SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CTG Resources, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Connecticut 06-1466463
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(State of Incorporation or Organization) (I.R.S. Employer
Identification no.)
100 Columbus Boulevard, Hartford, Connecticut 06103
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(Address of Principal Executive Offices) (Zip Code)
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<S> <C>
If this form relates to the registration of a If this form relates to the registration of a
class of securities pursuant to Section 12(b) of class of securities pursuant to Section 12(g) of
the Exchange Act and is effective pursuant to the Exchange Act and is effective pursuant to
General Instruction A.(c), please check the General Instruction A.(d), please check the
following box. [x] following box. [ ]
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Securities Act registration statement file number to which this form
relates:_______________
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
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<S> <C>
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Rights to Purchase Shares of Series A Junior
Participating Preferred Stock New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
N/A
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(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
On December 1, 1998, the Board of Directors of CTG Resources, Inc. (the
"Company") declared a dividend distribution of one right (a "Right") for each
share of Common Stock, without par value, of the Company (all such shares of
Common Stock of the Company, collectively the "Common Stock") outstanding at the
close of business on December 18, 1998 (the "Record Date"), pursuant to the
terms of a Rights Agreement, dated as of December 1, 1998 (the "Rights
Agreement"), between the Company and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent. The Rights Agreement also provides, subject to specified
exceptions and limitations, that shares of Common Stock issued or delivered by
the Company (whether originally issued or delivered from the Company's
treasury) after the Record Date will be entitled to and accompanied by Rights.
The Rights are in all respects subject to and governed by the provisions of the
Rights Agreement, a copy of which (including all exhibits thereto) is filed as
Exhibit 4.1 hereto and incorporated herein by this reference. A summary
description of the Rights is set forth in Exhibit C to the Rights Agreement.
Item 2. Exhibits.
Exhibit
Number Exhibit
4.1 Rights Agreement (including a Form of Certificate of
Adoption of Amendment to the Amended and Restated Articles
of Incorporation of the Company as Exhibit A thereto, a Form
of Right Certificate as Exhibit B thereto and a Summary of
Rights to Purchase Preferred Stock as Exhibit C thereto)
99.1 Form of letter to shareholders, dated December 1998
99.2 Press release, dated December 1, 1998
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
CTG RESOURCES, INC.
By: S/ Andrew H. Johnson
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Name: Andrew H. Johnson
Title: Treasurer and Chief Accounting Officer
Dated: December 1, 1998
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INDEX TO EXHIBITS
Exhibit
Number Exhibit
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4.1 Rights Agreement (including a Form of Certificate of Adoption
of Amendment to the Amended and Restated Certificate of
Incorporation of the Company as Exhibit A thereto, a Form of
Right Certificate as Exhibit B thereto and a Summary of Rights
to Purchase Preferred Stock as Exhibit C thereto)
99.1 Form of letter to shareholders, dated December 1998
99.2 Press release, dated December 1, 1998
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</TABLE>
RIGHTS AGREEMENT
Dated as of December 1, 1998
By and Between
CTG Resources, Inc.
and
ChaseMellon Shareholder Services, L.L.C.
as Rights Agent
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TABLE OF CONTENTS
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Page
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1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . 4
3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . 5
4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . 6
5. Countersignature and Registration . . . . . . . . . . . . . . . . . 7
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates . . . . . . 7
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . 8
8. Cancellation and Destruction of Right Certificates . . . . . . . . . 9
9. Company Covenants Concerning Securities and Rights . . . . . . . . . 9
10. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11. Adjustment of Purchase Price, Number and Kind of Securities or Number
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12. Certificate of Adjusted Purchase Price or Number of Securities . . . 19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 19
14. Fractional Rights and Fractional Securities . . . . . . . . . . . . 22
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . 23
16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . 23
17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . 24
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . 24
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . 25
(i)
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20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 25
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 27
22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . 28
23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . 30
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . 31
28. Conditions to the Agreement . . . . . . . . . . . . . . . . . . . . 32
29. Successors; Certain Covenants . . . . . . . . . . . . . . . . . . . 32
30. Benefits of This Agreement . . . . . . . . . . . . . . . . . . . . . 32
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
33. Descriptive Headings, Etc . . . . . . . . . . . . . . . . . . . . . 32
34. Determinations and Actions by the Board of Directors . . . . . . . . 33
35. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
(ii)
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RIGHTS AGREEMENT
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This RIGHTS AGREEMENT, dated as of
December 1, 1998 (this "Agreement"), is made and entered into by and between
CTG Resources, Inc., a Connecticut corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent").
RECITALS
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WHEREAS, on December 1, 1998, the Board of Directors of the Company
authorized and declared a dividend distribution of one right (a "Right") for
each share of Common Stock, without par value, of the Company ("Common
Stock") outstanding as of the Close of Business (as hereinafter defined) on
December 18, 1998 (the "Record Date"), each Right initially representing the
right to purchase one one-hundredth of a share of Preferred Stock (as
hereinafter defined), on the terms and subject to the conditions herein set
forth, and further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each share of
Common Stock issued or delivered by the Company (whether originally issued
or delivered from the Company's treasury) after the Record Date but prior to
the earlier of the Distribution Date (as hereinafter defined) and the
Expiration Date (as hereinafter defined) or as provided in Section 22.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" means any Person (other than the Company or any
Related Person) who or which, together with all Affiliates and Associates of
such Person, is the Beneficial Owner of 10% or more of the then-outstanding
shares of Common Stock; PROVIDED, HOWEVER, that a Person will not be deemed
to have become an Acquiring Person solely as a result of a reduction in the
number of shares of Common Stock outstanding unless and until such time as
(i) such Person or any Affiliate or Associate of such Person thereafter
becomes the Beneficial Owner of additional shares of Common Stock
representing 1% or more of the then-outstanding shares of Common Stock,
other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Common Stock are
treated equally, or (ii) any other Person who is the Beneficial Owner of
Common Stock representing 1% or more of the then-outstanding shares of
Common Stock thereafter becomes an Affiliate or Associate of such Person.
Notwithstanding the foregoing, if the Board of Directors of the Company
determine in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph
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(a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock 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" will have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement.
(c) A Person will be deemed the "BENEFICIAL OWNER" of, and to
"BENEFICIALLY OWN," any securities:
(i) the beneficial ownership of which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, warrants, options or other rights
(in each case, other than upon exercise or exchange of the Rights);
PROVIDED, HOWEVER, that a Person will not be deemed 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
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has or shares the right to vote or
dispose of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if such
Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing)
with such other Person (or any of such other Person's Affiliates or
Associates) with respect to acquiring, holding, voting or disposing of
any securities of the Company;
PROVIDED, HOWEVER, that a Person will not be deemed the Beneficial Owner of,
or to Beneficially Own, any security (A) if such Person has the right to
vote such security pursuant to an agreement, arrangement or understanding
(whether or not in writing) which (1) arises solely from a revocable proxy
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 (B) if such beneficial ownership arises solely as a result of such
Person's status as a "clearing agency," as defined in Section 3(a)(23) of
the Exchange Act; PROVIDED FURTHER, HOWEVER, that nothing in this paragraph
(c) will cause a Person engaged in business as an underwriter of securities
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to be the Beneficial Owner of, or to Beneficially Own, any securities
acquired through such Person's participation in good faith in an
underwriting syndicate until the expiration of 40 calendar days after the
date of such acquisition, or such later date as the Board of Directors of
the Company may determine in any specific case.
(d) "BUSINESS DAY" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York (or such other
state in which the principal office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date means 5:00 P.M., Eastern
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business
Day it means 5:00 P.M., Eastern time, on the next succeeding Business Day.
(f) "COMMON STOCK" when used with reference to the Company means the
shares of Common Stock, without par value, of the Company; PROVIDED,
HOWEVER, that, if the Company is the continuing or surviving corporation in
a transaction described in Section 13(a)(ii), "Common Stock" when used with
reference to the Company means shares of the capital stock or units of the
equity interests with the greatest aggregate voting power of the Company.
"Common Stock" when used with reference to any corporation or other legal
entity other than the Company, including an Issuer, means shares of the
capital stock or units of the equity interests with the greatest aggregate
voting power of such corporation or other legal entity.
(g) "COMPANY" means CTG Resources, Inc., a Connecticut corporation.
(h) "DISTRIBUTION DATE" means the earlier of: (i) the Close of
Business on the tenth calendar day following the Share Acquisition Date or
(ii) the Close of Business on the tenth Business Day (or, unless the
Distribution Date shall have previously occurred, such later date as may be
specified by the Board of Directors of the Company) after the commencement
of a tender or exchange offer by any Person (other than the Company or any
Related Person), if upon the consummation thereof such Person would be the
Beneficial Owner of 10% or more of the then-outstanding Common Stock.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(j) "EXPIRATION DATE" means the earliest of (i) the Close of Business
on the Final Expiration Date, (ii) the time at which the Rights are redeemed
as provided in Section 23, and (iii) the time at which all exercisable
Rights are exchanged as provided in Section 24.
(k) "FINAL EXPIRATION DATE" means the tenth anniversary of the Record
Date.
(l) "FLIP-IN EVENT" means any event described in clause (A), (B) or
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(C) of Section 11(a)(ii).
(m) "FLIP-OVER EVENT" means any event described in clause (i), (ii) or
(iii) of Section 13(a).
(n) "ISSUER" has the meaning set forth in Section 13(b).
(o) "NASDAQ" means The NASDAQ Stock Market.
(p) "PERSON" means any individual, firm, corporation or other legal
entity, and includes any successor (by merger or otherwise) of such entity.
(q) "PREFERRED STOCK" means shares of Series A Junior Participating
Preferred Stock, without par value, of the Company having the rights and
preferences set forth in the form of Certificate of Adoption of Amendment to
the Amended and Restated Certificate of Incorporation attached as EXHIBIT A.
(r) "PURCHASE PRICE" means initially $65.00 per one one-hundredth of a
share of Preferred Stock, subject to adjustment from time to time as
provided in this Agreement.
(s) "RECORD DATE" has the meaning set forth in the Recitals to this
Agreement.
(t) "REDEMPTION PRICE" means $.01 per Right, subject to adjustment by
resolution of the Board of Directors of the Company to reflect any stock
split, stock dividend or similar transaction occurring after the Record
Date.
