EXHIBIT 4.1
WPS RESOURCES CORPORATION
and
FIRSTAR TRUST COMPANY
Rights Agent
________________
Rights Agreement
Dated as of December 12, 1996
PAGE
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . 3
Section 3. Issue of Right Certificates . . . . . . . . . . 4
Section 4. Form of Right Certificates. . . . . . . . . . . 5
Section 5. Countersignature and Registration . . . . . . . 6
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates . . . . . . . 6
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . 7
Section 8. Cancellation and Destruction of Right
Certificates. . . . . . . . . . . . . . . . . . 8
Section 9. Reservation and Availability of Common Shares . 8
Section 10. Common Shares Record Date . . . . . . . . . . . 9
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. . . . . . . . . . . 9
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. . . . . . . . . . . . . . . . 15
Section 13. Consolidation, Merger, Share Exchange or Sale
or Transfer of Assets or Earning Power. . . . . 15
Section 14. Fractional Rights and Fractional Shares . . . . 17
Section 15. Rights of Action. . . . . . . . . . . . . . . . 18
Section 16. Agreement of Right Holders. . . . . . . . . . . 18
Section 17. Right Certificate Holder Not Deemed a
Shareholder . . . . . . . . . . . . . . . . . . 18
Section 18. Concerning the Rights Agent . . . . . . . . . . 19
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . . . 19
Section 20. Duties of Rights Agent. . . . . . . . . . . . . 00
-x-
Xxxxxxx 00. Change of Rights Agent. . . . . . . . . . . . . 21
Section 22. Issuance of New Right Certificates. . . . . . . 22
Section 23. Redemption. . . . . . . . . . . . . . . . . . . 22
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . 22
Section 25. Notice of Certain Events. . . . . . . . . . . . 23
Section 26. Notices . . . . . . . . . . . . . . . . . . . . 24
Section 27. Supplements and Amendments. . . . . . . . . . . 25
Section 28. Successors. . . . . . . . . . . . . . . . . . . 25
Section 29. Benefits of this Agreement. . . . . . . . . . . 25
Section 30. Severability. . . . . . . . . . . . . . . . . . 25
Section 31. Governing Law . . . . . . . . . . . . . . . . . 25
Section 32. Counterparts. . . . . . . . . . . . . . . . . . 26
Section 33. Descriptive Headings. . . . . . . . . . . . . . 26
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
-ii-
PAGE
RIGHTS AGREEMENT
----------------
This Agreement, dated as of December 12, 1996, between
WPS Resources Corporation, a Wisconsin corporation (the
"Company"), and Firstar Trust Company, a Wisconsin banking
corporation (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one common share purchase
right (a "Right") for each Common Share (as hereinafter defined)
of the Company outstanding on December 16, 1996 (the "Record
Date") payable on such date (the "Payment Date"), and has
authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined), each Right representing the right to
purchase one Common Share of the Company upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions. For purposes of
-------------------
this Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined)
of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Common Shares of the
Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or of any Subsidiary of
the Company, any entity holding Common Shares for or pursuant to
the terms of any such plan, or any trustee, administrator or
fiduciary of such a plan. Notwithstanding the foregoing,
(i) no Person who or which, at the close of
business on the date hereof, shall be the Beneficial
Owner of 15% or more of the Common Shares of the
Company then outstanding shall be deemed an "Acquiring
Person"; provided, however, that, subject to clause
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(ii) below, if a Person is, at the close of business on
the date hereof, the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding and
shall thereafter become the Beneficial Owner of
additional Common Shares of the Company at any time
that the Person is or thereby becomes the Beneficial
Owner of 15% or more of the Common Shares of the
Company then outstanding (other than Common Shares
acquired solely as a result of corporate action of the
Company not caused, directly or indirectly, by such
Person), then such Person shall be deemed to be an
"Acquiring Person"; and
(ii) no Person shall become an "Acquiring
Person" as a result of an acquisition of Common Shares
by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding;
provided, however, that if a Person would, but for the
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provisions of this clause (ii), become an Acquiring
Person by reason of share purchases by the Company and
shall, after such share purchases by the Company,
become the Beneficial Owner of any additional
Common Shares of the Company at any time that the
Person is or thereby becomes the Beneficial Owner of
15% or more of the Common Shares of the Company then
outstanding (other than Common Shares acquired solely
as a result of corporate action of the Company not
caused, directly or indirectly, by such Person), then
such Person shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would
otherwise be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable
a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes
of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as in effect on the
date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such
Person's Affiliates or Associates beneficially owns,
directly or indirectly;
(ii) which such Person or any of such
Person's Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed
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the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided,
