the Company were open, he would have received upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, split,
reverse 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 at any time after the date of
this Agreement
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(A) any Acquiring Person, or any Associate or
Affiliate of any Acquiring Person, directly or indirectly (1)
shall merge into the Company or any of its Subsidiaries or
otherwise combine with the Company or any of its Subsidiaries and
the Company or such Subsidiary shall be the continuing or
surviving corporation of such merger or combination and the
Common Stock shall remain outstanding and the outstanding shares
thereof shall not be changed into or exchanged for stock or other
securities of the Company or of any other Person or cash or any
other property, or (2) shall sell or otherwise transfer in one or
more transactions, assets to the Company or any of its
Subsidiaries in exchange for 25 percent or more of the shares of
any class of capital stock of the Company or any of its
Subsidiaries, and the Common Stock shall remain outstanding and
unchanged, or
(B) directly or indirectly, any Acquiring Person,
or any Associate or Affiliate of any Acquiring Person, shall (1)
in one or more transactions, transfer any assets to the Company
or any of its Subsidiaries in exchange (in whole or in part) for
shares of any class of capital stock of the Company or any of its
Subsidiaries or for securities exercisable for or convertible
into shares of any class of capital stock of the Company or any
of its Subsidiaries or otherwise obtain from the Company or any
of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company or
any of its Subsidiaries or other securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as part of a pro
rata distribution by the Company or such Subsidiary to all
holders of Common Stock), (2) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one or more
transactions), to, from or with, as the case may be, the Company
or any of its Subsidiaries, assets on terms and conditions less
favorable to the Company or such Subsidiary than the Company or
such Subsidiary would be able to obtain in arm's-length
negotiation with an unaffiliated third party, (3) receive any
compensation from the Company or any of the Company's
Subsidiaries other than compensation for full-time employment as
a regular employee, or fees for serving as director, at rates in
accordance with the Company's (or its Subsidiaries') past
practices, or (4) receive the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance
provided by the Company or any of its Subsidiaries, on terms and
conditions less favorable to the Company or such Subsidiary than
the Company or such Subsidiary would be able to obtain in
arm's-length negotiation with an unaffiliated third party, or
(C) during any such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any
of its Subsidiaries or any other similar transaction or series of
transactions involving the Company or any of its Subsidiaries
(whether or not with or into or otherwise involving an Acquiring
Person or any Affiliate or Associate of such Acquiring Person)
which has the effect, directly or indirectly, of increasing by
more than one percent the proportionate share of the outstanding
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shares of any class of equity securities, or of securities
exercisable for or convertible into equity securities, of the
Company or any of its Subsidiaries which is directly or
indirectly owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person
otherwise than pursuant to a Qualified Offer,
then, and in each such case, but subject to the provisions of Section 27, proper
provision shall be made so that each holder of a Right, except as provided below
and in Section 7(f), shall, on and after the later of (I) the date of the
occurrence of an event described in clause (A), (B), (C) or (D) of this Section
11(a)(ii), or (II) the date of the expiration of the period within which the
Rights may be redeemed pursuant to Section 23 (as the same may have been amended
as provided in Section 26), have the right to receive, upon exercise thereof at
the then current Purchase Price, such number of shares of Common Stock as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the then number of Units for which a Right is then exercisable and dividing that
product by (y) 50 percent of the current market price per share of Common Stock
(determined in accordance with Section 11(d)) on the date of the occurrence of
the relevant event listed above in clause (A), (B), (C) or (D) of this
subparagraph (ii); provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13, then only the provisions of Section 13 shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii). The Company
shall not consummate any such merger, combination, transfer or transaction
referred to in any of such clauses (A), (B) and (C) unless prior thereto there
shall be sufficient authorized but unissued Common Stock to permit the exercise
in full of the Rights in accordance with the foregoing sentence, unless the
Board of Directors has determined to issue Equivalent Stock in accordance with
Section 7(a); provided, however, that in no case may the Company consummate any
such merger, combination, transfer or transaction if at the time of or
immediately after such transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
In the event that the Company issues Equivalent Stock upon the
exercise of any Rights pursuant to the immediately preceding paragraph, then,
