UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FREEPORT-McMoRan SULPHUR INC.
(Exact name of registrant as specified in its charter)
Delaware 72-1392855
(State of incorporation (I.R.S. Employer
or organization) Identification Number)
1615 Poydras Street 70112
New Orleans, Louisiana
(Address of principal (Zip code)
executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
to be so registered on which each class is
to be registered
Preferred Stock Purchase Rights New York Stock Exchange
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General Instruction
A.(c)(1), please check the following box. [ ]
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneous with the effectiveness
of a concurrent registration statement under the Securities Act of 1933
pursuant to General Instruction A.(c)(2), please check the following box.[ ]
Securities to be registered pursuant to Section 12(g) of the Act:
None
Item 1. Description of Securities to be Registered
On December 16, 1997, the Board of Directors of Freeport-McMoRan
Sulphur Inc., a Delaware corporation (the "Company"), declared a dividend
payable December 22, 1997 of one right (a "Right") for each outstanding
share of common stock, $.01 par value ("Common Stock"), of the Company
held of record at the close of business on December 19, 1997 (the "Record
Time"), or issued thereafter and prior to the Separation Time (as here-
inafter defined) and thereafter pursuant to options and convertible
securities outstanding at the Separation Time. The Rights will be issued
pursuant to a Stockholder Protection Rights Agreement, dated as of
December 17, 1997 (the "Rights Agreement"), between the Company and
Mellon Securities Trust Company as Rights Agent (the "Rights Agent").
Each Right entitles its registered holder to purchase from the Company,
after the Separation Time, one one-hundredth of a share of Participating
Preferred Stock, $.01 par value ("Participating Preferred Stock"), for
$25.00 (the "Exercise Price"), subject to adjustment.
The Rights will be evidenced by the Common Stock certificates until
the close of business on the earlier of (either hereinafter referred to
as the "Separation Time") (i) the tenth business day (or such later date
as the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Separation Time that would otherwise have
occurred) after the date on which any Person (as defined in the Rights
Agreement) commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person, as defined
below, and (ii) the tenth day after the first date (the "Flip-in Date")
of public announcement by the Company that a Person has become an
Acquiring Person, other than as a result of a Flip-over Transaction or
Event (as defined below); provided that if the foregoing results in the
Separation Time being prior to the Record Time, the Separation Time shall
be the Record Time; and provided further that if a tender or exchange
offer referred to in clause (i) is canceled, terminated or otherwise
withdrawn prior to the Separation Time without the purchase of any shares
of stock pursuant thereto, such offer shall be deemed never to have been
made. An Acquiring Person is any Person having Beneficial Ownership (as
defined in the Rights Agreement) of 15% or more of the outstanding shares
of Common Stock, which term shall not include (i) Freeport-McMoRan
Resource Partners, Limited Partnership ("FRP"), its Affiliates and
Associates, but only with respect to the shares of Common Stock
Beneficially Owned by FRP, its Affiliates and Associates at the Record
Time, (ii) the Company and any wholly-owned subsidiary of the Company,
(iii) any Person who shall become the Beneficial Owner of 15% or more of
the outstanding Common Stock solely as a result of an acquisition of
Common Stock by the Company, until such time as such Person acquires
additional Common Stock, other than through a dividend or stock split,
(iv) any Person who becomes an Acquiring Person without any plan or
intent to seek or affect control of the Company if such Person promptly
divests sufficient securities such that such 15% or greater Beneficial
Ownership ceases, or (v) any Person who Beneficially Owns shares of
Common Stock consisting solely of (A) shares acquired pursuant to the
grant or exercise of an option granted by the Company in connection with
an agreement to merge with, or acquire, the Company at a time at which
there is no Acquiring Person, (B) shares owned by such Person and its
Affiliates and Associates at the time of such grant or (C) shares,
amounting to less than 1% of the outstanding Common Stock, acquired by
Affiliates and Associates of such Person after the time of such grant.
