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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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
FRIEDE GOLDMAN INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
MISSISSIPPI 72-1362492
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
525 CAPITOL STREET
SUITE 402
JACKSON, MISSISSIPPI 39201
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(Address of principal executive office) (Zip Code)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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 SERIES A
JUNIOR PARTICIPATING
PREFERRED STOCK NEW YORK STOCK EXCHANGE
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The authorized capital stock of Friede Goldman International Inc. (the
"Company") consists of 125,000,000 shares of common stock, par value $.01 per
share (the "Common Stock"), and 5,000,000 shares of preferred stock, par value
$.01 per share, of which 50,000 shares are designated the Series A Junior
Participating Preferred Stock (the "Preferred Stock").
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On December 4, 1998, the Board of Directors of the Company declared a
dividend distribution of one preferred stock purchase right (a "Right") for each
outstanding share of Common Stock. The distribution is payable on December 21,
1998 (the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder thereof to purchase from the Company one one-
thousandth of a share of the Preferred Stock at a price of $75, subject to
adjustment. The following is a summary of the Rights; the full description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent").
Copies of the Rights Agreement and the Amendment to the Company's Articles
of Incorporation specifying the terms of the Preferred Stock (the "Preferred
Stock Amendment") are available free of charge from the Company. This summary
description of the Rights and the Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions of
the Rights Agreement and the Preferred Stock Amendment, including the
definitions therein of certain terms, which Rights Agreement and Preferred Stock
Amendment are incorporated herein by reference.
Initially, the Rights will attach to all certificates representing shares
of outstanding Common Stock, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Stock and the
Distribution Date will occur upon the earlier of (i) 10 days following the date
of public announcement that a person or group of persons has become an Acquiring
Person (as hereinafter defined) or (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors prior to the time a person
becomes an Acquiring Person) following the commencement of, or the announcement
of an intention to make, a tender offer or exchange offer upon consummation of
which the offeror would, if successful, become an Acquiring Person (the earlier
of such dates being called the "Distribution Date").
The term "Acquiring Person" means any person who or which, together with
all of its affiliates and associates, shall be the beneficial owner of 15% or
more of the outstanding Common Stock, but shall not include (i) the Company or
any Subsidiary of the Company or any employee benefit plan of the Company or
(ii) J. L. Holloway, his lineal descendants and ascendants, heirs, executors or
other legal representatives and any trusts established for the benefit of the
foregoing, or any other person or entity in which the foregoing persons or
entities are at the time of determination the direct record and beneficial
owners of all outstanding voting securities (collectively, "Exempt Persons").
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date, upon transfer or new issuance of
Common Stock, will contain a notation incorporating the Rights Agreement by
reference.
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Until the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for Common Stock, outstanding as
of the Record Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Rights 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 Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on December 21, 2008 (the "Expiration Date").
The Purchase Price payable, and the number of one one-thousandths of a
share of Preferred Stock or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for or purchase
shares of Preferred Stock at a price, or securities convertible into 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 or assets (excluding regular periodic cash
dividends paid or dividends payable in Preferred Stock) or of subscription
rights or warrants (other than those referred to in (ii) above).
The number of outstanding Rights and the number of one one-thousandths of a
share of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in the Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
In the event that following a Stock Acquisition Date (the date of public
announcement that an Acquiring Person has become such) the Company is acquired
in a merger or other business combination transaction or more than 50% of its
consolidated assets or earning power are sold, proper provision will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right (the "Flip-Over Right").
In the event that a person (other than an Exempt Person) becomes an
Acquiring Person, proper provision shall be made so that each holder of a Right
(other than the Acquiring Person and its affiliates and associates) will
thereafter have the right to receive upon exercise that number of shares of
Common Stock (or, under certain circumstances, cash, other equity securities or
property of the Company) having a market value equal to two times the Purchase
Price of the Rights (the "Flip-In Right"). Upon the occurrence of the foregoing
event giving rise to the exercisability of the Rights, any Rights that are or
were at any time owned by an Acquiring Person shall become void.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. Upon exercise of the Rights, no fractional shares of
Preferred Stock will be issued other than fractions which are integral multiples
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of one one-thousandth of a share of Preferred Stock; cash will be paid in lieu
of fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock.
At any time prior to the earlier to occur of (i) 5:00 p.m., New York City
time on the 10th day after the Shares Acquisition Date or (ii) the expiration of
the Rights, the Company may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right (the "Redemption Price"); provided, that (i) if the
Board of Directors authorizes redemption on or after the time a person becomes
an Acquiring Person, then such authorization must be by Board Approval (as
hereinafter defined) and (ii) the period for redemption may, upon Board
Approval, be extended by amending the Rights Agreement. The term "Board
Approval" means the approval of a majority of the directors of the Company.
Immediately upon any redemption of the Rights described in this paragraph, 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 terms of the Rights may be amended by the Board of Directors without
the consent of the holders of the Rights at any time and from time to time
provided that such amendment does not adversely affect the interests of the
holders of the Rights. In addition, during any time that the Rights are subject
to redemption, the terms of the Rights may be amended by Board Approval,
including an amendment that adversely affects the interests of the holders of
the Rights, without the consent of the holders of Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Preferred Stock (or other consideration).
DESCRIPTION OF PREFERRED STOCK
Each one-thousandth of a share of the Preferred Stock ("Preferred Share
Fraction") that may be acquired upon exercise of the Rights will be
nonredeemable and subordinate to any other shares of preferred stock that may be
issued by the Company.
Each Preferred Share Fraction will have a minimum preferential quarterly
dividend rate of $0.01 per Preferred Share Fraction but will, in any event, be
entitled to a dividend equal to the per share dividend declared on the Common
Stock.
In the event of liquidation, the holder of a Preferred Share Fraction will
receive a preferred liquidation payment equal to the greater of $0.01 per
Preferred Share Fraction or the per share amount paid in respect of a share of
Common Stock.