(u) "RELATED PERSON" means (i) any Subsidiary of the Company or (ii)
any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any entity holding shares of Common Stock for
or pursuant to the terms of any such plan.
(v) "RIGHT" has the meaning set forth in the Recitals to this
Agreement.
(w) "RIGHT CERTIFICATES" means certificates evidencing the Rights, in
substantially the form attached as EXHIBIT B.
(x) "RIGHTS AGENT" means ChaseMellon Shareholder Services, L.L.C.,
unless and until a successor Rights Agent has become such pursuant to the
terms of this Agreement, and thereafter, "Rights Agent" means such successor
Rights Agent.
(y) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(z) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company (by press release, filing made with the
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Securities and Exchange Commission or otherwise) that an Acquiring Person
has become such.
(aa) "SUBSIDIARY" when used with reference to any Person means any
corporation or other legal entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person; PROVIDED, HOWEVER, that for purposes of Section
13(b), "Subsidiary" when used with reference to any Person means any
corporation or other legal entity of which at least 20% of the voting power
of the voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
(bb) "TRADING DAY" means any day on which the principal national
securities exchange on which the Common Stock is listed or admitted to
trading is open for the transaction of business or, if the Common Stock is
not listed or admitted to trading on any national securities exchange, a
Business Day.
(cc) "TRIGGERING EVENT" means any Flip-in Event or Flip-over Event.
2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment
and hereby certifies that it complies with the requirements of the New York
Stock Exchange governing transfer agents and registrars. The Company may
from time to time act as Co-Rights Agent or appoint such Co-Rights Agents as
it may deem necessary or desirable. Any actions which may be taken by the
Rights Agent pursuant to the terms of this Agreement may be taken by any
such Co-Rights Agent. To the extent that any Co-Rights Agent takes any
action pursuant to this Agreement, such Co-Rights Agent will be entitled to
all of the rights and protections of, and subject to all of the applicable
duties and obligations imposed upon, the Rights Agent pursuant to the terms
of this Agreement.
3. ISSUE OF RIGHT CERTIFICATES. (a) Until the Distribution Date, (i)
the Rights will be evidenced by the certificates representing shares of
Common Stock registered in the names of the record holders thereof (which
certificates representing shares of Common Stock will also be deemed to be
Right Certificates), (ii) the Rights will be transferable only in connection
with the transfer of the underlying shares of Common Stock and (iii) the
transfer of any certificates evidencing shares of Common Stock in respect of
which Rights have been issued will also constitute the transfer of the
Rights associated with the shares of Common Stock evidenced by such
certificates. On or as promptly as practicable after the Record Date, the
Company will send by first class, postage prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Company as of such
date, a copy of a Summary of Rights to Purchase Preferred Stock in
substantially the form attached as Exhibit C.
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(b) Rights will be issued by the Company in respect of all shares of
Common Stock (other than shares of Common Stock issued upon the exercise or
exchange of any Right) issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date and the Expiration
Date. Certificates evidencing such shares of Common Stock will have stamped
on, impressed on, printed on, written on or otherwise affixed to them the
following legend or such similar legend as the Company may deem appropriate
and as is 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
or transaction reporting system on which the Common Stock may from time to
time be listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between CTG
Resources, Inc. and ChaseMellon Shareholder Services, L.L.C.,
dated as of December 1, 1998 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of CTG
Resources, Inc. The Rights are not exercisable prior to the
occurrence of certain events specified in the Rights Agreement.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may be exchanged, may expire, may be
amended or may be evidenced by separate certificates and no longer
be evidenced by this Certificate. CTG Resources, Inc. will mail to
the holder of this Certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain
circumstances as set forth in the Rights Agreement, Rights that
are or were beneficially owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement) may become null and void.
(c) Any Right Certificate issued pursuant to this Section 3 that
represents Rights beneficially owned by an Acquiring Person or any Associate
or Affiliate thereof and any Right Certificate issued at any time upon the
transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate
and any Right Certificate issued pursuant to Section 6 or 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall be subject to and contain the following
legend or such similar legend as the Company may deem appropriate and as is
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
or transaction reporting system on which the Rights may from time to time be
listed or quoted, or to conform to usage:
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The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 11(a)(ii) or Section 13 of the Rights Agreement.
(d) As promptly 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 Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(e) In the event that the Company purchases or otherwise acquires any
shares of Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock will be deemed canceled
and retired so that the Company will not be entitled to exercise any Rights
associated with the Common Stock so purchased or acquired.
4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the form
of election to purchase and the form of assignment to be printed on the
reverse thereof) will be substantially in the form attached as EXHIBIT B
with such changes and 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 or transaction reporting system on which the Rights
may from time to time be listed or quoted, or to conform to usage. Subject
to the provisions of Section 22, the Right Certificates, whenever issued, on
their face will entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as are set forth therein at the
Purchase Price set forth therein, but the Purchase Price, the number and
kind of securities issuable upon exercise of each Right and the number of
Rights outstanding will be subject to adjustment as provided herein.
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5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right Certificates
will be executed on behalf of the Company by its Chairman, its President or
any Vice President, either manually or by facsimile signature, and will have
affixed thereto the Company's seal or a facsimile thereof which will be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates will be manually
countersigned by the Rights Agent and will not be valid for any purpose
unless so countersigned. In case any officer of the Company who signed any
of the Right Certificates ceases 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, is 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 officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the principal office of the Rights Agent designated for
such purpose and at such other offices 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 or any transaction reporting
system on which the Rights may from time to time be listed or quoted, books
for registration and transfer of the Right Certificates issued hereunder.
Such books will 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.
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Sections 7(d) and 14, at any time after the
Close of Business on the Distribution Date and prior to the Expiration Date,
any Right Certificate or Right Certificates representing exercisable Rights
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a share of Preferred Stock
(or other securities, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any such Right Certificate or Rights
Certificates must make such request in a writing delivered to the Rights
Agent and must surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Thereupon or as promptly as
practicable thereafter, subject to the provisions of Sections 7(d) and 14,
the Company will prepare, execute and deliver to the Rights Agent, and the
Rights Agent will countersign and deliver, a Right Certificate or Right
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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,
if requested by the Company, 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 prepare, execute and deliver a new Right Certificate of like
tenor to the Rights Agent and the Rights Agent will countersign and deliver
such new Right Certificate to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
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 and prior to the Expiration 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 office or offices of the Rights Agent designated for such purpose,
together with payment in cash, in lawful money of the United States of
America by certified check or bank draft payable to the order of the
Company, equal to the sum of (i) the exercise price for the total number of
securities as to which such surrendered Rights are exercised and (ii) an
amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with the provisions of
Section 9(d).
(b) Upon receipt of a Right Certificate representing exercisable
Rights with the form of election to purchase duly executed, accompanied by
payment as described above, the Rights Agent will promptly (i) requisition
from any transfer agent of the Preferred Stock (or make available, if the
Rights Agent is the transfer agent) certificates representing the number of
one one-hundredths of a share of Preferred Stock to be purchased (and the
Company hereby irrevocably authorizes and directs its transfer agent to
comply with all such requests) or, if the Company elects to deposit shares
of Preferred Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of Preferred Stock
as are to be purchased (and the Company hereby irrevocably authorizes and
directs such depositary agent to comply with all such requests), (ii) after
receipt of such certificates (or depositary receipts, as the case may be),
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, (iii) when appropriate, requisition from the
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Company or any transfer agent therefor (or make available, if the Rights
Agent is the transfer agent) certificates representing the number of
equivalent shares of common stock to be issued in lieu of the issuance of
shares of Common Stock in accordance with the provisions of Section
11(a)(iii), (iv) when appropriate, after receipt of such certificates, 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, (v) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with the provisions of Section 14 or in lieu of the
issuance of shares of Common Stock in accordance with the provisions of
Section 11(a)(iii), (vi) when appropriate, after receipt, deliver such cash
to or upon the order of the registered holder of such Right Certificate, and
(vii) when appropriate, deliver any due bill or other instrument provided to
the Rights Agent by the Company for delivery to the registered holder of
such Right Certificate as provided by Section 11(l).
(c) In case the registered holder of any Right Certificate exercises
less than all the Rights evidenced thereby, the Company will prepare,
execute and deliver a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised and the Rights Agent will countersign and
deliver such new Right Certificate to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will be obligated to undertake any
action with respect to any purported transfer, split up, combination or
exchange of any Right Certificate pursuant to Section 6 or exercise of a
Right Certificate as set forth in this Section 7 unless the registered
holder of such Right Certificate has (i) completed and signed the
certificate following the form of assignment or the form of election to
purchase, as applicable, set forth on the reverse side of the Right
Certificate surrendered for such transfer, split up, combination, exchange
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 may reasonably request.
(e) Notwithstanding the foregoing provisions of this Section 7, the
exercisability of the Rights shall be subject to the receipt by the Company
of all such permits or approvals of any governmental agency or authority as
shall be required by law; PROVIDED, HOWEVER, that nothing contained in this
Section 7 shall relieve the Company of its obligations under Section 9(e)
hereof.
8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or
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in canceled form, or, if surrendered to the Rights Agent, will be canceled
by it, and no Right Certificates will be issued in lieu thereof except as
expressly permitted by the provisions of this Agreement. The Company will
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent will so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent will deliver all canceled Right Certificates to the Company or
will, at the written request of the Company, destroy such canceled Right
Certificates, and in such case will deliver a certificate of destruction
thereof to the Company.
9. COMPANY COVENANTS CONCERNING SECURITIES AND RIGHTS. The Company
covenants and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Preferred Stock or any shares of Preferred Stock
held in its treasury, a number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7.
(b) So long as the Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) issuable upon the
exercise of the Rights may be listed on a national securities exchange or
quoted on Nasdaq, it will endeavor to cause, from and after such time as the
Rights become exercisable, all securities reserved for issuance upon the
exercise of Rights to be listed on such exchange or quoted on Nasdaq, upon
official notice of issuance upon such exercise.
(c) It will take all such action as may be necessary to ensure that
all shares of Preferred Stock (and, following the occurrence of a Triggering
Event, shares of Common Stock and/or other securities) delivered upon
exercise of Rights, at the time of delivery of the certificates for such
securities, will be (subject to payment of the Purchase Price) duly
authorized, validly issued, fully paid and nonassessable securities.