The Rights Agreement provides that, until the Separation Time, the
Rights will be transferred with and only with the Common Stock. Common
Stock certificates issued after the Record Time but prior to the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall contain a legend incorporating by reference
the terms of the Rights Agreement (as such may be amended from time to
time). Notwithstanding the absence of the aforementioned legend,
certificates evidencing shares of Common Stock outstanding at the Record
Time shall also evidence one Right for each share of Common Stock
evidenced thereby. Promptly following the Separation Time, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed
to holders of record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as
defined in the Rights Agreement) following the Separation Time. The
Rights will expire on the earliest of (i) the Exchange Time (as defined
below), (ii) the tenth anniversary of the Record Time (iii) the date on
which the Rights are redeemed as described below and (iv) upon the merger
of the Company into another corporation pursuant to an agreement entered
into when there is no Acquiring Person (in any such case, the "Expiration
Time").
The Exercise Price and the number of Rights outstanding, or in
certain circumstances the securities purchasable upon exercise of the
Rights, are subject to adjustment from time to time to prevent dilution
in the event of a Common Stock dividend on, or a subdivision or a
combination into a smaller number of shares of, Common Stock, or the
issuance or distribution of any securities or assets in respect of, in
lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date
occurs, the Company shall take such action as shall be necessary to
ensure and provide that each Right (other than Rights Beneficially Owned
on or after the Stock Acquisition Date by the Acquiring Person or any
Affiliate or Associate thereof, or by any transferee of any of the
foregoing, which Rights shall become void) shall constitute the right to
purchase from the Company, upon the exercise thereof in accordance with
the terms of the Rights Agreement, that number of shares of Common Stock
or Participating Preferred Stock of the Company having an aggregate
Market Price (as defined in the Rights Agreement), on the date of the
public announcement of an Acquiring Person's becoming such (the "Stock
Acquisition Date") that gave rise to the Flip-in Date, equal to twice the
Exercise Price for an amount in cash equal to the then current Exercise
Price. In addition, the Board of Directors of the Company may, at its
option, at any time after a Flip-in Date and prior to the time that an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock, elect to exchange all (but not less
than all) the then outstanding Rights (other than Rights Beneficially
Owned on or after the Stock Acquisition Date by the Acquiring Person or
any Affiliate or Associate thereof, or by any transferee of any of the
foregoing, which Rights become void) 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 of the Separation Time (the
"Exchange Ratio"). Immediately upon such action by the Board of
Directors (the "Exchange Time"), the right to exercise the Rights will
terminate and each Right will thereafter represent only the right to
receive a number of shares of Common Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated under the preceding
paragraph to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares
of Participating Preferred Stock, at a ratio of one one-hundredth of a
share of Participating Preferred Stock for each share of Common Stock so
issuable.
In the event that prior to the Expiration Time the Company enters
into, consummates or permits to occur a transaction or series of
transactions after the time an Acquiring Person has become such in which,
directly or indirectly, (i) the Company shall consolidate or merge or
participate in a binding share exchange with any other Person if, at the
time of the consolidation, merger or share exchange or at the time the
Company enters into an agreement with respect to such consolidation,
merger or share exchange, the Acquiring Person controls the Board of
Directors of the Company and any term of or arrangement concerning the
treatment of shares of capital stock in such merger, consolidation or
share exchange relating to the Acquiring Person is not identical to the
terms and arrangements relating to other holders of Common Stock or
(ii) the Company shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer) assets (A) aggregating
more than 50% of the assets (measured by either book value or fair market
value) or (B) generating more than 50% of the operating income or cash
flow, 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) or to two or more such Persons which are affiliated or
otherwise acting in concert, if, at the time of such sale or transfer of
assets or at the time the Company (or any such subsidiary) enters into
an agreement with respect to such sale or transfer, the Acquiring Person
controls the Board of Directors of the Company (a "Flip-over Transaction
or Event"), the Company shall take such action as shall be necessary to
ensure, and shall not enter into, consummate or permit to occur such
Flip-over Transaction or Event until it shall have entered into a
supplemental agreement with the Person engaging in such Flip-over
Transaction or Event or the parent corporation thereof (the "Flip-over
Entity"), for the benefit of the holders of the Rights, providing, that
upon consummation or occurrence of the Flip-over Transaction or Event
(i) each Right shall thereafter constitute the right to purchase from the
Flip-over Entity, upon exercise thereof in accordance with the terms of
the Rights Agreement, that number of shares of common stock of the Flip-over
Entity having an aggregate Market Price on the date of consummation
or occurrence of such Flip-over Transaction or Event equal to twice the
Exercise Price for an amount in cash equal to the then current Exercise
Price and (ii) the Flip-over Entity shall thereafter be liable for, and
shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company
pursuant to the Rights Agreement. For purposes of the foregoing
description, the term "Acquiring Person" shall include any Acquiring
Person and its Affiliates and Associates counted together as a single
Person.