Each Preferred Share Fraction will have one vote, voting together with the
Common Stock. The holders of Preferred Share Fractions, voting as a separate
class, shall be entitled to elect two directors if dividends on the Preferred
Stock are in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each Preferred Share Fraction will be
entitled to receive the per share amount paid in respect of each share of Common
Stock.
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The rights of holders of the Preferred Stock to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the economic value of one Preferred Share Fraction that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of the Company's Common Stock.
Additional information regarding the Rights is set forth in the rights
Agreement which is filed herewith as Exhibit 1 and incorporated herein by
reference.
ITEM 2. EXHIBITS
The following exhibits to this Registration Statement on Form 8-A are
either filed herewith or are incorporated by reference from the documents
specified, which have been filed with the Securities and Exchange Commission.
* 1. Rights Agreement, dated December 7, 1998, between the Company
and American Stock Transfer & Trust Company, as Rights Agent.
* 2. Form of Rights Certificate (attached as Exhibit B to the Rights
Agreement filed as Exhibit 1 hereto).
* 3. Articles of Amendment to the Articles of Incorporation of the
Company, dated December 7, 1998, designating the Series A Junior
Participating Preferred Stock.
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* filed herewith
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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, thereunto duly authorized.
Dated: January 8, 1999
FRIEDE GOLDMAN INTERNATIONAL INC.
/s/ James A. Lowe, III
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James A. Lowe, III
General Counsel and Secretary
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FRIEDE GOLDMAN INTERNATIONAL INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF DECEMBER 7, 1998
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TABLE OF CONTENTS
Section 1. Certain Definitions............................................ 1
Section 2. Appointment of Rights Agent.................................... 8
Section 3. Issue of Right Certificates.................................... 8
Section 4. Form of Right Certificates..................................... 10
Section 5. Countersignature and Registration.............................. 11
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates................................................... 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.. 13
Section 8. Cancellation and Destruction of Right Certificates............. 15
Section 9. Availability of Preferred Shares............................... 16
Section 10. Preferred Shares Record Date................................... 18
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights......................................................... 18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..... 32
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.......................................................... 33
Section 14. Fractional Rights and Fractional Shares........................ 39
Section 15. Rights of Action............................................... 41
Section 16. Agreement of Right Holders..................................... 41
Section 17. Right Certificate Holder Not Deemed a Stockholder.............. 42
Section 18. Concerning the Rights Agent.................................... 43
Section 19. Merger or Consolidation or Change of Name of Rights Agent...... 44
Section 20. Duties of Rights Agent......................................... 45
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Section 21. Change of Rights Agent......................................... 49
Section 22. Issuance of New Right Certificates............................ 50
Section 23. Redemption.................................................... 51
Section 24. Exchange...................................................... 52
Section 25. Notice of Certain Events...................................... 54
Section 26. Notices....................................................... 56
Section 27. Supplements and Amendments.................................... 57
Section 28. Successors.................................................... 58
Section 29. Benefits of this Agreement.................................... 58
Section 30. Determination and Actions by the Board of Directors........... 58
Section 31. Severability.................................................. 59
Section 32. Governing Law................................................. 59
Section 33. Counterparts.................................................. 59
Section 34. Descriptive Headings.......................................... 59
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RIGHTS AGREEMENT
This Agreement, dated as of December 7, 1998 ("Agreement"), between Friede
Goldman International Inc., a Mississippi corporation (the "Company"), and
American Stock Transfer & Trust Company, as rights agent (the "Rights Agent").
R E C I T A L S:
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WHEREAS, at a meeting of the Board of Directors of the Company duly called
and held on December 4, 1998, at which a quorum was present and acting
throughout, such Board of Directors has authorized and declared a dividend of
one preferred share purchase right (a "Right") for each share of Common Stock
(as such term is hereinafter defined) of the Company outstanding at the close of
business on December 21, 1998 (the "Record Date"), each Right representing the
right to purchase one one-thousandth of a Preferred Share, upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the shares of Common Stock
then outstanding, but shall not include an
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Exempt Person; provided, however, that if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person" has become such inadvertently (including, without
limitation, because (i) such Person was unaware that it beneficially owned
a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (ii) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but was unaware of the consequences of
such Beneficial Ownership under this Agreement) and without any intention
of changing or influencing control of the Company, and such Person, as
promptly as practicable after being advised of such determination divested
or divests himself or itself of Beneficial Ownership of a sufficient number
of shares of Common Stock so that such Person would no longer be an
Acquiring Person, then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Agreement.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
as the result of an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the
Common Stock of the Company then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of 15% or more of the Common Stock
of the Company then outstanding by reason of the share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Stock of the Company, then such
Person shall be deemed to be an "Acquiring Person" unless upon the
consummation of the acquisition of such additional shares of Common Stock
such Person does not own 15% or more of the shares of Common Stock then
outstanding.
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(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
(c) "Associate" shall have the meaning ascribed to such term in Rule
l2b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (I) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (II) securities which such Person
has a right to acquire upon the exercise of Rights at any time prior
to the time a Person becomes an
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Acquiring Person; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security by reason of such an agreement, arrangement or understanding
if the agreement, arrangement or understanding to vote such security
(a) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act (as such term is
hereinafter defined) and (b) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report);
or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(d)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then issued and outstanding which such Person
would be deemed to own beneficially hereunder.
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(e) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in Mississippi or New York are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M., New
York, New York time, on such date; provided, however, that, if such date is
not a Business Day, it shall mean 5:00 P.M., New York, New York time, on
the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company shall mean
the shares of common stock, par value $0.01 per share, of the Company.
"Common Stock" when used with reference to any Person other then the
Company shall mean the capital stock (or, in the case of an unincorporated
entity, the equivalent equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned
Person.
(h) "Common Stock equivalent" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) "Company" shall have the meaning set forth in the preamble hereof.
(j) "current per share market price" shall have the meaning set forth
in Section 11(d) hereof.