upon any such exercise, proper provision shall be made so that the holder of a
Right (except as provided in Section 7(f)) shall have the right to receive, upon
such exercise at the then current Purchase Price, such number of shares or other
units of Equivalent Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of Units for which
a Right is then exercisable and dividing that product by (y) 50 percent of the
current market price per share or other unit of the Equivalent Stock of the
Company (determined on substantially the same basis as is prescribed by Section
11(d) with respect to the valuation of Common Stock) on the date of occurrence
of the relevant event listed above in clause (A), (B), (C) or (D) of this
subparagraph (ii). In the event that at any time the Company should be
prohibited by law, by any provision of its Articles of Incorporation, or by any
instrument or agreement to which the Company is a party or by which it is bound,
from issuing, or should be unable under its Articles of Incorporation to issue,
sufficient Equivalent Stock to permit the exercise of all outstanding Rights in
accordance
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with the foregoing sentence, then, in lieu of issuing such Equivalent
Stock upon such exercise, the Company shall pay to each holder of a Right
(except as provided in Section 7(f)) upon surrender of the Right as provided
herein but without payment of the Purchase Price, an amount in cash for each
Right equal to the Purchase Price.
(b) In case the Company shall at any time after the Rights Record
Date fix a record date for the issuance of rights or warrants to all holders of
Common Stock or Subject Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Common Stock
or Subject Shares or securities convertible into Common Stock or Subject Shares
at a price per share (or having a conversion price per share, if a security
convertible into Common Stock) less than the current market price per share
(determined in accordance with Section 11(d)) 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 total number of shares of Common
Stock and Subject Shares outstanding on such record date plus the number of
shares of Common Stock which the aggregate offering price of the total number of
shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and of which the denominator shall be the total number of shares of Common
Stock and Subject Shares outstanding on such record date plus the number of
additional shares to be offered for subscription or purchase (or into which the
convertible securities to be offered are initially convertible). In case such
subscription or purchase price may be paid, in whole or in part, 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. Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights 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 at any time after the Rights Record
Date fix a record date for the making of a distribution on the shares of Common
Stock or the Subject Shares, whether by way of a dividend, distribution,
reclassification of stock, recapitalization, reorganization or partial
liquidation of the Company or otherwise (and including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation), of subscription rights or warrants (excluding those
referred to in Section 11(b)), evidences of indebtedness or other assets (other
than (i) regular periodic cash dividends, (ii) a dividend payable in Common
Stock or (iii) a distribution which is part of or is made in connection with a
transaction to which Section 11(a)(ii) or Section 13 applies), 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 current market price per share of
Common Stock (determined in accordance with Section 11(d)) on such record date,
less the fair market value applicable to one share of Common Stock (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
such assets or evidences of indebtedness or of such subscription rights or
warrants so to be distributed, and of which the denominator shall be such
current market price per share of Common Stock. Such adjustments
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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) For the purpose of any computation hereunder, the "current
market price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; provided, however, that
in the event that the current market price per share of Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of Common
Stock (other than the Rights), and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, then, and in each
such case, the current market price shall be appropriately adjusted to reflect
the current market price per share of Common Stock in connection with
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc., Automated Quotation System ("NASDAQ").
If on any such date the shares of Common Stock are not quoted by any such
organization, the fair market value of such shares on such date as determined in
good faith by the Board of Directors of the issuer of such Common Stock shall be
used. Any such determination of current market price shall be described in a
statement filed with the Rights Agent.
For the purpose of any computation hereunder, the "current market
price" of a Unit shall be deemed to be equal to the current market price per
share of Common Stock, and the "current market price" of a Subject Share shall
be deemed to be equal to the current market price per share of Common Stock
divided by the number of Subject Shares which comprise a Unit.