(d) It will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates representing
securities issued upon the exercise of Rights; provided, however, that the
Company will not be required to pay any transfer tax or charge 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 or depositary
receipts representing securities issued upon the exercise of Rights in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or deliver any
certificates or depositary receipts representing securities issued upon the
exercise of any Rights until any such tax or charge has been paid (any such
tax or charge being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax is due.
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(e) If necessary to permit the issuance of securities upon exercise or
exchange of the Rights, it will endeavor, from and after the Distribution
Date, to obtain all such permits and approvals of any governmental agency or
authority as shall be required by law.
(f) It will use its best efforts (i) to file on an appropriate form,
as soon as practicable following the later of the Share Acquisition Date and
the Distribution Date, a registration statement under the Securities Act
with respect to the securities issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities and (B) the Expiration Date. The
Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time after the date set forth in clause
(i) of the first sentence of this Section 9(f), the exercisability of the
Rights in order to prepare and file such registration statement and to
permit it to become effective. Upon any such suspension, the Company will
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. In addition, if the Company
determines that a registration statement should be filed under the
Securities Act or any state securities laws following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights in each
relevant jurisdiction until such time as a registration statement has been
declared effective and, upon any such suspension, the Company will 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. Notwithstanding anything in this
Agreement to the contrary, the Rights will not be exercisable in any
jurisdiction if the requisite registration or qualification in such
jurisdiction has not been effected or the exercise of the Rights is not
permitted under applicable law.
(g) Notwithstanding anything in this Agreement to the contrary, after
the later of the Share Acquisition Date and the Distribution Date it will
not 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 eliminate
or otherwise diminish the benefits intended to be afforded by the Rights.
(h) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Section 11, 13, 14 or
24 it will make all arrangements necessary so that such other securities
and/or cash are available for distribution by the Rights Agent, if and when
appropriate.
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10. RECORD DATE. Each Person in whose name any certificate
representing shares of Preferred Stock (or shares of Common Stock and/or
other securities, as the case may be) is issued upon the exercise of Rights
will for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) represented thereby on, and such certificate
will be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of
such surrender and payment is a date upon which the transfer books of the
Company for the Preferred Stock (or Common Stock and/or other securities, as
the case may be) are closed, such Person will be deemed to have become the
record holder of such securities on, and such certificate will be dated, the
next succeeding Business Day on which the transfer books of the Company for
the Preferred Stock (or Common Stock and/or other securities, as the case
may be) are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate will not be entitled to any rights of a
holder of any security for which the Rights are or may become exercisable,
including, without limitation, the right to vote, to receive dividends or
other distributions, or to exercise any preemptive rights, and will not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SECURITIES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities
issuable upon exercise of 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 that the Company at any time after the Record
Date (A) declares a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivides the outstanding shares of Preferred
Stock, (C) combines the outstanding shares of Preferred Stock into a
smaller number of shares of Preferred Stock or (D) issues any shares of
its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification and/or the number and/or kind of shares of capital
stock issuable on such date upon exercise of a Right, will be
proportionately adjusted so that the holder of any Right exercised
after such time is entitled to receive upon payment of the Purchase
Price then in effect the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such
date and at a time when the transfer books of the Company for the
Preferred Stock were open, the holder of such Right would have owned
upon such exercise (and, in the case of a reclassification, would have
retained after giving effect to such reclassification) and would have
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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
issuable upon exercise of one Right. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) or Section 13, the adjustment provided for in this Section
11(a)(i) will be in addition to, and will be made prior to, any
adjustment required pursuant to Section 11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or Associate of any
Acquiring Person, directly or indirectly, (1) merges into the Company
or otherwise combines with the Company and the Company is the
continuing or surviving corporation of such merger or combination
(other than in a transaction subject to Section 13), (2) merges or
otherwise combines with any Subsidiary of the Company, (3) in one or
more transactions (otherwise than in connection with the exercise,
exchange or conversion of securities exercisable or exchangeable for or
convertible into shares of any class of capital stock of the Company or
any of its Subsidiaries) transfers cash, securities or any other
property to the Company or any of its Subsidiaries in exchange (in
whole or in part) for shares of any class of capital stock of the
Company or any of its Subsidiaries or for securities exercisable or
exchangeable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries, or otherwise obtains
from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of
the Company or any of its Subsidiaries or securities exercisable or
exchangeable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries (otherwise than as part
of a pro rata distribution to all holders of shares of any class of
capital stock of the Company or any of its Subsidiaries), (4) sells,
purchases, leases, exchanges, mortgages, pledges, transfers or
otherwise disposes (in one or more transactions) to, from, with or of,
as the case may be, the Company or any of its Subsidiaries (otherwise
than in a transaction subject to Section 13), any property, including
securities, on terms and conditions less favorable to the Company than
the Company would be able to obtain in an arm's-length transaction with
an unaffiliated third party, (5) receives any compensation from the
Company or any of its Subsidiaries other than compensation as a
director or a regular full-time employee, in either case at rates
consistent with the Company's (or its Subsidiaries') past practices or
(6) receives the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
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advantage provided by the Company or any of its Subsidiaries; or
(C) during such time as there is an Acquiring Person, there is
any reclassification of securities of the Company (including any
reverse stock split), any recapitalization of the Company, any merger
or consolidation of the Company with any of its Subsidiaries or any
other transaction or series of transactions involving the Company or
any of its Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person), other than a transaction subject to
Section 13, which has the effect, directly or indirectly, of increasing
by more than 1% the proportionate share of the outstanding shares of
any class of equity securities of the Company or any of its
Subsidiaries or of securities exercisable or exchangeable for or
convertible into equity securities of the Company or any of its
Subsidiaries of which an Acquiring Person, or any Affiliate or
Associate of any Acquiring Person, is the Beneficial Owner;
then, and in each such case, from and after the latest of the
Distribution Date, the Share Acquisition Date and the date of the
occurrence of such Flip-in Event, proper provision will be made so that
each holder of a Right, except as provided below, will thereafter have
the right to receive, upon exercise thereof in accordance with the
terms of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the date of the occurrence of such
Flip-in Event (or, if any other Flip-in Event shall have previously
occurred, the product of the then-current Purchase Price multiplied by
the number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the date of the
first occurrence of a Flip-in Event), in lieu of shares of Preferred
Stock, such number of shares of Common Stock as equals the result
obtained by (x) multiplying the then-current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the date of the occurrence
of such Flip-in Event (or, if any other Flip-in Event shall have
previously occurred, multiplying the then-current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the date of the first
occurrence of a Flip-in Event), and dividing that product by (y) 50% of
the current per share market price of the Common Stock (determined
pursuant to Section 11(d)) on the date of the occurrence of such Flip-
in Event. Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Flip-in Event, any Rights that
are Beneficially Owned by (A) any Acquiring Person (or any Affiliate or
Associate of any Acquiring Person), (B) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who becomes a transferee
after the occurrence of a Flip-in Event or (C) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a
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transferee prior to or concurrently with the occurrence of a Flip-in
Event pursuant to either (1) a transfer from an Acquiring Person to
holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the
provisions of this Section 11(a)(ii), and subsequent transferees of any
of such Persons, will be void without any further action and any holder
of such Rights will thereafter have no rights whatsoever with respect
to such Rights under any provision of this Agreement. The Company will
use all reasonable efforts to ensure that the provisions of this
Section 11(a)(ii) are complied with, but will have no liability to any
holder of Right Certificates or any 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. Upon the
occurrence of a Flip-in Event, no Right Certificate that represents
Rights that are or have become void pursuant to the provisions of this
Section 11(a)(ii) will thereafter be issued pursuant to Section 3 or
Section 6, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the
provisions of this Section 11(a)(ii) will be canceled. Upon the
occurrence of a Flip-over Event, any Rights that shall not have been
previously exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only pursuant to Section 13 and not pursuant
to this Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there are not
sufficient shares of Common Stock authorized but unissued or issued but
not outstanding to permit the issuance of all the shares of Common
Stock issuable in accordance with Section 11(a)(ii) upon the exercise
of a Right, the Board of Directors of the Company will use its best
efforts promptly to authorize and, subject to the provisions of Section
9(e), make available for issuance additional shares of Common Stock or
other equity securities of the Company having equivalent voting rights
and an equivalent value (as determined in good faith by the Board of
Directors of the Company) to the Common Stock (for purposes of this
Section 11(a)(iii), "equivalent common stock"). In the event that
equivalent common stock is so authorized, upon the exercise of a Right
in accordance with the provisions of Section 7, the registered holder
will be entitled to receive (A) shares of Common Stock, to the extent
any are available, and (B) a number of shares of equivalent common
stock, which the Board of Directors of the Company has determined in
good faith to have a value equivalent to the excess of (x) the
aggregate current per share market value on the date of the occurrence
of the most recent Flip-in Event of all the shares of Common Stock
issuable in accordance with Section 11(a)(ii) upon the exercise of a
Right (the "Exercise Value") over (y) the aggregate current per share
market value on the date of the occurrence of the most recent Flip-in
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Event of any Common Stock available for issuance upon the exercise of
such Right; PROVIDED, HOWEVER, that if at any time after 90 calendar
days after the latest of the Share Acquisition Date, the Distribution
Date and the date of the occurrence of the most recent Flip-in Event,
there are not sufficient shares of Common Stock and/or equivalent
common stock available for issuance upon the exercise of a Right, then
the Company will be obligated to deliver, upon the surrender of such
Right and without requiring payment of the Purchase Price, Common Stock
(to the extent available), equivalent common stock (to the extent
available) and then cash (to the extent permitted by applicable law and
any agreements or instruments to which the Company is a party in effect
immediately prior to the Share Acquisition Date), which securities and
cash have an aggregate value equal to the excess of (1) the Exercise
Value over (2) the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the date
of the occurrence of the most recent Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, the product of the then-
current Purchase Price multiplied by the number of one one-hundredths
of a share of Preferred Stock for which a Right would have been
exercisable immediately prior to the date of the occurrence of such
Flip-in Event if no other Flip-in Event had previously occurred). To
the extent that any legal or contractual restrictions prevent the
Company from paying the full amount of cash payable in accordance with
the foregoing sentence, the Company will pay to holders of the Rights
as to which such payments are being made all amounts which are not then
restricted on a pro rata basis and will continue to make payments on a
pro rata basis as promptly as funds become available until the full
amount due to each such Rights holder has been paid.