--------
however, that a Person shall not be deemed the
-------
Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding
to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is
not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
or
(iii) which are beneficially owned,
directly or indirectly, by any other Person with which
such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with
respect to a bona fide public offering of securities)
for the purpose of, or with respect to, acquiring,
holding, voting
2
(except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities
of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's Beneficial
Ownership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the
number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in the
State of Wisconsin are authorized or obligated by law or
executive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., Milwaukee, Wisconsin time, on such date; provided,
--------
however, that if such date is not a Business Day it shall mean
-------
5:00 P.M., Milwaukee, Wisconsin time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $1.00,
of the Company, or shares having equivalent rights, privileges
and preferences to common stock. "Common Shares" when used with
reference to any Person other than the Company shall mean the
capital stock (or equivalent equity interest) with the greatest
voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(h) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(j) "Redemption Date" shall have the meaning set forth
in Section 7 hereof.
(k) "Shares Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) under the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such.
(l) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The
---------------------------
Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Shares of the Company) in accordance
with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or
desirable.
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Section 3. Issue of Right Certificates.
---------------------------
(a) Until the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth Business Day (or such
later date as may be determined by action of the Company's Board
of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement of, or of
the first public announcement of the intention of any Person to
commence, a tender or exchange offer the consummation of which
would result in any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, any entity holding
Common Shares for or pursuant to the terms of any such plan, or
any trustee, administrator, or fiduciary of such a plan) becoming
the Beneficial Owner of Common Shares of the Company aggregating
15% or more of the then outstanding Common Shares (the earlier of
such dates being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive
Right Certificates will be transferable only in connection with
the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder
of Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of
Exhibit A hereto (a "Right Certificate"), evidencing one Right
for each Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Payment Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
to Purchase Common Shares, in substantially the form of Exhibit B
hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof.
Until the Distribution Date (or the earlier of the Redemption
Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
4
(c) Certificates for Common Shares which become
outstanding (including, without limitation, certificates for
reacquired Common Shares referred to in the last sentence of this
paragraph (c) and certificates issued on the transfer of Common
Shares) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles
the holder hereof to certain rights as set
forth in a Rights Agreement between WPS
Resources Corporation and Firstar Trust
Company, dated as of December 12, 1996, and
as such agreement may be amended (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 WPS Resources
Corporation. 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. WPS Resources
Corporation 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, an
Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined
in the Rights Agreement), whether held by
such person or any subsequent holder, shall
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right
--------------------------
Certificates (and the forms of election to purchase Common Shares
and of assignment to be printed on the reverse thereof) shall be
substantially the same as 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
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Section 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase
such number of Common Shares as shall be set forth therein at the
price per Common Share set forth therein (the "Purchase Price"),
but the amount and type of securities purchasable upon exercise
of each Right and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Right Certificates shall be executed on behalf
of the Company by its Chairman of the Board, President or any
Vice President either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof,
and shall be attested by the Treasurer, an Assistant
5
Treasurer, 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 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 and issued and delivered
by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual
date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement
any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and
-----------------------------------
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
-------------------------------------------------------------
Stolen Right Certificates.