For purposes of this Agreement, the term "Trading Day" shall mean
a day on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent 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-hundredth of a share,
as the case may be. Notwithstanding the proviso to 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
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from the date of the transaction which gives rise to such adjustment or (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 shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions, with respect to such shares, contained in Sections 11(a) through
(c), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the shares of Common Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall represent the right to
purchase, at the adjusted Purchase Price, the number of shares purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest one-hundredth) obtained by (i) multiplying (x)
the number of shares 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, in substitution for any
adjustment in the number of shares purchasable upon the exercise of each Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of Units for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-hundredth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i) the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14, the additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights
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to which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) In any case in which this Section 11 requires that an
adjustment in the Purchase Price be made effective as of the record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the additional shares or securities of the Company, if any, issuable as a
consequence of 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 or securities upon the
occurrence of such event.
(l) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such adjustments in the number of shares
which may be acquired upon exercise of the Rights, and such adjustments in the
Purchase Price, in addition to those adjustments expressly required by the other
subsections of this Section 11, as and to the extent that the Company, in its
sole discretion, shall determine to be advisable, in order that, in the event of
(i) any reclassification, consolidation or subdivision of the Common Stock, (ii)
any reorganization or partial liquidation of the Company or similar transaction,
(iii) any issuance wholly for cash of any Common Stock at less than the current
market price, (iv) any issuance wholly for cash of Common Stock or securities
which by their terms are convertible into or exchangeable for Common Stock, (v)
any stock dividends or (vi) any issuance of rights, options or warrants,
hereafter made by the Company to holders of its Common Stock as provided herein
above in this Section 11, (x) the holders of the Rights in any such event shall
be treated equitably and in accordance with the purpose and intent of this
Agreement, and (y) to the extent reasonably possible, such event shall not, in
the opinion of counsel for the Company, result in the shareholders of the
Company being subject to any United States federal income tax liability by
reason thereof.
Section 12. Certification of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13, the
Company shall (i) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (ii) promptly
file with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate, and (iii) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of, or the force or effect of, the requirement for such
adjustment.
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Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, at any time after an Acquiring Person has
become such,
(i) the Company shall consolidate with, or merge with and
into, any other Person and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(ii) any other Person(s) shall consolidate or merge with
and into the Company, the Company shall be the continuing or surviving
corporation of such merger and, in connection with such consolidation or
merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of the Company or of any other
Person or cash or any other property, or
(iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating more than 50
percent of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person, (other than a pro
rata distribution by the Company of assets (including securities) of the
Company or any of its Subsidiaries to all holders of the Company's
Common Stock),
then, on and after the later of (I) the date of the occurrence of an event
described in clause (i), (ii) or (iii) of this Section 13(a), or (II) the date
of the expiration of the period within which the Rights may be redeemed pursuant
to Section 23 (as the same may have been amended as provided in Section 26):
(A) proper provision shall be made so that each
holder of a Right shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price,
such number of shares of common stock of the Principal Party as
shall be equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of Units for which a Right
is then exercisable and dividing that product by (y) 50 percent
of the current market price per share of the common stock of the
Principal Party (determined in the same manner as the current
market price of Common Stock is determined under Section 11(d))
on the date of consummation of such consolidation, merger, sale
or transfer;
(B) the Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger,
sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement, and proper provision shall be made
for the foregoing, provided that the Principal Party shall, prior
to the first occurrence of an event described in clause (i), (ii)
or (iii) of this Section 13(a), have caused to be reserved out of
its authorized and unissued shares of common stock (or its
authorized and issued shares of common stock held in its
treasury), for issuance pursuant to this Agreement, the number of
shares of common stock that will be sufficient to permit the
exercise in full of the Rights after the occurrence of such
event;
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(C) the term "Company" wherever used in this
Agreement shall thereafter be deemed to refer to such Principal
Party; and
(D) the Principal Party shall, in addition to the
reservation of shares of its common stock as provided in the
proviso to clause (B) above, take such steps (including without
limitation compliance with the Company's other obligations as set
forth in Section 9) in connection with such consummation as may
be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock thereafter deliverable
upon the exercise of the Rights; provided, however, that, upon
the subsequent occurrence of any merger, consolidation, sale of
all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary
transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have
been entitled to receive had such holder, at the time of such
transaction, owned the shares of common stock of the Principal
Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited
to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other
property.