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(m) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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(o) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(p) "Exempt Person" shall mean (i) the Company or any Subsidiary (as
such term is hereinafter defined) of the Company or any employee benefit
plan of the Company, (ii) J. L. Holloway, his lineal descendants and
ascendants, heirs, executors or other legal representatives and any trusts
established for the benefit of the foregoing, or any other person or entity
in which the foregoing persons or entities are at the time of determination
the direct record and beneficial owners of all outstanding voting
securities (each a "Holloway Stockholder") but only if the aggregate number
of shares of Common Stock Beneficially Owned by the Holloway Stockholders
do not exceed the sum of (A) the aggregate number of shares of Common Stock
Beneficially Owned by the Holloway Stockholders held on the date hereof and
(B) 1% of the shares of Common Stock of the Company then outstanding, or
(iii) any Person that is not a Holloway Stockholder but who or which is the
Beneficial Owner of Common Stock Beneficially Owned by a Holloway
Stockholder (a "Second Tier Stockholder"), but only if the shares of Common
Stock otherwise Beneficially Owned by such Second Tier Stockholder
("Second Tier Holder Shares") do not exceed the sum of (A) such holder's
Second Tier Holder Shares held on the date hereof and (B) 1% of the shares
of Common Stock of the Company then outstanding. Notwithstanding the
foregoing, in the event of any increase in the number of shares of Common
Stock Beneficially Owned by a Holloway Stockholder or a Second Tier
Stockholder or any decrease in the number of shares of Common Stock
outstanding resulting from an event specified in Section 25, any Person who
is an Exempt Person immediately prior to such event shall continue to be an
Exempt Person following such event.
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(q) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Nasdaq" shall mean the National Association of Securities
Dealers, Inc. Automated Quotations System.
(s) "NYSE" shall mean the New York Stock Exchange, Inc.
(t) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership, limited partnership or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(u) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company
having the rights and preferences set forth in the form of Articles of
Amendment to the Company's Articles of Incorporation attached to this
Agreement as Exhibit A.
(v) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
(w) "Record Date" shall have the meaning set forth in the second
paragraph hereof.
(x) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(y) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(z) "Rights Agent" shall have the meaning set forth in the preamble
hereof.
(aa) "Right" shall have the meaning set forth in the first recital of
this Agreement.
(ab) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(ac) "Section 11(a)(iii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
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(ad) "Security" shall have the meaning set forth in Section 11(d)
hereof.
(ae) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(af) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(ag) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ah) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(ai) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall, prior to the Distribution Date, also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
tenth day after the Stock Acquisition Date or (ii) the close of business on the
tenth business day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person of, or of the
first public announcement of the intention of any Person to commence, a tender
or exchange offer the consummation of which would result in any Person becoming
an Acquiring Person (including any
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such date which is after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y)
the Rights will be transferable only in connection with the transfer of Common
Stock. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, at the
expense of the Company, send) by first-class, insured, postage prepaid mail, to
each record holder of 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, in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right for each share of Common Stock so
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), 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. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Stock
outstanding on the
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Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Stock represented thereby.
(c) Certificates for Common Stock which become outstanding (including,
without limitation, reacquired Common Stock referred to in the last sentence of
this paragraph (c) that are subsequently issued or distributed by the Company)
after the Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of December 7,
1998 between Friede Goldman International Inc. and American Stock Transfer
& Trust Company, as rights agent (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 Friede Goldman International
Inc. Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed or be evidenced by separate certificates and
will no longer be evidenced by this certificate. Friede Goldman
International Inc. will mail to the holder of this certificate a copy of
the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights
Agreement, Rights owned by or transferred to any Person who becomes an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), and certain transferees thereof, will
become null and void and will no longer be transferable.
With respect to such certificate containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby. In
the event that the Company purchases or acquires any Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed canceled and
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retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11, 13 and 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-thousandths of a
Preferred Share as shall be set forth therein at the price per one one-
thousandth of a Preferred Share set forth therein, but the number of such one
one-thousandths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and
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delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificates although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates
entitling the registered holder to purchase a like number of one one-thousandths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
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Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon, the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the earlier of
the Redemption Date and the Final Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein), in whole or in part, at
any time after the Distribution Date, upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent, together with
payment of the
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Purchase Price for each one one-thousandth of a Preferred Share as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on December 21, 2008 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption Date") and
(iii) the time at which such Rights are exchanged as provided in Section 24
hereof.
(b) The Purchase Price for each one one-thousandth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $75, and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof (the "Purchase Price") and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) of this Section 7.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes any such transfer agent to comply with all
such requests, or (B) requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent of the Preferred Shares
with such depositary agent) and the Company hereby directs such depositary agent
to comply with such request; (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance
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with Section 14 hereof; (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder; and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) Except as otherwise provided herein, in case the registered holder of
any Right Certificate shall exercise less than all the Rights evidenced thereby,
a new Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the provisions
of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company
shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of
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this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right Certificates
to the Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and, in such case, shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Preferred Shares. (a) The Company covenants
and agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(b) So long as the Preferred Shares (and, following the time that a Person
becomes an Acquiring Person, shares of Common Stock and other securities)
issuable upon the exercise of Rights may be listed or admitted to trading on
Nasdaq or listed on any other national securities exchange or quotation system,
the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed or
admitted to trading on Nasdaq or listed on any other exchange or quotation
system upon official notice of issuance upon such exercise.
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(c) From and after such time as the Rights become exercisable, the Company
shall use its best efforts, if then necessary to permit the issuance of
Preferred Shares (and following the time that a Person first becomes an
Acquiring Person, shares of Common Stock and other securities) upon the exercise
of Rights, to register and qualify such Preferred Shares (and following the time
that a Person first becomes an Acquiring Person, shares of Common Stock and
other securities) under the Securities Act and any applicable state securities
or "Blue Sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer
exercisable for such securities and the Final Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective.