-------------------------
(a) Subject to the provisions of Section 14 hereof, at
any time after the close of business on the Distribution Date,
and at or prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section
24 hereof) may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling
the registered holder to purchase a like number of Common Shares
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
or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights
Agent. Thereupon the Rights Agent shall countersign and deliver
to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company
may require payment 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.
(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, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
6
Section 7. Exercise of Rights; Purchase Price;
-----------------------------------
Expiration Date of Rights.
-------------------------
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) 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
executed, to the Rights Agent at the principal office of the
Rights Agent, together with payment of the Purchase Price for
each Common Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on December
11, 2006 (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), and (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each Common Share pursuant
to the exercise of a Right shall initially be $85, shall be
subject to adjustment from time to time as provided in Sections
11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, as set forth
below, the Rights Agent shall thereupon promptly (i) requisition
from any transfer agent of the Common Shares certificates for the
number of Common Shares to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) after receipt
of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered
holder of such Right Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified check,
cashier's check, bank draft or money order payable to the order
of the Company, except that, if so provided by the Board of
Directors of the Company, the payment of the Purchase Price
following the occurrence of a Section 11(a)(ii) Event (as
hereinafter defined) and until the first occurrence of a Section
13 Event (as hereinafter defined) may be made wholly or in part
by delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing a
number of Common Shares of the Company equal to the then Purchase
Price divided by the closing price (as determined pursuant to
Section 11(d) hereof) per Common Share on the Trading Day (as
such term is hereinafter defined) immediately preceding the date
of such exercise. If the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make
all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section
14 hereof.
7
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to take any action with respect to a registered holder
of a Right Certificate upon the occurrence of any purported
transfer, assignment or exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed
the certificate following the form of assignment or election to
purchase set forth on the reverse of the Right Certificate
surrendered for such transfer, assignment or 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 any of the provisions of this
Rights Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Right Certificates
to the Company or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common
--------------------------------------
Shares.
------
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued Common Shares or any authorized and issued Common Shares
held in its treasury, the number of Common Shares that will be
sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7.
(b) So long as the Common Shares issuable upon the
exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all Common
Shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Common
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 shares (except as otherwise
provided by any corporation law applicable to the Company).
(d) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Common
Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates
for the Common Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any
certificates for Common Shares upon the exercise of any Rights
until any such tax shall have been paid (any such tax being
payable by the holder
8
of such Right Certificate at the time of surrender) or until it
has been established to the Company's reasonable satisfaction
that no such tax is due.
Section 10. Common Shares Record Date. Each person
-------------------------
in whose name any certificate for Common Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Common 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; provided, however, that if the date of
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such surrender and payment is a date upon which the Common Shares
transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day
on which the Common Shares transfer books of the Company are
open.
Section 11. Adjustment of Purchase Price, Number of
---------------------------------------
Shares or Number of Rights. The Purchase Price, the number of
--------------------------
Common Shares 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 a
dividend on the Common Shares payable in Common Shares,
(B) subdivide the outstanding Common Shares, (C)
combine the outstanding Common Shares into a smaller
number of Common Shares or (D) issue any shares of its
capital stock in a reclassification of the Common
Shares (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such
subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on
such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall
be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time
when the Common Shares transfer books of the Company
were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the
-------- -------
consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of
one Right. If an event occurs which would require an
adjustment under both 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) Subject to Section 24 of this Agreement,
in the event any Person shall become an Acquiring
Person, other than pursuant to any transaction set
forth in Section 13(a), each holder of a Right shall
thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase
Price multiplied by the number of Common Shares for
which a Right is then exercisable, in accordance with
the terms of this Agreement, such number of Common
Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase
Price by the number of Common Shares for which a Right
is then exercisable and dividing that product by (y)
50% of the
9
then current per share market price of the Company's
Common Shares (determined pursuant to Section
11(d)) on the date the Person became an Acquiring
Person (such number of shares, the "Adjustment
Shares").