(b) For purposes of this Agreement, "Principal Party" shall mean
(i) in the case of any transaction described in clause (i)
or (ii) of Section 13(a), (A) the Person that is the issuer of the
securities into which shares of Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the
issuer the common stock of which has the greatest market value, or (B)
if no securities are so issued, (x) the Person that is the other party
to the merger or consolidation and that survives said merger or
consolidation, or, if there is more than one such Person, the Person the
common stock of which has the greatest market value or (y) if the Person
that is the other party to the merger or consolidation does not survive
the merger or consolidation, the Person that does so survive (including
the Company if it survives); and
(ii) in the case of any transaction described in clause
(iii) of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets
or earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever
of such Persons is the issuer of common stock having the greatest market
value of shares outstanding;
provided, however, that in any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section
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12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another corporation the common stock of which is and has been so registered,
"Principal Party" shall refer to such other corporation; (2) if the common stock
of such Person is not and has not been so registered and such Person is not a
direct or indirect Subsidiary of another corporation the common stock of which
is and has been so registered, "Principal Party" shall refer to the corporation
which ultimately controls such Person; (3) in case such Person is a Subsidiary,
directly or indirectly, of more than one corporation, the common stocks of all
of which are and have been so registered, "Principal Party" shall refer to
whichever of such corporations is the issuer of common stock having the greatest
market value of shares held by the public; and (4) if the common stock of such
Person is not and has not been so registered and such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
clauses (1), (2) and (3) above shall apply to each of the chains of ownership
having an interest in such joint venture as if such Person were a "Subsidiary"
of both or all of such joint ventures and the Principal Party in each such chain
shall bear the obligations set forth in this Section 13 in the same ratio as its
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 prior thereto the Company and the Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement making valid provision for the results described in clause (A) of
Section 13(a) and confirming that the Principal Party will perform its
obligations under this Section 13(a); provided, however, that in no case may the
Company consummate any such consolidation, merger, sale or transfer if (i) at
the time of or immediately after such transaction there are any rights, warrants
or other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (ii) prior to, simultaneously with or immediately
after such transaction, the shareholders of the Person which constitutes, or
would constitute, the Principal Party for purposes of this Section 13 shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. This Section
13 shall not be applicable to a transaction described in Subparagraphs (i), (ii)
or (iii) of Subsection (a) of this Section if (i) such transaction is
consummated with a Person or Persons who acquired Common Stock pursuant to a
Qualified Offer (or a wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such transaction or
distributable to shareholders upon conclusion of 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 Qualified Offer and (iii) the form
of consideration being offered to the remaining holders of Common Stock pursuant
to such transaction or distributable to shareholders upon conclusion of such
transaction is the same as the form of consideration paid pursuant to such
Qualified Offer. Upon conclusion of any transaction described in the foregoing
sentence, all Rights shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. If
the Company shall elect not to
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issue such fractional Rights, in lieu of such fractional Rights, there shall be
paid to the registered holders of the Right Certificates with regard to which
such Fractional Rights would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ. If on any such
date the Rights are not quoted by any such organization, 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. Any such determination of current market value shall be
described in a statement filed with the Rights Agent.
(b) The Company shall not be required to issue fractions of
shares upon exercise of a Right or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall pay to the
registered holders of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of a share of Common Stock. For purposes of this Section
14, the current market value of a 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)) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and prior to the Distribution Date, the registered holders of the
Common Stock), and any registered holder of any Right Certificate (or, prior to
the Distribution Date, any registered holder 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 other registered 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.