(d) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery
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of certificates or depositary receipts for the Preferred Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
(e) The Company agrees to provide to the Rights Agent, immediately
following the later to occur of an event described in Section 11(a)(i)(B) or
Section 13 hereof or the Distribution Date, an opinion of counsel acceptable to
the Rights Agent that the shares of Common Stock underlying the Rights have been
or are being properly registered under the Securities Act and all securities or
"blue sky" laws of the various states, as applicable, or in the alternative, the
Rights are not subject to the registration under the Securities Act and/or any
securities or "blue sky" laws of the various states.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights
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evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares or other securities
or property covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Share transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision,
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combination or reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Sections 23 and 24 of this Agreement, in the event any
Person becomes an Acquiring Person, then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to such
Person becoming an Acquiring Person multiplied by the number of one one-
thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such Person becoming an Acquiring Person, whether or
not such Right was then exercisable, and (B) each holder of a Right, except
as otherwise provided in this Section 11(a)(ii) and Subsection 11(a)(iii)
hereof, shall thereafter have the right to receive, upon exercise at a
price equal to the Purchase Price (as so adjusted), in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of
shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of one one-
thousandths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share market price
of the Company's Common Stock (determined pursuant to Section 11(d) hereof)
on the date such Person became an Acquiring Person; provided, however, that
the Purchase Price and the number of shares of Common Stock so receivable
upon exercise of a Right shall thereafter be subject to further adjustment
as appropriate in accordance with Section 11(f) hereof. Notwithstanding
anything in this Agreement to the contrary, however, from and after the
time (the "invalidation time") when any Person first becomes an Acquiring
Person, any Rights that are beneficially owned by
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(x) any Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the invalidation time or (z) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the invalidation time
pursuant to either (I) a transfer from the Acquiring Person to holders of
its equity securities or to any person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(II) a transfer which the Board of Directors has determined is part of a
plan, arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent transferees of
such Persons, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii)
are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the invalidation time,
no Right Certificate shall be issued pursuant to Section 3 or Section 6
hereof that represents Rights that are or have become void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the
Rights Agent that represents Rights that are or have become void pursuant
to the provisions of this paragraph shall be canceled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii).
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Notwithstanding the occurrence of an adjustment in accordance with this
Section 11(a)(ii), the Rights (other than those that have been invalidated
pursuant to this Section 11(a)(ii)), shall remain subject to redemption
pursuant to Section 23 hereof on the terms set forth herein.
(iii) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the
subparagraph (ii) of this Section 11(a), the Company shall take all such
action as may be necessary to authorize additional shares of Common Stock
for issuance upon exercise of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as may be
necessary to authorize such additional shares of Common Stock the Company
shall, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine
the excess of (1) the value of the shares of Common Stock issuable upon the
exercise of a Right in accordance with the foregoing subparagraph (ii) (the
"Current Value") over (2) the then current Purchase Price multiplied by the
number of one one-thousandths of Preferred Shares for which a Right was
exercisable immediately prior to the time that the Acquiring Person became
such (such excess, the "Spread"), and (B) with respect to each Right (other
than Rights which have become void pursuant to Section 11(a)(ii)), make
adequate provision to substitute for the shares of Common Stock issuable in
accordance with subparagraph (ii) upon exercise of the Right and payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Preferred Shares or other equity securities of the Company
(including, without limitation, shares or fractions of shares of preferred
stock
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which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the shares of Common Stock, are deemed
in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock (such shares of preferred stock and
shares or fractions of shares of preferred stock are hereinafter referred
to as "Common Stock equivalents")), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing, having a value
which, when added to the value of the shares of Common Stock actually
issued upon exercise of such Right, shall have an aggregate value equal to
the Current Value (less the amount of any reduction in the Purchase Price),
where such aggregate value has been determined by the Board of Directors
upon the advice of a nationally recognized investment banking firm selected
in good faith by the Board of Directors; provided, however, that if the
Company shall not make adequate provision to deliver value pursuant to
clause (B) above within 30 days following the date that the Acquiring
Person became such (the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, to the extent permitted by applicable law
and any material agreements then in effect to which the Company is a party,
upon the surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent available), and
then, if necessary, such number of fractions of Preferred Shares (to the
extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If, upon the date any Person
becomes an Acquiring Person, the Board of Directors shall determine in good
faith that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights, then,
if the Board of Director so elects, the 30-day period set forth above may
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be extended to the extent necessary, but not more than 90 days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
30-day period, as it may be extended, is herein called the "Substitution
Period"). To the extent that the Company determines that some action need
be taken pursuant to the second and/or third sentence of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii)
hereof and the last sentence of this Section 11(a)(iii) hereof, that such
action shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the shares of
Common Stock shall be the current per share market price (as determined
pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the
per share or fractional value of any "Common Stock equivalent" shall be
deemed to equal the current per share market price of the Common Stock. The
Board of Directors of the Company may, but shall not be required to,
establish procedures to allocate the right to receive shares of Common
Stock upon the exercise of the Rights among holders of Rights pursuant to
this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar
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days after such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and
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in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price that would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d)(i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed
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to be the average of the daily closing prices per share of such Security for the
30 consecutive Trading Days immediately prior to such date; provided, however,
that in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification then, and in each such case, the current per share market price
shall be appropriately adjusted to reflect the current market price per share
equivalent of such Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way in either case, as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NYSE or, if the Security is
not listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use, or, if on any such date
the Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the
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Security is not listed or admitted to trading on any national securities
exchange on which the security is listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of a computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in accordance with the
method set forth in Section 11(d)(i). If the Preferred Shares are not publicly
traded, the "current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof), multiplied by 100. If neither the Common Shares nor the
Preferred Shares is publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a
Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which require such
adjustment and (ii) the date of the expiration of the right to exercise any
Rights.