(b) In the event that the Company fixes a record date for the issuance
of rights, options or warrants to all holders of shares of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Stock (or securities
having equivalent rights, privileges and preferences as the Preferred Stock
(for purposes of this Section 11(b), "equivalent preferred stock")) or
securities convertible into Preferred Stock or equivalent preferred stock at
a price per share of Preferred Stock or equivalent preferred stock (or
having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the current per
share market price of the Preferred Stock (determined pursuant to Section
11(d)) on such record date, the Purchase Price to be in effect after such
record date will be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
is the number of shares of Preferred Stock outstanding on such record date
plus the number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
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current per share market price and the denominator of which is the number of
shares of Preferred Stock outstanding on such record date plus the number of
additional shares of Preferred Stock and/or equivalent preferred stock 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
issuable upon exercise of one Right. In case such subscription price may be
paid in a consideration part or all of which is in a form other than cash,
the value of such consideration will be as determined in good faith by the
Board of Directors of the Company, whose determination will be described in
a statement filed with the Rights Agent. Shares of Preferred Stock owned by
or held for the account of the Company will not be deemed outstanding for
the purpose of any such computation. Such adjustment will 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 will
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In the event that the Company fixes a record date for the making
of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets,
stock (other than a dividend payable in shares of Preferred Stock) or
subscription rights, options or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date
will be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which is the
current per share market price of the Preferred Stock (as determined
pursuant to Section 11(d)) on such record date or, if earlier, the date on
which the Preferred Stock begins to trade on an ex-dividend or when issued
basis for such distribution, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination
will be described in a statement filed with the Rights Agent) of the portion
of the evidences of indebtedness, cash, assets or stock so to be distributed
or of such subscription rights, options or warrants applicable to one share
of Preferred Stock, and the denominator of which is such current per share
market price of the Preferred Stock; 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 issuable upon
exercise of one Right. Such adjustments will be made successively whenever
such a record date is fixed; and in the event that such distribution is not
so made, the Purchase Price will again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of the Common Stock on any date will be deemed
to be the average of the daily closing prices per share of such Common
Stock for the 30 consecutive Trading Days immediately prior to such
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date; provided, however, that in the event that the current per share
market price of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in such Common
Stock or securities convertible into such Common Stock (other than the
Rights) or (B) any subdivision, combination or reclassification of such
Common Stock, 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 will be
appropriately adjusted to take into account ex-dividend trading or to
reflect the current per share market price per Common Stock equivalent.
The closing price for each day will 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 Common Stock is not listed or admitted
to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if the Common Stock
is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such
date the Common Stock 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 Common Stock selected
by the Board of Directors of the Company. If the Common Stock is not
publicly held or not so listed or traded, or is not the subject of
available bid and asked quotes, "current per share market price" will
mean the fair value per share as determined in good faith by the Board
of Directors of the Company, whose determination will be described in a
statement filed with the Rights Agent.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Stock will be determined in
the same manner as set forth above for the Common Stock in Section
11(d)(i), other than the last sentence thereof. If the current per
share market price of the Preferred Stock cannot be determined in the
manner provided above, the "current per share market price" of the
Preferred Stock will be conclusively deemed to be an amount equal to
the current per share market price of the Common Stock multiplied by
one hundred (as such number may be appropriately adjusted to reflect
events such as stock splits, stock dividends, recapitalizations or
similar transactions relating to the Common Stock occurring after the
date of this Agreement). If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, or the subject of
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available bid and asked quotes, "current per share market price" of the
Preferred Stock will mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights
Agent. For all purposes of this Agreement, the current per share
market price of one one-hundredth of a share of Preferred Stock will be
equal to the current per share market price of one share of Preferred
Stock divided by one hundred.
(e) Except as set forth below, no adjustment in the Purchase Price
will be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be
made will be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 will be made to the
nearest cent or to the nearest one one-millionth of a share of Preferred
Stock or one ten-thousandth of a share of Common Stock or other security, as
the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 will be made no later than the
earlier of (i) three years from the date of the transaction which requires
such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised becomes entitled to receive any
securities of the Company other than shares of Preferred Stock, thereafter
the number and/or kind of such other securities so receivable upon exercise
of any Right (and/or the Purchase Price in respect thereof) will be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Stock (and the Purchase Price in respect thereof) contained in this Section
11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock (and the Purchase Price in respect thereof) will apply on
like terms to any such other securities (and the Purchase Price in respect
thereof).
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder will evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a share of Preferred Stock issuable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price pursuant to
Section 11(b) or Section 11(c), each Right outstanding immediately prior to
the making of such adjustment will thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths
of a share of Preferred Stock (calculated to the nearest one one-millionth
of a share of Preferred Stock) obtained by (i) multiplying (x) the number of
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one one-hundredths of a share of Preferred Stock issuable upon exercise of a
Right immediately prior to such adjustment of the Purchase Price 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 one one-hundredths of a share of Preferred Stock
issuable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights will be exercisable for the number
of one one-hundredths of a share of Preferred Stock 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 will 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 will 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. Such 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, will be at least 10 calendar 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 will, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing,
subject to the provisions of Section 14, the additional Rights to which such
holders are entitled as a result of such adjustment, or, at the option of
the Company, will cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by
the Company, new Right Certificates evidencing all the Rights to which such
holders are entitled after such adjustment. Right Certificates so to be
distributed will be issued, executed, and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and will be registered in the names of the holders
of record of Right Certificates on the record date specified in the public
announcement.
(j) Without respect to any adjustment or change in the Purchase Price
and/or the number and/or kind of securities issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number and kind of securities
which were expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of
the Preferred Stock or below the then par value, if any, of any other
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securities of the Company issuable upon exercise of the Rights, the Company
will 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 shares of Preferred Stock or such other securities, as the
case may be, at such adjusted Purchase Price.
(l) In any case in which this Section 11 otherwise requires that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record
date the number of shares of Preferred Stock or other securities of the
Company, if any, issuable upon such exercise over and above the number of
shares of Preferred Stock or other 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 delivers to
such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares of Preferred Stock or other
securities upon the occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary, the
Company will 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 in its good faith judgment the Board of Directors of the
Company determines to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of shares
of Preferred Stock at less than the current per share market price therefor,
(iii) issuance wholly for cash of shares Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11 hereafter made by the Company to holders of
its Preferred Stock is not taxable to such shareholders.
(n) Notwithstanding anything in this Agreement to the contrary, in the
event that the Company at any time after the Record Date prior to the
Distribution Date (i) pays a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivides the outstanding
shares of Common Stock, (iii) combines the outstanding shares of Common
Stock into a smaller number of shares or (iv) issues any shares of its
capital stock in a reclassification of the outstanding shares of Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, will be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any
such event equals the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event
by a fraction the numerator of which is the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
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denominator of which is the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. The
adjustments provided for in this Section 11(n) will be made successively
whenever such a dividend is paid or such a subdivision, combination or
reclassification is effected.
12a CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SECURITIES.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company will 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 Preferred Stock and the Common Stock a copy of such certificate and (c)
if such adjustment is made after the Distribution Date, mail a brief summary
of such adjustment to each holder of a Right Certificate in accordance with
Section 26.
13a CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that:
(i) at any time after a Person has become an Acquiring Person,
the Company consolidates with, or merges with or into, any other Person
and the Company is not the continuing or surviving corporation of such
consolidation or merger; or
(ii) at any time after a Person has become an Acquiring Person,
any Person consolidates with the Company, or merges with or into the
Company, and the Company is the continuing or surviving corporation of
such merger or consolidation and, in connection with such merger or
consolidation, all or part of the Common Stock is changed into or
exchanged for stock or other securities of any other Person or cash or
any other property; or
(iii) at any time after a Person has become an Acquiring Person,
the Company, directly or indirectly, sells or otherwise transfers (or
one or more of its Subsidiaries sells or otherwise transfers), in one
or more transactions, assets or earning power (including without
limitation securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) representing in the aggregate
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 one or more of its wholly owned Subsidiaries;
then, and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and
the date of the occurrence of such Flip-over Event (A) each holder of a
Right thereafter has the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement at an exercise price per Right
equal to the product of the then-current Purchase Price multiplied by the
number of one one-hundredths of a share of Preferred Stock for which a Right
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was exercisable immediately prior to the Share Acquisition Date, such number
of duly authorized, validly issued, fully paid, nonassessable and freely
tradeable shares of Common Stock of the Issuer, free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call
or first refusal, as equals the result obtained by (x) multiplying the
then-current Purchase Price by the number of one one-hundredths of a share
of Preferred Stock for which a Right is exercisable immediately prior to the
Share Acquisition Date and dividing that product by (y) 50% of the current
per share market price of the Common Stock of the Issuer (determined
pursuant to Section 11(d)), on the date of the occurrence of such Flip-over
Event; (B) the Issuer will thereafter be liable for, and will assume, by
virtue of the occurrence of such Flip-over Event, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term "Company"
will thereafter be deemed to refer to the Issuer; and (D) the Issuer will
take such steps (including without limitation the reservation of a
sufficient number of its shares of Common Stock to permit the exercise of
all outstanding Rights) in connection with such consummation as may be
necessary to assure that the provisions hereof are thereafter applicable, as
nearly as reasonably may be possible, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" means (i) in the case of
any Flip-over Event described in Sections 13(a)(i) or (ii) above, the Person
that is the continuing, surviving, resulting or acquiring Person (including
the Company as the continuing or surviving corporation of a transaction
described in Section 13(a)(ii) above), and (ii) in the case of any Flip-over
Event described in Section 13(a)(iii) above, the Person that is the party
receiving the greatest portion of the assets or earning power (including
without limitation securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to such
transaction or transactions; provided, however, that, in any such case, (A)
if (1) no class of equity security of such Person is, at the time of such
merger, consolidation or transaction and has been continuously over the
preceding 12-month period, registered pursuant to Section 12 of the Exchange
Act, and (2) such Person is a Subsidiary, directly or indirectly, of another
Person, a class of equity security of which is and has been so registered,
the term "Issuer" means such other Person; and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, a class of
equity security of two or more of which are and have been so registered, the
term "Issuer" means whichever of such Persons is the issuer of the equity
security having the greatest aggregate market value. Notwithstanding the
foregoing, if the Issuer in any of the Flip-over Events listed above is not
a corporation or other legal entity having outstanding equity securities,
then, and in each such case, (x) if the Issuer is directly or indirectly
wholly owned by a corporation or other legal entity having outstanding
equity securities, then all references to the Common Stock of the Issuer
will be deemed to be references to the Common Stock of the corporation or
other legal entity having outstanding equity securities which ultimately
controls the Issuer, and (y) if there is no such corporation or other legal
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entity having outstanding equity securities, (I) proper provision will be
made so that the Issuer creates or otherwise makes available for purposes of
the exercise of the Rights in accordance with the terms of this Agreement, a
kind or kinds of security or securities having a fair market value at least
equal to the economic value of the shares of Common Stock which each holder
of a Right would have been entitled to receive if the Issuer had been a
corporation or other legal entity having outstanding equity securities; and
(II) all other provisions of this Agreement will apply to the issuer of such
securities as if such securities were shares of Common Stock.