From and after such time as a Person becomes an
Acquiring Person (a "Section 11(a)(ii) Event"), any
Rights that are or were acquired or beneficially owned
by such Acquiring Person (or any Associate or Affiliate
of such Acquiring Person) shall be void and any holder
of such Rights shall thereafter have no right to
exercise such Rights under any provision of this
Agreement. No Right Certificate shall be issued
pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any
Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be
cancelled. The Company shall use all reasonable
efforts to ensure that the provisions of this paragraph
are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a
result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(iii) In the event that there shall not
be sufficient Common Shares of the Company issued but
not outstanding or authorized but unissued (and not
reserved for issuance for purposes other than upon
exercise of the Rights) to permit the exercise in full
of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall: (A) determine the
excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3)
equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has
deemed to have the same value as Common Shares (such
shares of preferred stock, hereinafter referred to as
"common stock equivalents")), (4) debt securities of
the Company, (5) other assets or (6) any combination of
the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been
determined by the Board of Directors of the Company
based upon the advice of a nationally recognized
investment banking firm selected by the Board of
Directors of the Company; provided, however, if the
-------- -------
Company shall not have made adequate provision to
substitute for the Adjustment Shares pursuant to clause
(B) above within thirty (30) days following the
occurrence of a Section 11(a)(ii) Event (the "Section
11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available)
and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in
good faith that it is likely that sufficient additional
Common Shares might be authorized for issuance for
exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the
10
Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder approval for the
authorization of such additional shares (such period,
as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action
need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to the last paragraph of Section
11(a)(ii) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the
expiration of the Substitution Period to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall
issue a public announcement stating that the
exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current per share market
price (as determined pursuant to Section 11(d) hereof)
of the Common Shares on the Section 11(a)(ii) Trigger
Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common
Shares on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Common Shares or securities convertible into Common
Shares at a price per Common Share (or having a conversion price
per share, if a security convertible into Common Shares) less
than the then current per share market price of the Common Shares
(as defined in 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, the numerator of which shall be
the number of Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of
the total number of Common 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
the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional
Common Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
-------- -------
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Common
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, options or
warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of the Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend
payable in Common Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately
11
prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Common
Shares (as defined in Section 11(d)) on such record date, less
the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to one Common Share and the denominator of which shall be such
current per share market price of the Common Shares; provided,
--------
however, that in no event shall the consideration to be paid upon
-------
the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder,
the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided,
--------
however, that in the event that the current per share
-------
market price of the Security is determined during a
period following the announcement by the issuer of such
Security of (i) a dividend or distribution on such
Security payable in shares of such Security or
securities convertible into such shares, or (ii) any
subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such
case, the current per share market price shall be
appropriately adjusted to reflect the current market
price per share equivalent of such Security. The
closing price for each Trading 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
Securities 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 Security is listed or
admitted to trading or, if the Security is not listed
or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq") or such other system then
in use, or, if on any such date the Security is not
quoted by any such organization, the average of the
closing bid and asked prices as furnished by a
professional market maker making a market in the
Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on
which the principal national securities exchange on
which the Security is listed or admitted to trading is
open for the transaction of business or, if the
Security is not listed or admitted to trading on any
national securities exchange, a Business Day. If the
Security is not publicly held or so listed or traded,
then "current per share market price" shall mean the
fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent.
12
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, however,
-------- -------
that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest one ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of
the expiration of the right to exercise any Rights.