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(f) If, as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a Preferred Share (calculated to the nearest one ten-thousandth of a Preferred
Share) obtained by (A) multiplying (x) the number of one one-thousandths of a
share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (B) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in substitution for any adjustment
in the number of
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one one-thousandths of a Preferred Share purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-thousandths of a Preferred
Share for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, such record date shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall he entitled
after such adjustment. Right Certificates to be so distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
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(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a Preferred Share issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-thousandths of
a Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-thousandth of the then par value, if any, of the
Preferred Shares or other shares of capital stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares or other such shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly
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required by this Section 11, as and to the extent that it, in its sole
discretion, shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of any Preferred
Shares at less than the current per share market price, issuance wholly for cash
of Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, dividends on Preferred Shares payable in
Preferred Shares or issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock) into
a greater or lesser number of shares of Common Stock, then in any such case the
Rights associated with each share of Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each share of Common Stock immediately prior to such event by a fraction, of
which the numerator shall be equal to the number of shares of Common Stock
outstanding immediately before such event of which the denominator is the number
of shares of Common Stock outstanding immediately after such event. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such
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adjustment, (b) file with the Rights Agent and with each transfer agent for the
Common Stock or the Preferred Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance with
Section 23 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be
obligated or responsible for calculating any adjustment nor shall it be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event, directly or indirectly, at any time after a
Person has become an Acquiring Person, (i) the Company shall consolidate with,
or merge with and into, any other Person, (ii) any Person shall consolidate with
the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Stock shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person (other than the Company or one or more of its wholly-owned
Subsidiaries), then, and in each such case, proper provision shall be made so
that (A) each holder of a Right (other than Rights that have become void
pursuant to Section 11(a)(ii)) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of validly issued, fully paid and non-
assessable and freely
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tradeable shares of Common Stock of the Principal Party (as defined herein) not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by (I) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable and dividing that product by (II) 50% of the
then current per share market price of the Common Stock of such Principal Party
(determined in accordance to Section 11(d)(i) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; provided that the
Purchase Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
Section 11(f) of this Agreement to reflect any events occurring in respect of
such Principal Party after the date of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such Principal Party; and (D)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9 hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights; provided that, upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price as provided
in this Section 13(a), such cash, shares, rights, warrants and other property
which such holder would have been entitled to receive had such holder, at the
time of such transaction, owned
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the Common Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property.
(b) As used in this Section 13, "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or (ii) of
the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which the shares of Common Stock are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (iii) of the
first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined,
whichever of such Persons as is the issuer of Common Stock having the
greatest aggregate market value of shares outstanding; provided, however,
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that in any such case described in the foregoing clause (b)(i) or (b)(ii),
if the Common Stock of such Person is not at such time or has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or
(2) if such Person is a Subsidiary, directly or indirectly, of more than
one Person, and the Common Stocks of all of such persons have been so
registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Stock having the greatest aggregate market
value of shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
clauses (1) and (2) above shall apply to each of the owners having an
interest in the venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13
in the same ratio as its interest in such Person bears to the total of such
interests.
(c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Agreement as the same shall have
been assumed by the Principal Party
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pursuant to Sections 13(a) and (b) hereof and providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the Securities
Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its
best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its best efforts to cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the Final
Expiration Date, and similarly comply with applicable state securities
laws;
(ii) use its best efforts, if the Common Stock of the Principal Party
shall be listed or admitted to trading on the New York Stock Exchange or on
another national securities exchange, to list or admit to trading (or
continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Stock of the Principal Party shall not be
listed or admitted to trading on the New York Stock Exchange or a national
securities exchange, to cause the Rights and the securities receivable upon
exercise of the Rights to be reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
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(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to
purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current per share market
price per share thereof (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then current per share market price, or (ii) providing
for any special payment, tax or similar provision in connection with the
issuance of the Common Stock of such Principal Party pursuant to the provisions
of Section 13, then, in such event, the Company hereby agrees with each holder
of Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time after a
Person first becomes an Acquiring Person enter into any transaction of the type
contemplated by any of clauses (i) - (iii) of Section 13(a) hereof if (x) at the
time of or immediately after such consolidation,
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merger, sale, transfer or other transaction there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale, transfer of other transaction, the
stockholders of the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates or Associates or
(z) the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case, as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Rights are not
listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities
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exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by Nasdaq
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-thousandth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For the purposes
of this Section 14(b), the current market value of a Preferred Share shall be
the closing price of a Preferred Share (as determined pursuant to the second
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sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock upon the exercise or exchange of Rights. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole share of Common Stock (as
determined in accordance with Section 14(a) hereof) for the Trading Day
immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common 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 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
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this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right thus:
(a) prior to the Distribution Date, the Rights will be 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 or agency of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of transfer;
and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered on the registry books of
the Company as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
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Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses
(including attorney's fees) of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnification provided for hereunder
shall survive the expiration of the Rights and the termination of this
Agreement.
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(b) The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof. Notwithstanding anything in this Agreement to the contrary,
in no event shall the Rights Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust powers of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor
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Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound, and no implied duties or
obligations shall be read into this Agreement against the Rights Agent:
(a) Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established
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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 my one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void in
accordance with Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in
Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
that
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would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice that
such change or adjustment is required); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, 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 shall not be liable for any action taken
or suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for
any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in
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such application (which date shall not be less than five Business Days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action
to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lead money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has not been completed to certify the
holder is not an Acquiring Person (or an Affiliate or Associate thereof),
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
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(k) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(l) The Rights Agent shall not be required to take notice or be deemed
to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate)
under this Agreement unless and until the rights Agent shall be
specifically notified in writing by the Company of such fact, event or
determination, and all notices shall be effective if given in accordance
with Section 26 hereof , and in the absence of such notice the Rights Agent
may conclusively assume that no such event or condition exists.
(m) The Rights Agent shall have no responsibility to the Company, any
holders of Rights or any holders of Common Stock for interest or earnings
on any monies held by the Rights Agent pursuant to this Agreement.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Shares by registered or certified mail, and, at
the expense of the Company, to the holders of the Right Certificates by first-
class mail. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
or Preferred Shares by registered or
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certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate or the retiring Rights Agent may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court shall be a
corporation organized and doing business under the laws of the United States or
of the State of New York so long as such corporation is authorized to do
business as a banking institution in the State of New York, 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 shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed and the duties and
obligations of the retiring Rights Agent shall cease and terminate; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock or Preferred Shares, and mail a notice thereof
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in writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Stock following the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date, the
Company may with respect to shares of Common Stock so issued or sold pursuant to
(i) the exercise of stock options, (ii) under any employee plan or arrangement,
(iii) upon the exercise, conversion or exchange of securities, notes or
debentures issued by the Company or (iv) a contractual obligation of the Company
in each case existing prior to the Distribution Date, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale.