(c) The Company will not consummate any Flip-over Event if, (i) at the
time of or immediately after such Flip-over Event, there are or would be any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements in effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Flip-over Event, the
shareholders of the Person who constitutes, or would constitute, the Issuer
for purposes of Section 13(a) shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of the organization of the Issuer would preclude or
limit the exercisability of the Rights. In addition, the Company will not
consummate any Flip-over Event unless the Issuer has a sufficient number of
authorized shares of Common Stock (or other securities as contemplated in
Section 13(b) above) 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 to such consummation the Company and the Issuer have
executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in subsections (a) and (b) of this Section
13 and further providing that as promptly as practicable after the
consummation of any Flip-over Event, the Issuer will:
(A) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities issuable
upon exercise of the Rights on an appropriate form, and use its best
efforts to cause such registration statement to (1) become effective as
soon as practicable after such filing and (2) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(B) take all such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights; and
(C) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) The provisions of this Section 13 will similarly apply to
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successive mergers or consolidations or sales or other transfers. In the
event that a Flip-over Event occurs at any time after the occurrence of a
Flip-in Event, except for Rights that have become void pursuant to Section
11(a)(ii), Rights that shall not have been previously exercised will cease
to be exercisable in the manner provided in Section 11(a)(ii) and will
thereafter be exercisable in the manner provided in Section 13(a).
14a FRACTIONAL RIGHTS AND FRACTIONAL SECURITIES. (a) The Company will
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company will pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such fractional
Rights otherwise would be issuable, an amount in cash equal to the same
fraction of the current market value of one Right. For the purposes of this
Section 14(a), the current market value of one Right is the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights otherwise would have been issuable. The closing price for
any day is 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 the Rights are not publicly held or
are not so listed or traded, or are not the subject of available bid and
asked quotes, the current market value of one Right will mean the fair value
thereof as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed with the
Rights Agent.
(b) The Company will not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one one-hundredth of a share of Preferred
Stock may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement provides that the
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holders of such depositary receipts have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the shares of
Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay to any
Person to whom or which such fractional shares of Preferred Stock would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of one share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one share of Preferred Stock is
the closing price of the Preferred Stock (as determined in the same manner
as set forth for the Common Stock in the second sentence of Section
11(d)(i)) for the Trading Day immediately prior to the date of such
exercise; provided, however, that if the closing price of the Preferred
Stock cannot be so determined, the closing price of the Preferred Stock for
such Trading Day will be conclusively deemed to be an amount equal to the
closing price of the Common Stock (determined pursuant to the second
sentence of Section 11(d)(i)) for such Trading Day multiplied by one hundred
(as such number may be appropriately adjusted to reflect events such as
stock splits, stock dividends, recapitalizations or similar transactions
relating to the Common Stock occurring after the date of this Agreement);
provided further, however, that if neither the Common Stock nor the
Preferred Stock is publicly held or listed or admitted to trading on any
national securities exchange, or the subject of available bid and asked
quotes, the current market value of one share of Preferred Stock will mean
the fair value thereof as determined in good faith by the Board of Directors
of the Company, whose determination will be described in a statement filed
with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the Company will
not be required to issue fractions of shares of Common Stock or other
securities issuable upon exercise or exchange of the Rights or to distribute
certificates which evidence any such fractional securities. In lieu of
issuing any such fractional securities, the Company may pay to any Person to
whom or which such fractional securities would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of one
such security. For purposes of this Section 14(c), the current market value
of one share of Common Stock or other security issuable upon the exercise or
exchange of Rights is the closing price thereof (as determined in the same
manner as set forth for the Common Stock in the second sentence of Section
11(d)(i)) for the Trading Day immediately prior to the date of such exercise
or exchange; provided, however, that if neither the Common Stock nor any
such other securities is publicly held or listed or admitted to trading on
any national securities exchange, or the subject of available bid and asked
quotes, the current market value of one share of Common Stock or such other
security will mean the fair value thereof as determined in good faith by the
Board of Directors of the Company, whose determination will mean the fair
value thereof as will be described in a statement filed with the Rights
Agent.
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15a 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, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the holder of any shares of Common Stock), may
in his own behalf and for his own benefit enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under this Agreement, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.
16a AGREEMENT OF RIGHTS 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 are transferable only
in connection with the transfer of the Common Stock;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificate or the associated Common
Stock certificate made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent
will be affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any fractional
Rights and any fractional securities upon exercise or exchange of a Right,
except as otherwise provided in Section 14.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent will have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
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competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however,
that the Company will use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
17a RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as
such, of any Right Certificate will be entitled to vote, receive dividends
or be deemed for any purpose the holder of shares of Preferred Stock or any
other securities of the Company which may at any time be issuable upon the
exercise of the Rights represented thereby, nor will 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 to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 25), or
to receive dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions of this Agreement or exchanged pursuant to
the provisions of Section 24.
18a CONCERNING THE RIGHTS AGENT. (a) The Company will 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 shall indemnify the Rights
Agent for, and hold it harmless against, any loss, liability, claim or
expense ("Loss") arising out of or in connection with its duties under this
Agreement, including the costs and expenses of defending itself against any
Loss, unless such Loss shall have been determined by a court of competent
jurisdiction to be a result of the Rights Agent's gross negligence or
intentional misconduct.
(b) The Rights Agent will be protected and will 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 evidencing shares of Preferred Stock or Common
Stock or 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.
19a MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. (a)
Any corporation or other legal entity into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
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or any corporation or other legal entity resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any corporation or other legal entity succeeding to the corporate
trust business of the Rights Agent or any successor Rights Agent, will 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 or other legal entity would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. If at the time such successor Rights Agent succeeds 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 if 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 will have the full force provided
in the Right Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent changes and at such
time any of the Right Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and if at that time
any of the Right Certificates have not 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 will have the
full force provided in the Right Certificates and in this Agreement.
20a 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, will 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 will 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 deems 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 any one of the Chairman, the
President, any Vice President, the Secretary or the Treasurer of the Company
and delivered to the Rights Agent, and such certificate will 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.
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(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct. In no case will the Rights
Agent be liable for special, indirect, incidental or consequential loss or
damages of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the possibility of such
damages.
(d) The Rights Agent will 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 will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due 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 will it be responsible for any breach by the
Company of any covenant contained in this Agreement or in any Right
Certificate; nor will it be responsible for any adjustment required under
the provisions of Sections 11 or 13 (including any adjustment which results
in Rights becoming void) or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment);
nor will it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of stock or
other securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of stock or other securities will,
when issued, be duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
and other acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman, the President, any Vice President, the Secretary or
the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
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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 will preclude the
Rights Agent from acting in any other capacity for the Company or for any
other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will 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. The Rights
Agent will not be under any duty or responsibility to ensure compliance with
any applicable federal or state securities laws in connection with the
issuance, transfer or exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange,
either (i) the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 or 2 thereof or (ii) any other
actual or suspected irregularity exists, the Rights Agent will not take any
further action with respect to such requested exercise, transfer, split up,
combination or exchange without first consulting with the Company, and will
thereafter take further action with respect thereto only in accordance with
the Company's written instructions.
21a 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 calendar days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Stock or the Common Stock by registered or
certified mail, and to the holders of the Right Certificates by first class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 calendar 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 Preferred Stock and the Common Stock by registered or certified mail,
and to the holders of the Right Certificates by first class mail. If the
Rights Agent resigns or is removed or otherwise becomes incapable of acting,
the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 calendar 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 will, 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,
will be a corporation or other legal entity organized and doing business
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under the laws of the United States or of any state of the United States, in
good standing, having an office in 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. After appointment,
the successor Rights Agent will 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 will
deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company will file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Preferred Stock or the Common Stock, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, will
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.
22a 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 per share and the number or kind of
securities issuable upon exercise of the Rights made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or sale by the Company of shares of Common Stock following the Distribution
Date and prior to the Expiration Date, the Company (a) will, with respect to
shares of Common Stock so issued or sold pursuant to the exercise, exchange
or conversion of securities (other than Rights) issued prior to the
Distribution Date which are exercisable or exchangeable for, or convertible
into, shares of Common Stock, and (b) may, in any other case, if deemed
necessary, appropriate or desirable by the Board of Directors of the
Company, issue Right Certificates representing an equivalent number of
Rights as would have been issued in respect of such shares of Common Stock
if they had been issued or sold prior to the Distribution Date, as
appropriately adjusted as provided herein as if they had been so issued or
sold; provided, however, that (i) no such Right Certificate will be issued
if, and to the extent that, in its good faith judgment the Board of
Directors of the Company determines that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company or
to the Person to whom or which such Right Certificate otherwise would be
issued and (ii) no such Right Certificate will be issued if, and to the
extent that, appropriate adjustment otherwise has been made in lieu of the
issuance thereof.
23. REDEMPTION. (a) Prior to the Expiration Date, the Board of
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Directors of the Company may, at its option, redeem all but not less than
all of the then-outstanding Rights at the Redemption Price at any time prior
to the Close of Business on the later of (i) the Distribution Date and (ii)
Share Acquisition Date. Any such redemption will be effective immediately
upon the action of the Board of Directors of the Company ordering the same,
unless such action of the Board of Directors of the Company expressly
provides that such redemption will be effective at a subsequent time or upon
the occurrence or nonoccurrence of one or more specified events (in which
case such redemption will be effective in accordance with the provisions of
such action of the Board of Directors of the Company).