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Section 16. Agreement of Right Holders. Every holder of a Right
by accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) on and after the Distribution Date, the Right Certificates
will be transferable only on the registry books of the Rights Agent and then if
surrendered at the stock transfer office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common 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.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense incurred, without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or Certificate for Common Stock or for other
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securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it, acting with
reasonable care, to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
If and for so long as the Rights are listed on the New York Stock
Exchange or the American Stock Exchange, the Rights Agent, if its principal
offices are located outside New York City, shall maintain in the New York City
area facilities for the servicing of the Rights in the area of Manhattan located
south of Xxxxxxxx Street. Such facilities may consist of either an office or
agency where transactions in the Rights are serviced directly or a "drop" where
Common Stock certificates, Right Certificates, and other instruments relating to
transactions in Rights may be received for redelivery to an office or agency
outside New York City, all in accordance with the applicable rules of the stock
exchange on which the Rights are listed.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned,
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned, and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name, and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete
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authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the President, any Vice President, or the
Secretary of the Company and delivered to the Rights Agent, and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof), nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate,
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or 13 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment), nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performance 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
President, any Vice President or the Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or
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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 resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised 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 clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first obtaining the Company's approval.
Section 21. Change of Rights Agent. Unless the Company and the
Rights Agent agree to a shorter time period, the Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 15 days' notice in writing mailed to the Company and to each transfer agent
of Common Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. Unless the Company and the Rights Agent agree
to a shorter time period, the Company may remove the Rights Agent or any
successor Rights Agent upon 15 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of 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 15 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state of the United States in good standing, which is authorized under
such laws to exercise 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
$100,000,000. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed, but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
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
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not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Expiration Date, the Purchase Price per share or 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.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option and
as provided herein, and notwithstanding the provisions of Sections 11 and 13 of
this Agreement, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or similar
transaction occurring after the date hereof (such redemption price being herein
referred to as the "Redemption Price") at any time up to the Close of Business
on a Stock Acquisition Date.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make a public
announcement thereof, and from and after the date of such announcement, without
any further action and without any further 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. As soon as practicable after the
election of the Board of Directors to redeem the Rights, the Company shall give
notice of such redemption to 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. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Notice of Proposed Actions. In case the Company,
after the Rights become exercisable, shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Common Stock or the Subject
Shares or to make any other distribution to the holders of its Common Stock or
Subject Shares (other than a regular periodic cash dividend), or (ii) to offer
to the holders of its Common Stock or Subject Shares rights or warrants to
subscribe for or to purchase any additional shares of Common Stock or shares of
stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Common Stock or Subject Shares (other than a
reclassification involving only the subdivision of outstanding shares of Common
Stock) or any recapitalization or reorganization of the Company, or (iv) to
effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of more than 50 percent of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person, or (v) 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 25, a notice of such proposed
action, which shall specify the record date for the purposes of such dividend,
distribution of rights or warrants, or the date on which such
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reclassification, recapitalization, reorganization, 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 Subject 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 (i) or (ii) above at least twenty days prior to
the record date for determining holders of the Common Stock and/or Subject
Shares 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 Subject
Shares, whichever shall be the earlier. The failure to give notice required by
this Section 24 or any defect thereon shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.
Section 25. 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:
Xxxxxx Trust Company of California
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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:
Southwest Gas Corporation
0000 Xxxxxx Xxxxxxxx Xxxx
X.X. Xxx 00000
Xxx Xxxxx, Xxxxxx 00000-0000
Attention: Chief Financial Officer
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereof in any manner which the Company may deem
necessary or
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desirable and which shall not adversely affect the interests of the holders
of Right Certificates; provided, however, this Agreement may not be supplemented
or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period, unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of, and/or
the benefits to, the holders of Rights. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary: (1) no supplement or amendment
shall be made which changes the Redemption Price, the Purchase Price or the
number of shares or Units for which a Right is exercisable; and (2) the duration
of the Rights may not be shortened without the written consent of the registered
holders thereof (other than by a redemption of the Rights pursuant to Section
23). Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Stock.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become subject to the provisions of Section 7(f) hereof) for Common Stock
at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become subject to the provisions of
Section 7(f) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient authorized
Common Stock to permit an exchange of Rights as contemplated in accordance with
this Section, the Company shall take all such action as may be necessary to
authorize additional Common Stock or Equivalent Stock for issuance upon exchange
of the Rights.