(f) If, 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 Common Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in Section 11(a) through
(c), inclusive, and the provisions of Sections 7, 9, 10 and 13
with respect to the Common Shares shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of Common 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
Section 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
Common Shares (calculated to the nearest one ten-thousandth of a
Common Share) obtained by (i) multiplying (x) the number of a
Common Shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in substitution for any adjustment in the number of Common Shares
purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall
be exercisable for the number of Common Shares 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
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be
13
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein and 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 Common Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and
the number of Common Shares which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the par value, if
any, of the Common Shares issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable
(except as otherwise provided by any corporation law applicable
to the Company) Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the
Common Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
number of Common Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided,
--------
however, that the Company shall deliver to such holder a due xxxx
-------
or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the
Common Shares, issuance wholly for cash of any Common Shares at
less than the current market price, issuance wholly for cash of
Common Shares or securities which by their terms are convertible
into or exchangeable for Common Shares, dividends on Common
Shares payable in Common Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made
by the Company to holders of its Common Shares shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the earlier of the Distribution Date or
the Shares Acquisition Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), (iii)
sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction, or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof) or (iv) consummate a
share exchange with any other Person, if at the time of or
14
immediately after such consolidation, merger, sale or share
exchange (A) 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, (B) prior to,
simultaneously with or immediately after such consolidation,
merger, sale or share exchange the shareholders of the Person who
constitute, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of
its Affiliates and Associates or (C) the form or nature of
organization of the Principal Party would preclude or limit the
exercisability of the Rights.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section
23, Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price
--------------------------------------
or Number of Shares. Whenever an adjustment is made as provided
-------------------
in Sections 11 or 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.
Section 13. Consolidation, Merger, Share Exchange or
----------------------------------------
Sale or Transfer of Assets or Earning Power.
-------------------------------------------
(a) In the event that, following the Shares
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger, or any Person or Persons (other than a
Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof) shall consummate a share exchange with the
Company, and, in connection with such consolidation, merger or
share exchange, all or part of the outstanding Common Shares
shall be changed into or exchanged for stock or other securities
of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof),
then, and in each such case, proper provision shall be made so
that: (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of Common Shares for which a Right
is then exercisable (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of any of the events
described in clauses (x), (y) or (z) above (a "Section 13
Event"), the Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event multiplied by the
number of Common Shares for which a Right was exercisable
immediately prior to such first occurrence), in accordance with
the terms of this Agreement, such number of validly authorized
and issued, fully paid, nonassessable
15
(except as otherwise required by any corporation law applicable
to the Principal Party (as such term is hereinafter defined)) and
freely tradeable Common Shares of the Principal Party, not
subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of
Common Shares for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such shares for which
a Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that
product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the
current market price (determined pursuant to Section 11(d)
hereof) per Common Share of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) in
connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to its Common Shares thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section
13(a), the Person that is the issuer of any securities
into which Common Shares of the Company are converted
in such merger, consolidation or share exchange, and if
no securities are so issued, (A) the Person that is the
other party to the merger, consolidation or share
exchange and that survives such merger or
consolidation, or, if there is more than one such
Person, the Person the Common Shares of which have the
greatest aggregate market value of shares outstanding
or (B) if the Person that is the other party to the
merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger
or consolidation (including the Company if it
survives); and
(ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a),
the Person that is the party receiving the greatest
portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common
-------- -------
Shares of such Person are not at such time and have not been
continuously over the preceding twelve (12) month-period
registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Shares of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the
greatest aggregate market value.
16
(c) The Company shall not consummate any such
consolidation, merger, share exchange, sale or transfer unless
the Principal Party shall have a sufficient number of authorized
Common Shares which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger, share exchange or sale of assets mentioned
in paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration
statement under the Securities Act of 1933, as amended
(the "Act"), with respect to the Rights and the
securities purchasable upon exercise of the Rights on
an appropriate form, and will use its best efforts to
cause such registration statement to (A) become
effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, share exchanges, sales or
other transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section
13(a).
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there 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 last quoted
price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value
of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
17
(b) The Company shall not be required to issue
fractions of Common Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares.
In lieu of fractional Common Shares, the Company may, at its sole
option, pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of
one Common Share. For purposes of this Section 14(b), the
current market value of a Common Share shall be the closing price
of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional Rights
or any fractional shares upon exercise of a Right (except as
provided above).
Section 15. Rights of Action. All rights of action
----------------
in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested in
the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this
Agreement.