(bi Immediately upon the effectiveness of the redemption of the Rights
as provided in Section 23(a), 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 will be to receive the Redemption Price,
without interest thereon. Promptly after the effectiveness of the
redemption of the Rights as provided in Section 23(a), the Company will
publicly announce such redemption and, within 10 calendar days thereafter,
will give notice of such redemption to the holders of the then-outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Company; provided, however, that
the failure to give, or any defect in, any such notice will not affect the
validity of the redemption of the Rights. Any notice that is mailed in the
manner herein provided will be deemed given, whether or not the holder
receives the notice. The notice of redemption mailed to the holders of
Rights will state the method by which the payment of the Redemption Price
will be made. The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based upon the current per share market price
of the Common Stock (determined pursuant to Section 11(d)) at the time of
redemption), or any other form of consideration deemed appropriate by the
Board of Directors of the Company (based upon the fair market value of such
other consideration, determined by the Board of Directors of the Company in
good faith) or any combination thereof. The Company may, at its option,
combine the payment of the Redemption Price with any other payment being
made concurrently to holders of shares of Common Stock and, to the extent
that any such other payment is discretionary, may reduce the amount thereof
on account of the concurrent payment of the Redemption Price. If legal or
contractual restrictions prevent the Company from paying the Redemption
Price (in the form of consideration deemed appropriate by the Board of
Directors) at the time of redemption, the Company will pay the Redemption
Price, without interest, promptly after such time as the Company ceases to
be so prevented from paying the Redemption Price.
24. EXCHANGE. (a) The Board of Directors of the Company may, at its
option, at any time after the later of the Share Acquisition Date and the
Distribution Date, exchange all or part of the then-outstanding and
exercisable Rights (which will not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii)) for shares of Common Stock
at an exchange ratio of one share of Common Stock per Right, appropriately
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adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the Record Date (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Any such exchange will be effective
immediately upon the action of the Board of Directors of the Company
ordering the same, unless such action of the Board of Directors of the
Company expressly provides that such exchange will be effective at a
subsequent time or upon the occurrence or nonoccurrence of one or more
specified events (in which case such exchange will be effective in
accordance with the provisions of such action of the Board of Directors of
the Company). Notwithstanding the foregoing, the Board of Directors of the
Company will not be empowered to effect such exchange at any time after any
Person (other than the Company or any Related Person), who or which,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the then-outstanding shares of Common
Stock.
(bi Immediately upon the effectiveness of the exchange of any Rights
as provided in Section 24(a), and without any further action and without any
notice, the right to exercise such Rights will terminate and the only right
with respect to such Rights thereafter of the holder of such Rights will be
to receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. Promptly after
the effectiveness of the exchange of any Rights as provided in Section
24(a), the Company will publicly announce such exchange and, within 10
calendar days thereafter, will give notice of 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; provided, however, that the failure to
give, or any defect in, such notice will not affect the validity of such
exchange. Any notice that is mailed in the manner herein provided will be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common
Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange will 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)) held by
each holder of Rights.
(ci In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a
Right (i) equivalent common stock (as such term is used in Section
11(a)(iii)), (ii) cash, (iii) debt securities of the Company, (iv) other
assets or (v) any combination of the foregoing, in any event having an
aggregate value, as determined in good faith by the Board of Directors of
the Company (whose determination will be described in a statement filed with
the Rights Agent), equal to the current market value of one share of Common
Stock (determined pursuant to Section 11(d)) on the Trading Day immediately
preceding the date of the effectiveness of the exchange pursuant to this
Section 24.
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25. NOTICE OF CERTAIN EVENTS. (a) If, after the Distribution Date,
the Company proposes (i) to pay any dividend payable in stock of any class
to the holders of shares of Preferred Stock or to make any other
distribution to the holders of shares of Preferred Stock (other than a
regular periodic cash dividend), (ii) to offer to the holders of shares of
Preferred Stock rights, options or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or
any other securities, rights or options, (iii) to effect any
reclassification of its shares of Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), (iv) to effect any consolidation or merger into or with,
or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or any of
its Subsidiaries) representing more than 50% of the assets and earning power
of the Company and its Subsidiaries, taken as a whole, to any other Person
or Persons other than the Company or one or more of its wholly owned
Subsidiaries, (v) to effect the liquidation, dissolution or winding up of
the Company or (vi) to declare or pay any dividend on the Common Stock
payable in shares of Common Stock or to effect a subdivision, combination or
reclassification of the Common Stock then, in each such case, the Company
will give to each holder of a Right Certificate, to the extent feasible and
in accordance with Section 26, a notice of such proposed action, which
specifies the record date for the purposes of such stock dividend,
distribution or offering of rights, options or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Stock and/or Preferred
Stock, if any such date is to be fixed, and such notice will be so given, in
the case of any action covered by clause (i) or (ii) above, at least 10
calendar days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and, in the case of any such
other action, at least 10 calendar days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
the Common Stock and/or Preferred Stock, whichever is the earlier.
(bi In case any Triggering Event occurs, then, in any such case, the
Company will as soon as practicable thereafter give to the Rights Agent and
each holder of a Right Certificate, in accordance with Section 26, a notice
of the occurrence of such event, which specifies the event and the
consequences of the event to holders of Rights.
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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 will 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:
CTG Resources, Inc.
100 Columbus Boulevard
Hartford, Connecticut 06103
Attention: President
(bi 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 will 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:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Ridgefield Park, New Jersey 07660
Attention: Relationship Manager
(ci Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior the Distribution Date, to the holder of any
certificate evidencing shares of Common Stock) will 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.
27. SUPPLEMENTS AND AMENDMENTS. Prior to the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to the last
sentence of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent will if the Company so directs, supplement
or amend any provision of this Agreement in any respect without the approval
of any holders of Rights or shares of Common Stock. From and after the time
at which the Rights cease to be redeemable pursuant to Section 23, and
subject to the last sentence of this Section 27, the Company may, and the
Rights Agent will if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights or shares of Common
Stock in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder or (iv) to supplement or amend the provisions hereunder in any
manner which the Company may deem desirable; provided that no such
supplement or amendment shall adversely affect the interests of the holders
of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), and no such supplement or amendment shall
cause the Rights again to become redeemable or cause this Agreement again to
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become supplementable or amendable otherwise than in accordance with the
provisions of this sentence. Without limiting the generality or effect of
the foregoing, this Agreement may be supplemented or amended to provide for
such voting powers for the Rights and such procedures for the exercise
thereof, if any, as the Board of Directors of the Company may determine to
be appropriate. Upon the delivery of a certificate from an 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 will execute
such supplement or amendment; provided, however, that the failure or refusal
of the Rights Agent to execute such supplement or amendment will not affect
the validity of any supplement or amendment adopted by the Board of
Directors of the Company, any of which will be effective in accordance with
the terms thereof. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment may be made which decreases the stated
Redemption Price to an amount less than $.01 per Right.
28. CONDITIONS TO THE AGREEMENT. The effectiveness of this Agreement
and each and every right and obligation obtained or incurred pursuant
hereto, including, but not limited to, the exercisability of the rights, is
conditioned upon (a) the Company having received all necessary approvals and
consents form all local, state and federal regulatory authorities having
jurisdiction over the Company and the transactions contemplated by this
Agreement and (b) the absence of any statute, rule, regulation, injunction
or other order (whether temporary, preliminary or permanent) enacted,
issued, promulgated, enforced or entered into by any United States, state or
local legislative body, governmental agency or commission or court of
competent jurisdiction which is in effect and has the effect of making the
distribution or exercise of the Rights illegal or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
29. SUCCESSORS; CERTAIN COVENANTS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent
will be binding on and inure to the benefit of their respective successors
and assigns hereunder.
30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent,
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement. This Agreement will be for the sole and
exclusive benefit of the Company, the Rights Agent, and the registered
holders of the Right Certificates (or prior to the Distribution Date, the
Common Stock).
31. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under the
internal substantive laws of the State of Connecticut and for all purposes
will be governed by and construed in accordance with the internal
substantive laws of such State applicable to contracts to be made and
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performed entirely within such State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely with such
State.
32. 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 will remain in full
force and effect and will in no way be affected, impaired or invalidated;
provided, however, that nothing contained in this Section 32 will affect the
ability of the Company under the provisions of Section 27 to supplement or
amend this Agreement to replace such invalid, void or unenforceable term,
provision, covenant or restriction with a legal, valid and enforceable term,
provision, covenant or restriction.
33. DESCRIPTIVE HEADINGS, ETC. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions
hereof. Unless otherwise expressly provided, references herein to Articles,
Sections and Exhibits are to Articles, Sections and Exhibits of or to this
Agreement.
34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. For all
purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such Common Stock of which any
Person is the Beneficial Owner, will be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company will have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors of the
Company or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including without limitation the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including any determination as to whether particular Rights shall
have become void). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, any omission
with respect to any of the foregoing) which are done or made by the Board of
Directors of the Company in good faith will (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and (y) not subject the Directors of the Company to any
liability to any Person, including without limitation the Rights Agent and
the holders of the Rights.
35. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed
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to be an original, and all such counterparts will together constitute but
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
[SEAL]
Attest: CTG RESOURCES, INC.
By:
Name: Name:
Title: Title:
[SEAL]
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By:
Name: Name:
Title: Title:
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EXHIBIT A
CERTIFICATE OF ADOPTION
OF AMENDMENT
TO THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CTG RESOURCES, INC.
We, Victor H. Frauenhofer, Chairman of the Board, and Reginald L.
Babcock, Secretary, of CTG Resources, Inc., a Connecticut corporation (the
"Company"), do hereby certify that pursuant to the authority conferred upon
the Board of Directors of the Company (the "Directors") by the Amended and
Restated Certificate of Incorporation of the Company, the Directors at a
meeting duly called and held on December 1, 1998 at which a quorum was
present and acting throughout, adopted the following resolution to amend the
Amended and Restated Certificate of Incorporation of the Company to create a
series of Serial Preferred Stock designated as Series A Junior Participating
Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board of
Directors of the Company in accordance with the provisions of the Amended
and Restated Certificate of Incorporation, Article III of the Amended and
Restated Certificate of Incorporation of this Company be, and it hereby is,
amended by adding after Paragraph C of Article III of the Amended and
Restated Certificate of Incorporation a new subparagraph C.1 as set forth
below:
1. Series A Junior Participating Preferred Stock
(a) There is established hereby a series of Serial Preferred
Stock that shall be designated Series A Junior Participating Preferred
Stock (hereinafter sometimes called this "Series" or the "Series A
Junior Participating Preferred Stock") and that shall have the terms
set forth in this subparagraph C.1.