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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. Determination and Actions Taken by the Board of
Directors. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock (or other applicable securities hereunder) outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock (or 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) (as in effect on the date of this
Agreement) of the General Rules and Regulations under the Exchange Act. 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 such Board 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 a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (B) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (A) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (B) not subject the Board to
any liability to the holders of the Rights.
Section 30. Conditions to the Agreement. The effectiveness of
this Agreement and each and every right and obligation obtained or incurred
pursuant hereto, including, but not limited to, the exercisability of the
Rights, is conditioned upon (a) the Company having received all necessary
approvals and consents from all local, state and federal regulatory authorities
having jurisdiction over the Company and the transactions contemplated by this
Agreement and (b) the absence of any statute, rule, regulation, injunction or
other order (whether temporary, preliminary or permanent) enacted, issued,
promulgated, enforced or entered into by any United States, state or local
legislative body, governmental agency or commission or court of competent
jurisdiction which is in effect and has the effect of making the distribution or
exercise of the Rights illegal or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement.
Section 31. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock) any legal or equitable right,
remedy or claim under this Agreement. This Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the holders of
Common Stock).
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 California 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. The rights and obligations of
the Rights Agent under this Agreement shall be governed by and construed in
accordance with the laws in effect in the State of California.
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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. Section 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.
Section 35. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, illegal, or unenforceable, (i) such invalid,
illegal or unenforceable term, provision, covenant or restriction shall
nevertheless be valid, legal and enforceable to the extent, if any, provided by
such court or authority, and (ii) the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
SOUTHWEST GAS CORPORATION:
By: /s/ Xxxxxxx X. Xxxx
-------------------
Title: Vice President/Treasurer
XXXXXX TRUST COMPANY OF CALIFORNIA:
By: /s/ Xxxx X. Xxxxxxxxxxx
-----------------------
Title: Assistant Vice President
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Exhibit A
---------
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF
REDEMPTION IS MADE. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE
AGREEMENT. IN THE EVENT THAT THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES
THEREOF, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN
LIMITATIONS IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
This certifies that _______________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Amended And Restated Rights Agreement, dated as of ______________, 1998 (the
"Rights Agreement"), between Southwest Gas Corporation, (the "Company"), and
Xxxxxx Trust Company of California (the "Rights Agent"), to purchase from the
Company, unless the Rights have been previously redeemed, at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
the Expiration Date (as such term is defined in the Rights Agreement), or the
date, if any, on which the Rights evidenced by this Certificate may be redeemed,
at the stock transfer office of the Rights Agent, or its successors as Rights
Agent, one one-hundredth of a fully paid and nonassessable share of Junior
Participating Preference Stock ("Preference Shares"), at a purchase price of
$45.00 (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly completed and executed.
The number of Rights evidenced by this Right Certificate as set forth above (and
the number of shares which may be purchased upon exercise thereof), and the
Purchase Price set forth above, are the number and Purchase Price as of the date
of the Rights Agreement based on the Preference Shares as constituted on such
date.
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Upon the occurrence of an event described in clause (A), (B), (C)
or (D) of Section 11(a)(ii) of the Rights Agreement, the holder of any Rights
that are, or were, beneficially owned by an Acquiring Person or an Associate or
Affiliate thereof (as such terms are defined in the Rights Agreement) or certain
transferees thereof which engaged in, or realized the benefit of, an event or
transaction or transactions described in clause (A), (B), (C) or (D) of such
Section 11(a)(ii), shall not be entitled to the benefit of the adjustment
described in such Section 11(a)(ii).
As provided in the Rights Agreement, the Purchase Price and the
number and class of shares 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.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and at the principal office of the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the stock transfer office of the Rights Agent set forth above,
may be exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase such number of
shares as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right.
No fractional shares will be issued upon the exercise of any
Rights evidenced hereby, but in lieu thereof a cash payment may be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (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.
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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 signatures of the proper officers of the
Company.
Dated as of ____________, ____.
SOUTHWEST GAS CORPORATION
By: _________________________
Title:
Countersigned:
XXXXXX TRUST COMPANY OF
CALIFORNIA By: _________________________
By: _______________________
Authorized Signature
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[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
Corporation, with full power of substitution.