Section 23. Redemption. (a) The Board of Directors of the Company may,
at its option, at any time prior to the Close of Business on the 10th business
day after the Stock Acquisition Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The
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redemption of the Rights by the Board of Directors of the Company may be made
effective at such time, on such basis and with such conditions as the Board of
Directors of the Company, in its sole discretion may establish. The Company may,
at its option, pay the Redemption Price in cash, shares of Common Stock (based
on the current market price of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23 (or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after such action of the
Board of Directors of the Company ordering the redemption of the Rights, the
Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Stock prior to the Distribution Date.
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Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after any Person first becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company shall not
be empowered to effect such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 24(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 24(a). The
exchange of the Rights by the Board of Directors may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights hold by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall
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mail a notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights. In the event the Company
shall, after good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Stock, the Company shall
substitute, for each share of Common Stock that would otherwise be issuable upon
exchange of a Right, a number of Preferred Shares or fraction thereof such that
the current per share market price of one Preferred Share multiplied by such
number or fraction is equal to the current per share market price of one share
of Common Stock as of the date of issuance of such Preferred Shares or fraction
thereof.
(d) The Company shall not be required to issue fractions of a share of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such shares of fractional Common Stock would otherwise be
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issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this Section 24(d),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall at
any time after the earlier of the Distribution Date and the Stock Acquisition
Date propose (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Preferred Shares rights or warrants to subscribe for
or to purchase any additional Preferred Shares or shares of stock of any class
or any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision or combination of outstanding Preferred Shares), (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any other
Person, (v) to effect the liquidation, dissolution or winding up of the Company,
or (vi) to declare or pay any dividend on the Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in Common
Stock), then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
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dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Stock and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Shares, whichever shall be the
earlier.
(b) In case the event set forth in Section 11(a)(ii) or Section 13 hereof
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock), in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
or Section 13 hereof, as the case may be.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by registered
or certified mail and deemed given upon receipt, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Friede Goldman International Inc.
525 East Capitol Street
Jackson, Mississippi 39201
Attention: Corporate Secretary
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
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Agent shall be sufficiently given or made if sent by registered or certified
mail and deemed given upon receipt, addressed (until another address is filed in
writing with the Company) as follows:
American Stock Transfer & Trust Company, as Rights Agent
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Except as otherwise provided in
this Section 27, for so long as the Rights are then redeemable, the Company may
in its sole and absolute discretion, and the Rights Agent shall if the Company
so directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of the Rights, including, without
limitation, as long as the Rights are then redeemable, to extend the period
during which the Rights may be redeemed. At any time when the Rights are no
longer redeemable, except as otherwise provided in this Section 27, the Company
may, and the Rights Agent shall, if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Rights Certificates in
order to (i) cure any ambiguity, (ii) correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) shorten or lengthen any time period hereunder, or (iv)
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable; provided that no such supplement or amendment
shall adversely affect the interests of the holders of Rights as such (other
than an
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Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such amendment may cause the rights again to become redeemable or cause the
Agreement again to become amendable other than in accordance with this sentence.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which decreases the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the Company and an
opinion of counsel reasonably acceptable to the Rights Agent which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent under this
Agreement will be effective against the Rights Agent without the execution of
such supplement or amendment by the Rights Agent.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person 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; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock).
Section 30. Determination and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to
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exercise the rights and powers specifically granted to the Board of Directors of
the Company or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors of the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights, as such,
and all other parties, and (y) not subject the Board of Directors to any
liability to the holders of the Rights.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Mississippi and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, except as to the rights and duties of the
Rights Agent which shall be governed by and construed in accordance with the
laws of the State of Mississippi.
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Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
Friede Goldman International Inc.
By: /s/ James A. Lowe, III
-------------------------------
James A. Lowe, III
General Counsel and Secretary
American Stock Transfer & Trust Company,
as Rights Agent
By: /s/ Herbert J. Lemmer
-------------------------------
Herbert J. Lemmer
Vice President
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EXHIBIT B
Form of Right Certificate
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER December 21, 2008 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Friede Goldman International 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 7, 1998 (the "Rights Agreement"),
between Friede Goldman International Inc., a Mississippi corporation (the
"Company"), and American Stock Transfer & Trust Company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., New York City, New
York time, on December 21, 2008 at the principal office of the Rights Agent, or
at the office of its successor as Rights Agent, one-thousandth of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, par value
$0.01 per share, of the Company (the "Preferred Shares") at a purchase price of
$75 (subject to adjustment as provided in the Rights Agreement) per one-
thousandth of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of one-thousandths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of December 21, 1998, based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one-thousandths of a Preferred Share which may
be purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the offices of the Rights Agent.
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This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Right Certificate (i) may be redeemed by the Company at a redemption price
of $0.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $0.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one-thousandth of a Preferred Share, which may, at the election of
the Company, be evidenced by depositary receipts), but, in lieu thereof, a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ______________, _________.
B-2
<PAGE>
FRIEDE GOLDMAN INTERNATIONAL INC.
ATTEST:
By: By:
--------------------------- -----------------------------
Name: Name:
Title: Title:
Countersigned: AMERICAN STOCK TRANSFER & TRUST
COMPANY
By:
-----------------------------
Name:
Title:
B-3
<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 onto ___________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated: __________________, __________
Signature _________________________
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution (as
defined in Securities and Exchange Commission Rule 17 Ad-15 (17 CFR 240.17
Ad-15)).