(b) The number of shares of this Series shall be 200,000.
(c) (i) The holders of record of shares of Series A Junior
Participating Preferred Stock shall be entitled to receive, when and as
declared by the Directors in accordance with the terms hereof, out of
funds legally available for the purpose, cumulative quarterly dividends
payable in cash on the first day of January, April, July and October in
each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share of Series A Junior
Participating Preferred Stock or fraction of a share of Series A Junior
A-1
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Participating Preferred Stock in an amount per share (rounded to the
nearest cent) equal to the greater of (A) $1.00 per share or (B)
subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions (other than a dividend payable in
shares or Common Stock, or a subdivision of the outstanding Common
Stock (by reclassification or otherwise)), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share of Series A Junior Participating Preferred
Stock or fraction of a share of Series A Junior Participating Preferred
Stock. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of
share of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (B) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
(ii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such Series A Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. No dividends shall be paid
upon or declared and set apart for any Series A Junior Participating
Preferred Stock for any dividend period unless at the same time a
dividend for the same dividend period, ratably in proportion to the
respective annual dividend rates fixed therefor, shall be paid upon or
declared and set apart for all Serial Preferred Stock of all series
then outstanding and entitled to receive such dividend. The Directors
may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
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date shall be no more than 40 days prior to the date fixed for the
payment thereof.
(d) The Series A Junior Participating Preferred Stock is not
redeemable.
(e) (i) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company
(hereinafter referred to as a "Liquidation"), no distribution shall be
made to the holders of shares of stock ranking junior (either as to
dividends or upon Liquidation) to the Series A Junior Participating
Preferred Stock, unless, prior thereto, the holders of shares of Series
A Junior Participating Preferred Stock shall have received at least an
amount per share equal to one hundred times the then applicable
Purchase Price as defined in the Rights Agreement, as the same may be
from time to time amended in accordance with its terms (which Purchase
Price is $65.00 as of December 1, 1998), subject to adjustment from
time to time as provided in the Rights Agreement, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or
not earned or declared, to the date of such payment, provided that the
holders of shares of Series A Junior Participating Preferred Stock
shall be entitled to receive at least an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders
of Common Stock (the "Series A Junior Participating Preferred Stock
Liquidation Preference").
(ii) In the event, however, that the net assets of the
Company are not sufficient to pay in full the amount of the Series A
Junior Participating Preferred Stock Liquidation Preference and the
liquidation preferences of all other series of Serial Preferred Stock,
if any, which rank on a parity with the Series A Junior Participating
Preferred Stock as to distribution of assets in Liquidation, all shares
of this Series and of such other series of Serial Preferred Stock shall
share ratably in the distribution of assets (or proceeds thereof) in
Liquidation in proportion to the full amounts to which they are
respectively entitled.
(iii) In the event the Company shall at any time declare
or pay any dividend on the Common Stock payable in consolidation of the
outstanding Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event pursuant to the proviso set
forth in paragraph (i) above, shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
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outstanding immediately prior to such event.
(iv) The merger or consolidation of the Company into or with
any other corporation, or the merger of any other corporation into it,
or the sale, lease or conveyance of all or substantially all the
property or business of the Company, shall not be deemed to be a
Liquidation for the purpose of this subparagraph (e).
(f) The Series A Junior Participating Preferred Stock shall not
be convertible into Common Stock.
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IN WITNESS WHEREOF, Victor H. Frauenhofer, Chairman of the Board,
and Reginald L. Babcock, Secretary, of CTG Resources, Inc., acting for and
on behalf of the Company, have hereunto subscribed their names this 1st day
of December, 1998.
Victor H. Frauenhofer
Chairman of the Board
Reginald L. Babcock
Secretary
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EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER DECEMBER 18, 2008 (SUBJECT TO POSSIBLE
EXTENSION AT THE OPTION OF THE COMPANY) OR EARLIER IF REDEEMED,
EXCHANGED OR AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION,
EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY BECOME NULL AND
VOID.
Right Certificate
CTG RESOURCES, INC.
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions, and conditions
of the Rights Agreement, dated as of December 1, 1998 (the "Rights
Agreement"), between CTG Resources, Inc., a Connecticut corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C. (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. (Eastern time) on the Expiration Date (as such term is defined in the
Rights Agreement) at the principal office or offices of the Rights Agent
designated for such purpose, one one-hundredth of a fully paid nonassessable
share of Series A Junior Participating Preferred Stock, without par value
(the "Preferred Stock"), of the Company, at a purchase price of $65.00 per
one one-hundredth of a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase and related Certificate duly executed. If this Right
Certificate is exercised in part, the holder will be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for
the number of whole Rights not exercised. The number of Rights evidenced by
this Right Certificate (and the number of one one-hundredths of a share of
Preferred Stock which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of the date of the Rights Agreement, based on the Preferred Stock
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as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
occurrence 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 of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability
of the Rights under the circumstances specified in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of
the Rights Agent and can be obtained from the Company without charge upon
written request therefor. Terms used herein with initial capital letters
and not defined herein are used herein with the meanings ascribed thereto in
the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant
to either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a
transfer which the Directors of the Company have determined is part of a
plan, arrangement or understanding which has the purpose or effect of
avoiding certain provisions of the Rights Agreement, and subsequent
transferees of any of such Persons, will be void without any further action
and any holder of such Rights will thereafter have no rights whatsoever with
respect to such Rights under any provision of the Rights Agreement. From
and after the occurrence of a Flip-in Event, no Right Certificate will be
issued that represents Rights that are or have become void pursuant to the
provisions of the Rights Agreement, and any Right Certificate delivered to
the Rights Agent that represents Rights that are or have become void
pursuant to the provisions of the Rights Agreement will be canceled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates entitling the holder to purchase a like
number of one one-hundredths of a share of Preferred Stock (or other
securities, as the case may be) as the Right Certificate or Right
Certificates surrendered entitled such holder (or former holder in the case
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<PAGE>
of a transfer) to purchase, upon presentation and surrender hereof at the
principal office of the Rights Agent designated for such purpose, with the
Form of Assignment (if appropriate) and the related Certificate duly
executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right or may be exchanged in whole or in part.
The Rights Agreement may be supplemented and amended by the Company, as
provided therein.
The Company is not required to issue fractions of shares of Preferred
Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock, which may, at the option of the
Company, be evidenced by depositary receipts) or other securities issuable
upon the exercise of any Right or Rights evidenced hereby. In lieu of
issuing such fractional shares of Preferred Stock or other securities, the
Company may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of the
Preferred Stock or of any other securities of the Company which may at any
time be issuable upon the exercise of the Right or Rights represented
hereby, nor will anything contained herein or in the Rights Agreement 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 have been exercised in accordance with the provisions
of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________, ____.
[SEAL]
ATTEST: CTG Resources, Inc.
By:
Name:
Title:
Countersigned:
By:
Authorized Signature
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<PAGE>
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:
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being sold, assigned, transferred, split up, combined or exchanged by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, ____
Signature
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To CTG Resources, Inc.:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one one-hundredths of
a share of Preferred Stock or other securities issuable upon the exercise of
such Rights and requests that certificates for such securities be issued in
the name of and delivered to:
Please insert social security
or other identifying number:
(Please print name and address)
If such number of Rights is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such
Rights will 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:
B-7
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was, or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: __________, ____
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to
Purchase and in the related Certificates must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved medallion signature program) pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended.
B-8
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
The Board of Directors (the "Directors") of CTG Resources, Inc. (the
"Company") have declared a dividend distribution of one right (a "Right")
for each outstanding share of Common Stock, without par value (the "Common
Stock"), of the Company. The distribution is payable on December 18, 1998
(the "Record Date") to the shareholders of record as of the close of
business on the Record Date. Each Right entitles the registered holder
thereof to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, without par value (the
"Preferred Stock"), of the Company at a price (the "Purchase Price") of
$65.00 per one one-hundredth of a share of Preferred Stock, subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement, dated as of December 1, 1998 (the "Rights Agreement"),
between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (the "Rights Agent").
Under the Rights Agreement, the Rights will be evidenced by the
certificates evidencing shares of Common Stock until the earlier (the
"Distribution Date") of: (i) the close of business on the tenth calendar
day following the first date (the "Share Acquisition Date") of public
announcement by the Company that a person or group (other than the Company,
a subsidiary or employee benefit or stock ownership plan of the Company or
any of its affiliates or associates), together with its affiliates and
associates, has acquired beneficial ownership of 10% or more of the
outstanding shares of Common Stock (any such person or group being
hereinafter called an "Acquiring Person") or (ii) the close of business on
the tenth business day (or such later date as may be specified by the
Directors) following the commencement of a tender offer or exchange offer by
a person (other than the Company, a subsidiary or employee benefit or stock
ownership plan of the Company or any of its affiliates or associates), the
consummation of which would result in beneficial ownership by such person of
10% or more of the outstanding shares of Common Stock.
The Rights Agreement provides that, until the Distribution Date, the
Rights may be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), any certificate evidencing shares of Common Stock issued upon
transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption, exchange or expiration of the Rights), the
surrender for transfer of any certificates evidencing shares of Common Stock
will also constitute the transfer of the Rights associated with such
certificates. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights. No Right is exercisable at any time prior to the
Distribution Date. The Rights will expire on the tenth anniversary of the
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Record Date (the "Final Expiration Date") unless earlier redeemed, exchanged
or amended by the Company as described below. Until a Right is exercised,
the holder thereof, as such, will have no rights as a shareholder of the
Company, including the right to vote or to receive dividends.