Section 16. Agreement of Right Holders. Every
--------------------------
holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other holder
of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal 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 Shares
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 Shares 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 other distributions or
be deemed for any purpose the holder of the Common Shares or any
other securities of the Company which may at any
18
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 25 hereof), 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 the Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20
hereof.
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 or corporate trust 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 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right 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
19
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 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 Chairman of
the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization 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 to the
Company and any other Person 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 authorization,
execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in
this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates
after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Common Shares or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any
Common Shares or other securities 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
20
and assurances as may reasonably be required by the Rights Agent
for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from any one of the Chairman of the Board, the
President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while
waiting for those instructions.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in,
or act as the transfer agent for, any of the Rights, Common
Shares or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights
----------------------
Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of the
Common Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of
the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice,
submit his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by
the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States
or of the State of New York or the State of Wisconsin (or of any
other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State
of New York or the State of Wisconsin), in good standing, having
an office or agency in the State of Wisconsin or the State of New
York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million, or (b) an Affiliate of a
corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any
21
property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the
Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
----------------------------------
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption.
----------
(a) The Rights may be redeemed by action of the Board
of Directors pursuant to subsection (b) of this Section 23 and
shall not be redeemed in any other manner.
(b) The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 (one-tenth of a
cent) per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to
as the "Redemption Price"). In the event that the aggregate
redemption price payable to any holder of Rights for all Rights
held by such holder shall not be evenly divisible by $.01, the
fraction of one cent otherwise payable to such holder shall be
increased to one cent. The redemption of the Rights by the Board
of Directors may be made effective at such time on such basis and
with such conditions as the Board of Directors in its sole
discretion may establish.
(c) Immediately upon the effectiveness of the action
of the Board of Directors of the Company ordering the redemption
of the Rights pursuant to subsection (b) of this Section 23, and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any
-------- -------
defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after the effectiveness of the action
of the Board of Directors ordering the redemption of the Rights
pursuant to subsection (b), the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
22
Section 24. 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 void
pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares of the Company at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of
any such Subsidiary, any entity holding Common Shares for or
pursuant to the terms of any such plan, or any trustee,
administrator or fiduciary of such a plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Shares then outstanding.
(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 24 and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares
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 Shares for Rights will
be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company may, at its sole option, pay to the
registered holders of the Right Certificates with regard to which
such fractional Common Shares would otherwise be issued an amount
in cash equal to the same fraction of the current market value of
a whole Common Share. For the purposes of this paragraph (e),
the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this
Section 24.
23
Section 25. Notice of Certain Events.
------------------------
(a) In case the Company shall propose, after the
Distribution Date, (i) to pay any dividend payable in stock of
any class to the holders of Common Shares or to make any other
distribution to the holders of its Common Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of
its Common Shares rights or warrants to subscribe for or to
purchase any additional Common Shares or shares of stock of any
other class or any other securities, rights or options, (iii) to
effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding
Common Shares), (iv) to effect any consolidation or merger into
or with (other than a merger of a Subsidiary into or with the
Company), to effect any share exchange 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 50% or more 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 Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, share exchange, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the
Common 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 10 days prior to the record date for
determining holders of Common Shares for purposes of such action,
and in the case of any such other action, at least 10 days prior
to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares,
whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event or a Section 13
Event shall occur, then, in any such case, the Company shall as
soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall include a brief
summary of the Section 11(a)(ii) Event or Section 13 Event, as
the case may be, and the consequences thereof to holders of
Rights.
Section 26. Notices.
-------
(a) 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:
WPS Resources Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxx, Xxxxxxxxx 00000
Attention: Secretary
(b) Subject to the provisions of Section 21 hereof,
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:
24
Firstar Trust Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Department
(c) Notices or demands authorized by this Agreement to
be given or made by the Company or the Rights Agent to the holder
of any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to
--------------------------
the Distribution Date and subject to the penultimate sentence of
this Section 27, the Company may 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 Common Shares. Without limiting the foregoing, the
Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds
set forth in Sections 1(a) and 3(a) hereof from 15% to not less
than 10%, with appropriate exceptions for persons then
beneficially owning Common Shares of the Company constituting a
percentage of the number of Common Shares then outstanding equal
to or in excess of the new threshold. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 27, 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 provision herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of
the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided,
--------
that from and after the Distribution Date 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 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the
Redemption Price or the Final Expiration Date. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Shares.