_______________________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
Signature _________________________
_______________________________________________________________________________
B-4
<PAGE>
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: Friede Goldman International Inc.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security _________________
or other identifying number _________________
______________________ _________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security _________________
or other identifying number _________________
______________________ _________________
(Please print name and address)
Dated: _____________, _________
Signature ___________________
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution (as
defined in Securities and Exchange Commission Rule 17 Ad-15 (17 CFR 240.17
Ad-15)).
B-5
<PAGE>
(Form of Reverse Side of Right Certificate -- continued)
_______________________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
Signature ___________________________
_______________________________________________________________________________
B-6
<PAGE>
Notice
The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
C-1
<PAGE>
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
FRIEDE GOLDMAN INTERNATIONAL INC.
SETTING FORTH THE TERMS OF ITS
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(PURSUANT TO SECTION 79-4-6.02(D) OF THE MISSISSIPPI
BUSINESS CORPORATION ACT)
----------------------
In accordance with the provisions of Section 79-4-6.02(d) of the
Mississippi Business Corporation Act (the "MBCA"), Friede Goldman International
Inc., a Mississippi corporation (the "Corporation"), hereby amends the
Corporation's Articles of Incorporation (the "Articles of Incorporation") to set
forth the terms of the Corporation's Series A Junior Participating Preferred
Stock:
WHEREAS, pursuant to the Corporation's Articles of Incorporation, as
amended to date, the Corporation is authorized to issue up to 5,000,000 shares
of preferred stock, par value $0.01 per share (the "Preferred Stock") from time
to time, of which no shares are currently outstanding; and
WHEREAS, pursuant to the authority vested in the Board of Directors of the
Corporation (the "Board of Directors" or the "Board") in accordance with Section
79-4-6.02(d) of the MBCA and the Corporation's Articles of Incorporation, the
Board of Directors is authorized to amend the Corporation's Articles of
Incorporation to designate the number of shares of Preferred Stock to be issued,
in one or more series, and to set forth the powers, designations, preferences
and relative, participating, optional or other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof.
FIRST: The name of the corporation is Friede Goldman International Inc.
SECOND: Article FOURTH of the Corporation's Articles of Incorporation is
hereby amended and restated to read in its entirety as follows:
FOURTH: The total number of shares of all classes of capital stock which
the Corporation shall have the authority to issue is 130,000,000, of which
5,000,000 shares shall be Preferred Stock, par value $0.01 per share, and
125,000,000 shares shall be Common Stock, par value $0.01 per share.
A. Series A Junior Participating Preferred Stock.
<PAGE>
(i) Designation and Amount. The shares of such series shall be designated
as "Series A Junior Participating Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting the Series A Preferred Stock
shall be 50,000.
(ii) Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any series
of Preferred Stock of the Corporation (the "Preferred Stock") (or any
similar stock) ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, par value $0.01 per
share, of the Corporation (the "Common Stock") and of any other stock of
the Corporation ranking junior to the Series A Preferred Stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available therefor, quarterly dividends payable in cash on
the last day of January, April, July, and October in each year (each such
date being referred to herein as a "Dividend Payment Date"), commencing on
the first Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (1) $10.00 and (2)
subject to the provision for adjustment hereinafter set forth, 1,000 times
the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common
Stock, declared on the Common Stock since the immediately preceding
Dividend Payment Date or, with respect to the first Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event that the Corporation shall at any time after
December 21, 1998, declare or pay any dividend on the Common Stock payable
in shares of 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 shares of
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
Preferred Stock were entitled immediately prior to such event under clause
(2) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section
(ii) immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Dividend Payment Date and
the next subsequent Dividend Payment Date, a dividend of $10.00 per share
on the Series A Preferred Stock shall nevertheless be payable, when, as and
if declared, on such subsequent Dividend Payment Date.
2
<PAGE>
(c) Dividends shall begin to accrue and be cumulative, whether or not
earned or declared, on outstanding shares of Series A Preferred Stock
from the Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the record date
for the first 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 Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
(iii) Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth and
except as otherwise provided elsewhere in the Articles of Incorporation
or required by law, each share of Series A Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters upon which the holders of
the Common Stock of the Corporation are entitled to vote. In the event the
Corporation shall at any time after December 21, 1998 declare or pay any
dividend on the Common Stock payable in shares of 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 shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) Except as otherwise provided in these Articles of Incorporation
and except as otherwise required by law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(c) Except as set forth in these Articles of Incorporation, or as
otherwise provided by law, holders of Series A Preferred Stock shall have
no special voting rights and their
3
<PAGE>
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
(iv) Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section (ii) of this
Article FOURTH are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not earned or declared, on shares
of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(1) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (as to dividends) to the Series A
Preferred Stock;
(2) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (as to dividends) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(3) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (as to dividends
and upon dissolution, liquidation or winding up) to the Series A
Preferred Stock or rights, warrants or options to acquire such junior
stock;
(4) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (a) of this Section (iv), purchase or otherwise acquire such
shares at such time and in such manner.
4
<PAGE>
(v) Reacquired Shares. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their retirement become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to any conditions and restrictions on issuance set forth herein.
(vi) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made
(a) to the holders of the Common Stock or of shares of any other stock of
the Corporation ranking junior, upon liquidation, dissolution or winding
up, to the Series A Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received $10.00 per share,
plus an amount equal to accrued and unpaid dividend distributions thereon,
whether or not earned or declared, to the date of such payment, provided
that the holders of shares of Series A Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount
to be distributed per share to holders of shares of Common Stock, or (b) to
the holders of shares of stock ranking on a parity upon liquidation,
dissolution or winding up with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.
In the event, however, that there are not sufficient assets available to
permit payment in full of the Series A Preferred Stock liquidation
preference and the liquidation preferences of all other classes and series
of stock of the Corporation, if any, that rank on a parity with the Series
A Preferred Stock in respect thereof, then the assets available for such
distribution shall be distributed ratably to the holders of the Series A
Preferred Stock and the holders of such parity shares in the proportion to
their respective liquidation preferences. In the event the Corporation
shall at any time after December 21, 1998 declare or pay any dividend on
the Common Stock payable in shares of 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 shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (a) 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.