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities issuable, upon exercise of the Rights will be subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of shares of Preferred Stock
of certain rights or warrants to subscribe for or purchase the Preferred
Stock at a price, or securities convertible into the Preferred Stock with a
conversion price, less than the then-current market price of the Preferred
Stock or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness, cash (excluding regular periodic cash dividends),
assets, stock (excluding dividends payable in the Preferred Stock) or
subscription rights or warrants (other than those referred to above). The
number of outstanding Rights and the number of one one-hundredths of the
shares of Preferred Stock issuable upon exercise of each Right will be
subject to adjustment in the event of a stock dividend on the Common Stock
payable in shares of Common Stock or a subdivision, combination or
reclassification of the Common Stock occurring, in any such case, prior to
the Distribution Date.
The Preferred Stock issuable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled, in connection
with the declaration of a dividend on the Common Stock, to a preferential
dividend payment equal to the greater of (i) $1.00 per share and (ii) an
amount equal to 100 times the related dividend declared per share of Common
Stock. Subject to customary anti-dilution provisions, in the event of
liquidation, the holders of shares of Preferred Stock will be entitled to a
preferential liquidation payment equal to the greater of (a) $100 per share
and (b) an amount equal to 100 times the liquidation payment made per share
of Common Stock. Because of the nature of the Preferred Stock's dividend,
voting and liquidation rights, the value of the one one-hundredth interest
in a share of Preferred Stock purchasable upon exercise of a Right should
approximate the value of one share of Common Stock.
Rights will be exercisable to purchase shares of Preferred Stock only
after the Distribution Date occurs and prior to the occurrence of a Flip-in
Event as described below. A Distribution Date resulting from the
commencement of a tender offer or exchange offer described in clause (ii) of
the second paragraph of this summary could precede the occurrence of a
Flip-in Event and thus result in the Rights being exercisable to purchase
shares of Preferred Stock. A Distribution Date resulting from any
occurrence described in clause (i) of the second paragraph of this summary
would necessarily follow the occurrence of a Flip-in Event and thus result
in the Rights being exercisable to purchase shares of Common Stock or other
securities as described below.
Under the Rights Agreement, in the event (a "Flip-in Event") that
(i) any person or group, together with its affiliates and associates,
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becomes an Acquiring Person, (ii) any Acquiring Person or any affiliate or
associate thereof merges into or combines with the Company and the Company
is the surviving corporation, (iii) any Acquiring Person or any affiliate or
associate thereof effects certain other transactions with the Company or
(iv) during such time as there is an Acquiring Person the Company effects
certain transactions, in each case as described in the Rights Agreement,
then, in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and
the date of the occurrence of such Flip-in Event each holder of a Right,
other than Rights that are or were owned beneficially by an Acquiring Person
(which, from and after the date of a Flip-in Event, will be void), will have
the right to receive, upon exercise thereof at the then-current exercise
price of the Right, that number of shares of Common Stock (or, under certain
circumstances, an economically equivalent security or securities of the
Company) that at the time of such Flip-in Event have a market value of two
times the exercise price of the Right.
In the event (a "Flip-over Event") that, at any time after a person has
become an Acquiring Person, (i) the Company merges with or into any person
and the Company is not the surviving corporation, (ii) any person merges
with or into the Company and the Company is the surviving corporation, but
all or part of the Common Stock is changed or exchanged for stock or other
securities of any other person or cash or any other property or (iii) 50% or
more of the Company's assets or earning power, including securities creating
obligations of the Company, are sold, in each case as described in the
Rights Agreement, then, and in each such case, proper provision will be made
so that from and after the latest of the Share Acquisition Date, the
Distribution Date and the date of the occurrence of such Flip-over Event,
each holder of a Right, other than Rights which have become void, will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the Right, that number of shares of common
stock (or, under certain circumstances, an economically equivalent security
or securities) of such other person that at the time of such Flip-over Event
have a market value of two times the exercise price of the Right.
From and after the later of the Share Acquisition Date and the
Distribution Date, Rights (other than any Rights that have become void) will
be exercisable as described above, upon payment of the aggregate exercise
price in cash. In addition, at any time after the later of the Share
Acquisition Date and the Distribution Date and prior to the acquisition by
any person or group of affiliated or associated persons of 50% or more of
the outstanding shares of Common Stock, the Company may exchange the Rights
(other than any rights that have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company will not be required to issue fractional
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shares of Preferred Stock (other than fractions that are integral multiples
of one one-hundredth of a share of Preferred Stock, which may, at the option
of the Company, be evidenced by depositary receipts) or fractional shares of
Common Stock or other securities issuable upon the exercise of Rights. In
lieu of issuing such securities, the Company may make a cash payment, as
provided in the Rights Agreement.
The Company may, at its option, redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment (the "Redemption
Price"), at any time prior to the close of business on the later of the
Distribution Date and the Share Acquisition Date. 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.
The Rights Agreement may be amended by the Company without the approval
of any holders of Rights Certificates, including amendments that increase or
decrease the Purchase Price, that add other events requiring adjustment to
the Purchase Price payable and the number of the shares of Preferred Stock
or other securities issuable upon the exercise of the Rights or that modify
procedures relating to the redemption of the Rights, except that no
amendment may be made that decreases the stated Redemption Price to an
amount less than $.01 per Right.
The Directors will have the exclusive power and authority to administer
the Rights Agreement and to exercise all rights and powers specifically
granted to the Directors or to the Company therein, or as may be necessary
or advisable in the administration of the Rights Agreement, including
without limitation the right and power to interpret the provisions of the
Rights Agreement and to make all determinations deemed necessary or
advisable for the administration of the Rights Agreement (including any
determination to redeem or not redeem the Rights or to amend or not amend
the Rights Agreement). All such actions, calculations, interpretations and
determinations (including any omission with respect to any of the foregoing)
which are done or made by the Directors in good faith will be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties and will not subject the Directors to any
liability to any person, including without limitation the Rights Agent and
the holders of the Rights.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A.
A copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights is as of the Record Date, does
not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement, which is incorporated herein by this reference.
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December 1998
To Our Shareholders:
We are pleased to inform you that CTG Resources, Inc. has adopted a
shareholder rights plan.
The plan is intended to protect the Company and its shareholders from
potentially coercive takeover practices or takeover bids which are
inconsistent with the interests of the Company and its shareholders. The
plan is not intended to deter unsolicited offers that would provide superior
long-term value to all of the Company's shareholders. The adoption of a
shareholder rights plan has become common practice in major American
companies and a well accepted approach to ensuring that all shareholders
receive a fair price and are treated equally in the event of a takeover.
This action was taken after careful study and not in response to any
pending unsolicited attempt to take control of the Company. Of course, the
Company from time to time explores possibilities for strategic alliances,
business combinations or other substantive transactions as part of its
ongoing assessment of its business and strategies.
To effect the rights plan, the Board of Directors declared a dividend
of one share purchase right for each outstanding share of the Company's
common stock. The distribution is being made to shareholders of record as
of the close of business on December 18, 1998.
Under the plan, the rights will initially trade together with the
Company's common stock and will not be exercisable. In the absence of
further board action, the rights generally will become exercisable and allow
the holder to acquire the Company's common stock at a discounted price if
any person or group acquires 10 percent or more of the Company's common
stock. Rights held by persons who exceed the applicable threshold will be
void. In certain circumstances, the rights will entitle the holder to buy
shares in an acquiring entity at a discounted price.
The plan also includes an exchange option. In general, after the
rights become exercisable, the Board of Directors may, at its option, effect
an exchange of part or all of the rights (other than rights that have become
void) for shares of the Company's common stock. Under this option, the
Company would issue one share of common stock for each right, subject to
adjustment in certain circumstances.
The Company's Board of Directors may, at its option, redeem all rights
for $.01 per right, generally at any time prior to the rights becoming
exercisable. The rights will expire on December 18, 2008, unless earlier
redeemed, exchanged or amended by the Board of Directors.
<PAGE>
The issuance of the rights is not a taxable event, will not affect the
Company's reported financial condition or results of operations (including
earnings per share), will not interfere with the Company's operating,
financing or investing activities and will not change the way in which the
Company's common stock is currently traded.
A summary of the shareholder rights plan (which explains the terms and
nature of the rights) is enclosed. Shareholders are urged to review the
summary carefully and retain it with their permanent records.
In adopting the shareholder rights plan, the Board has expressed its
confidence in the Company's future and its determination that you, our
shareholders, be given every opportunity to participate fully in that
future.
On Behalf of the Board of Directors,
Victor H. Frauenhofer
Chairman of the Board
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<PAGE>
PRESS RELEASE
CTG RESOURCES, INC. ANNOUNCES
SHAREHOLDER RIGHTS PLAN
FOR IMMEDIATE RELEASE
Hartford, Connecticut, December 1, 1998 -- CTG Resources, Inc.
(NYSE: CTG) announced today board action adopting a shareholder
rights plan that provides for rights to be issued to shareholders
of record on December 18, 1998.
According to Arthur C. Marquardt, CTG's President and Chief
Executive Officer, "The rights plan adopted today is similar to
the shareholder rights plans adopted by literally hundreds of
other companies in an effort to protect shareholders from
coercive takeover practices or takeover bids that are
inconsistent with the interests of the company and its other
constituents. The rights plan is intended to assure that CTG
shareholders receive fair and equal treatment if efforts are made
to gain control of the Company without paying all shareholders a
premium value."
Under the plan, the rights will initially trade together with CTG
common stock and will not be exercisable. In the absence of
further board action, the rights generally will become
exercisable and allow the holder to acquire CTG common stock at a
discounted price if a person or group acquires 10 percent or more
of the outstanding shares of CTG common stock. Rights held by
persons who exceed the applicable threshold will be void. In
certain circumstances, the rights will entitle the holder to buy
shares in an acquiring entity at a discounted price.
The plan also includes an exchange option. In general, after the
rights become exercisable, the Board of Directors may, at its
option, effect an exchange of part or all of the rights -- other
than rights that have become void -- for shares of CTG common
stock. Under this option, CTG would issue one share of common
stock for each right, subject to adjustment in certain
circumstances.
CTG's Board of Directors may, at its option, redeem all rights
for $.01 per right, generally at any time prior to the rights
becoming exercisable. The rights will expire on December 18,
2008, unless earlier redeemed, exchanged or amended by the Board
of Directors.
The issuance of the rights is not a taxable event, will not
affect CTG's reported financial condition or results of
operations (including earnings per share) and will not change the
way in which CTG common stock is currently traded.
# # #
<PAGE>