Section 28. Successors. All the covenants and
----------
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in
--------------------------
this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares).
25
Section 30. Severability. If any term, provision,
------------
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 31. 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 Wisconsin and for
all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made
and performed entirely within such State.
Section 32. 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 33. Descriptive Headings. Descriptive
--------------------
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
WPS RESOURCES CORPORATION
Attest:
By By
-------------------------- --------------------------
Title: Title:
FIRSTAR TRUST COMPANY
Attest:
By By
-------------------------- --------------------------
Title: Title:
26
Exhibit A
---------
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER DECEMBER 11, 2006 OR
EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001
PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
WPS RESOURCES CORPORATION
This certifies that __________________________, or
registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 12, 1996, and as such agreement
may be amended (the "Rights Agreement"), between WPS Resources
Corporation, a Wisconsin corporation (the "Company"), and Firstar
Trust Company, a Wisconsin banking corporation (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., Milwaukee, Wisconsin time, on
December 11, 2006, at the principal office of the Rights Agent,
or at the office of its successor as Rights Agent, one fully paid
nonassessable (except as otherwise provided by any corporation
law applicable to the Company) share of Common Stock, par value
$1.00 per share ("Common Shares"), of the Company, at a purchase
price of $85 per Common Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of Common
Shares which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and
Purchase Price as of ____________, based on the Common Shares as
constituted at such date. As provided in the Rights Agreement,
the Purchase Price and the number of Common 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. Copies of the Rights Agreement are on file
at the principal executive
A-1
offices of the Company and the principal office of the Rights
Agent or at the office of its successor as Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent or at the office of its successor as Rights Agent,
may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling
the holder to purchase a like aggregate number of Common 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 (i) may be redeemed by the
Company at a redemption price of $.001 per Right or (ii) may be
exchanged in whole or in part for Common Shares of the Company.
The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, but prior to
such Person's acquisition of 50% or more of the outstanding
Common Shares, exchange the Rights evidenced by the Certificate
for Common Shares, at an exchange ratio of one Common Share per
Right, subject to adjustment, as provided in the Rights
Agreement.
The Company is not required to issue any fractional
Common Shares upon the exercise of any Right or Rights evidenced
hereby. In lieu thereof, the Company may, at its sole option,
make a cash payment, 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 the Common 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.
This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
A-2
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of
_______________, ____.
ATTEST: WPS RESOURCES CORPORATION
__________________________ By: _________________________
Title: _________________________
Countersigned:
FIRSTAR TRUST COMPANY
By___________________________
Authorized Signature
A-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________
hereby sells, assigns and transfers unto
_______________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ___________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: _______________________, ____
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
-----------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned by
an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
_____________________________
Signature
-----------------------------------------------------------------
A-4
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To WPS RESOURCES CORPORATION:
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate
to purchase the Common Shares issuable upon the exercise of such
Rights and requests that certificates for such Common 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 Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
A-5
[Form of Reverse Side of Right Certificate -- continued]
-----------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned by
an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
_____________________________
Signature
-----------------------------------------------------------------
NOTICE
------
The signature in the foregoing Forms of Assignment and
Election must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the
case may be, is not completed, the Company and the Rights Agent
will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
A-6
Exhibit B
---------
WPS RESOURCES CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On December 12, 1996, the Board of Directors of WPS
Resources Corporation (the "Company") declared a dividend of one
common share purchase right (a "Right") for each outstanding
share of common stock, $1.00 par value (the "Common Shares"), of
the Company. The dividend is payable on December 16, 1996 to the
shareholders of record on that date (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company
one Common Share of the Company at a price of $85 per Common
Share, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and
Firstar Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (other than the Company, a subsidiary of the
Company or an employee benefit plan of the Company or of a
subsidiary of the Company) (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding Common
Shares (the "Shares Acquisition Date") or (ii) 10 business days
(or such later date as may be determined by action of the
Company's Board of Directors prior to such time as any person
becomes an Acquiring Person) 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 (other than the Company, a
subsidiary of the Company or an employee benefit plan of the
Company or a subsidiary) of 15% or more of such outstanding
Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect
to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate. Notwithstanding
the foregoing, any person or group of affiliated or associated
persons who, at the close of business on December 16, 1996, was
the beneficial owner of at least 3,584,545 Common Shares (which
number of shares constituted 15% of the number of Common Shares
outstanding on such date) will not be deemed an "Acquiring
Person" unless such person or group of affiliated or associated
persons acquires beneficial ownership of additional Common Shares
at any time that such person or group of affiliated or associated
persons is or thereby becomes the beneficial owner of 15% or more
of the Common Shares then outstanding.