(vii) Consolidation, Merger, etc. In the case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are converted into, exchanged for or
changed into other stock or securities, cash and/or any property, then in
any such case each share of Series A Preferred Stock shall at the same time
be similarly converted into, exchanged for or changed into an amount per
share (subject to the provision for adjustment hereinafter set forth) equal
to 1,000 times the aggregate
5
<PAGE>
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is converted, exchanged or converted. In the event the Corporation
shall at any time after December 21, 1998 declare or pay any dividend on
the Common Stock payable in shares of 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 shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the conversion, exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(viii) No Redemption. The shares of Series A Preferred Stock shall not
be redeemable from any holder.
(ix) Rank. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the Corporation, junior to all other series of
Preferred Stock and senior to the Common Stock.
(x) Amendment. If any proposed amendment to the Articles of Incorporation
would alter, change or repeal any of the preferences, powers or special
rights given to the Series A Preferred Stock so as to affect the Series A
Preferred Stock adversely, then the holders of the Series A Preferred Stock
shall be entitled to vote separately as a class upon such amendment, and
the affirmative vote of two-thirds of the outstanding shares of the Series
A Preferred Stock, voting separately as a class, shall be necessary for the
adoption thereof, in addition to such other vote as may be required by the
Mississippi Business Corporation Act.
(xi) Fractional Shares. Series A Preferred Stock may be issued in fractions
of a share that shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
(B) Preferred Stock.
(i) One or more additional series of Preferred Stock may be issued from
time to time in such amounts as may be determined by the Board of
Directors. The voting powers, designations, preferences and relative,
participating, optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any, of the
Preferred Stock of each series shall be such as are fixed by the Board of
Directors, the authority so to do being hereby expressly granted, and as
are stated and expressed in Articles of Amendment to these Articles of
Incorporation adopted by the Board of Directors providing for the issue of
such series of Preferred Stock (herein called an "Preferred Stock
Amendment"). The Preferred Stock Amendment as to any series shall (a)
establish the number of shares constituting, and
6
<PAGE>
the distinctive designation of, that series, (b) fix the dividend rate, if
any, of the shares of such series, the payment dates for dividends on
shares of such series and the date or dates, or the method of determining
the date or dates, if any, from which dividends on shares of such series
shall be cumulative, (c) fix the amount or amounts payable on shares of
such series upon voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, (d) state the price or prices
or rate or rates, and adjustments, if any, at which, the time or times and
the terms and conditions upon which, the shares of such series may be
redeemed at the option of the Corporation or at the option of the holder or
holders of shares of such series or upon the occurrence of a specified
event, and state whether such shares may be redeemed for cash, property or
rights, including securities of the Corporation or another entity; and such
Preferred Stock Amendment may (1) limit the number of shares of such series
that may be issued, (2) provide for a sinking fund for the purchase or
redemption of shares of such series and specify the terms and conditions
governing the operations of any such fund, (3) grant voting rights to the
holders of shares of such series, provided that each share shall not have
more than one vote per share, (4) impose conditions or restrictions upon
the creation of indebtedness of the Corporation or upon the issuance of
additional Preferred Stock or other capital stock ranking on a parity
therewith, or prior thereto, with respect to dividends or distribution of
assets upon liquidation, (5) impose conditions or restrictions upon the
payment of dividends upon, or the making of other distributions to, or the
acquisition of, shares ranking junior to the Preferred Stock or to any
series thereof with respect to dividends or distributions of assets upon
liquidation, (6) state the time or times, the price or prices or the rate
or rates of exchange and other terms, conditions and adjustments upon which
shares of any such series may be made convertible into, or exchangeable
for, at the option of the holder or the Corporation or upon the occurrence
of a specified event, shares of any other class or classes or of any other
series of Preferred Stock or any other class or classes of stock or other
securities of the Corporation, and (7) grant such other special rights and
impose such qualifications, limitations or restrictions thereon as shall be
fixed by the Board of Directors, to the extent not inconsistent with this
Article FOURTH and to the full extent now or hereafter permitted by the
laws of the State of Mississippi.
(ii) Except as by law expressly provided, or except as may be provided in
any Preferred Stock Amendment, the Preferred Stock shall have no right or
power to vote on any question or in any proceeding or to be represented at,
or to receive notice of, any meeting of shareholders of the Corporation.
(iii) Preferred Stock that is redeemed, purchased or retired by the
Corporation shall assume the status of authorized but unissued Preferred
Stock and may thereafter, subject to the provisions of any Preferred Stock
Amendment providing for the issue of any particular series of Preferred
Stock, be reissued in the same manner as authorized but unissued Preferred
Stock.
(C) Common Stock.
7
<PAGE>
All shares of the Common Stock of the Corporation shall be identical
and except as otherwise required by law or as otherwise provided in the
Directors' Amendment, if any, adopted by the Board of Directors with
respect to any series of Preferred Stock, the holders of the Common Stock
shall exclusively possess all voting power, and each share of Common Stock
shall have one vote.
THREE: These Articles of Amendment to the Corporation's Articles of
Incorporation are adopted as of the date set forth below.
FOUR: These Articles of Amendment to the Corporation's Articles of
Incorporation have been duly adopted by the Board of Directors of the
Corporation pursuant to the authority vested in such board in accordance with
the provisions of the Mississippi Business Corporation Act and the Corporation's
Articles of Incorporation.
IN WITNESS WHEREOF, these Articles of Amendment to the Corporation's
Articles of Incorporation have been executed on behalf of the Corporation by its
Chairman of the Board, President and Chief Executive Officer and attested by its
Secretary this 7th day of December 1998.
/s/ J. L. Holloway
------------------------------------
J. L. Holloway
Chairman of the Board, President and
Chief Executive Officer
Attest: /s/ James A. Lowe, III
--------------------------
James A. Lowe, III
General Counsel and Secretary
8