Dated: ____________, ____ ______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best knowledge of the undersigned) 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 an Acquiring Person (as such terms are defined in
the Rights Agreement);
(2) the undersigned [ ] 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.
Date: ______________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Southwest Gas Corporation and [Rights Agent]:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate and to purchase
the shares issuable upon the exercise of such Rights and requests that
certificates for such shares 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 must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
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CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best knowledge of the undersigned) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) the undersigned [ ] 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.
Date: ______________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
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EXHIBIT B
[Form of Summary of Rights]
On March 5, 1996, the Board of Directors of Southwest Gas
Corporation (the "Company") declared a distribution of one Right for each
outstanding share of common stock (the "Common Stock") of the Company. The
distribution is to be made as of April 15, 1996 (the "Record Date") to the
shareholders of record on that date. Each Right entitles the registered holder
to purchase from the Company, initially, one one-hundredth of a share of Junior
Participating Preference Stock ("Preference Stock") at a price of $45.00 (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement between the Company and Xxxxxx Trust
Company of California, as Rights Agent.
Shares of Preference Stock purchasable upon exercise of the
Rights will be entitled to dividends of 100 times the dividends, per share,
declared on shares of the Common Stock and in the event of liquidation will be
entitled to a minimum preferential liquidating distribution of $100 per share
and an aggregate liquidating distribution, per share, of 100 times the
distribution made per share of Common Stock. In the event no dividends are
declared on shares of Common Stock, holders of Preference Stock will be entitled
to receive at least $1.00 per share of Common Stock for each quarter that a
dividend is not declared on shares of Common Stock. The holders of Preference
Stock will vote together with holders of Common Stock and in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preference Stock will be entitled to receive 100 times
the amount received per each share of Common Stock.
Because of the Preference Stock' dividend and liquidation rights,
the value when issued of the one one-hundredth interest in a share of Preference
Stock purchasable upon exercise of each Right should approximate the value of
one share of Common Stock.
Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 20% or more of the
Company's general voting power other than pursuant to a Qualified Offer (as
defined below), the date of such public announcement being called the "Stock
Acquisition Date," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the Company's general voting power (the date of such
earlier occurrence being called the "Distribution Date"), the Rights will be
evidenced by the certificates representing the Common Stock and 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 shares of Common
Stock will contain a notation incorporating the Rights Agreement by reference,
and the surrender for transfer of any certificate for shares of Common Stock,
even without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate. As soon as
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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 Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the tenth anniversary of the Record Date (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other
securities or property issuable upon exercise of the Rights, and the number of
outstanding Rights, are subject to adjustment from time to time to prevent
dilution.
A Qualified Offer is a tender offer or exchange offer for all
outstanding shares of Common Stock which is determined by the non-affiliated
directors to be adequate and otherwise in the best interests of the Company and
its shareholders.
In the event that any person becomes an Acquiring Person other
than by a purchase pursuant to a Qualified Offer, proper provision shall be made
so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will not be entitled to the benefit of such adjustment)
will thereafter have the right to receive upon exercise that number of shares of
Common Stock or Common Stock equivalents having a market value of two times the
exercise price of the Right.
In the event that, at any time after an Acquiring Person has
become such, the Company is acquired in a merger or other business combination
transaction (other than a merger which follows a Qualified Offer at the same or
a higher price) or 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
At any time after an Acquiring Person has become such, the Board
of Directors of the Company may exchange the Rights (other than Rights owned by
such person or group), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
Up to and including the tenth business day after a Stock
Acquisition Date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon any redemption of the Rights, the right to exercise them will
terminate and the only right of the holders will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which do
not adversely affect the interests of the
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holders of the Rights, or which shorten or lengthen time periods, subject to
certain limitations set forth in the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, but, not limited to,
the right to vote or to receive dividends. The exercise of the Rights is subject
to compliance with applicable legal and regulatory requirements, including,
approval of the California Public Utilities Commission.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a registration statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
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