The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only
with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares,
outstanding as of the Record Date, even without such notation,
will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close
of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
B-1
The Rights are not exercisable until the Distribution
Date. The Rights will expire on December 11, 2006 (the "Final
Expiration Date"), unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of Common
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of
certain rights or warrants to subscribe for or purchase Common
Shares at a price, or securities convertible into Common Shares
with a conversion price, less than the then current market price
of the Common Shares or (iii) upon the distribution to holders of
the Common Shares of evidences of indebtedness or assets
(excluding regular quarterly cash dividends or dividends payable
in Common Shares) or of subscription rights or warrants (other
than those referred to above).
In the event that any person becomes an Acquiring
Person (a "Flip-In Event"), each holder of a Right will
thereafter have the right to receive upon exercise that number of
Common Shares (or, in certain circumstances cash, property or
other securities of the Company or a reduction in the Purchase
Price) having a market value of two times the then current
Purchase Price. Notwithstanding any of the foregoing, following
the occurrence of a Flip-In Event all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, or
subsequently become beneficially owned by an Acquiring Person,
related persons and transferees will be null and void.
In the event that, at any time following the Shares
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction or (ii) 50% or more of its
consolidated assets or earning power are sold (the events
described in clauses (i) and (ii) are herein referred to as
"Flip-Over Events"), 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 Purchase Price, 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 then current Purchase Price.
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. The Company is
not required to issue any fractional Common Shares and in lieu
thereof, an adjustment in cash will be made based on the market
price of the Common Shares on the last trading day prior to the
date of exercise.
The Purchase Price is payable by certified check,
cashier's check, bank draft or money order or, if so provided by
the Company, the Purchase Price following the occurrence of a
Flip-In Event and until the first occurrence of a Flip-Over Event
may be paid in Common Shares having an equivalent value.
At any time after a person becomes an Acquiring Person
and prior to the acquisition by such Acquiring Person of 50% or
more of the outstanding Common Shares, the Board of Directors of
the Company may exchange the Rights (other than Rights owned by
any Acquiring Person which will have become void), in whole or in
part, at an exchange ratio of one Common Share per Right (subject
to adjustment).
B-2
At any time prior to a person becoming an Acquiring
Person, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right
(the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Other than provisions relating to principal economic
terms of the Rights, the terms of the Rights may be amended by
the Board of Directors of the Company without the consent of the
holders of the Rights, including an amendment to lower the
threshold for exercisability of the Rights from 15% to not less
than 10%, with appropriate exceptions for any person then
beneficially owning a percentage of the number of Common Shares
then outstanding equal to or in excess of the new threshold,
except that from and after the Distribution Date no such
amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
The Company will file a copy of the Rights Agreement
with the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A filed with respect to the
Rights. A copy of the Rights Agreement is also 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 hereby
incorporated herein by reference.
B-3