The Board of Directors of the Company may, at its option, at any
time prior to the close of business on the Flip-in Date, redeem all (but
not less than all) the then outstanding Rights at a price of $.01 per
Right (the "Redemption Price"), as provided in the Rights Agreement.
Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right
will thereafter represent only the right to receive the Redemption Price
in cash for each Right so held.
The Company and the Rights Agent may amend the Rights Agreement
without the approval of any holders of Rights (i) prior to the close of
business on the Flip-in Date, in any respect and (ii) after the close of
business on the Flip-in Date, to make any changes that the Company may
deem necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights generally or in order to
cure any ambiguity or to correct or supplement any provision which may
be inconsistent with any other provision or otherwise defective.
The holders of Rights will, solely by reason of their ownership of
Rights, have no rights as stockholders of the Company, including, without
limitation, the right to vote or to receive dividends.
The Rights will not prevent a takeover of the Company. However, the
Rights may cause substantial dilution to a person or group that acquires
15% or more of the Common Stock unless the Rights are first redeemed by
the Board of Directors of the Company. Nevertheless, the Rights should
not interfere with a transaction that is in the best interests of the
Company and its stockholders because the Rights can be redeemed on or
prior to the close of business on the Flip-in Date, before the
consummation of such transaction.
The Rights Agreement and a form of press release announcing the
declaration of the Rights are attached hereto as exhibits and are
incorporated herein by reference. The foregoing description of the
Rights is qualified in its entirety by reference to such exhibits.
Item 2. Exhibits
1. Rights Agreement, dated as of December 16, 1997, between
Freeport-McMoRan Sulphur Inc. and Mellon Securities Trust
Company, as Rights Agent.
2. Form of Certificate of Designation for the Participating
Preferred Stock, included in Exhibit A to the Rights
Agreement.
3. Forms of Rights Certificate, Assignment, and Election to
Purchase, included in Exhibit B to the Rights Agreement.
4. Summary of Stockholder Protection Rights Agreement, included
in Exhibit C to the Rights Agreement.
<PAGE>
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.
FREEPORT-McMoRan SULPHUR INC.
By: /s/Robert M. Wohleber
Robert M. Wohleber
President and Chief Executive Officer
Dated: December 17, 1997
EXHIBIT INDEX
Exhibit No. Description
1. Rights Agreement, dated as of December 16, 1997, between
Freeport-McMoRan Sulphur Inc. and Mellon Securities Trust
Company, as Rights Agent.
2. Form of Certificate of Designation for the Participating
Preferred Stock, included in Exhibit A to the Rights
Agreement.
3. Forms of Rights Certificate, Assignment, and Election to
Purchase, included in Exhibit B to the Rights Agreement.
4. Summary of Stockholder Protection Rights Agreement,
included in Exhibit C to the Rights Agreement.
EXHIBIT 1
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
December 17, 1997
between
FREEPORT-McMoRan SULPHUR INC.
and
MELLON SECURITIES TRUST COMPANY,
as Rights Agent
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
ARTICLE I. CERTAIN DEFINITIONS
1.1 Certain Definitions. . . . . . . . . . . . . . . . . 2
ARTICLE II. THE RIGHTS
2.1 Summary of Rights. . . . . . . . . . . . . . . . . . 9
2.2 Legend on Common Stock Certificates. . . . . . . . . 9
2.3 Exercise of Rights; Separation of Rights . . . . . . 10
2.4 Adjustments to Exercise Price; Number of Rights. . . 13
2.5 Date on Which Exercise is Effective. . . . . . . . . 15
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates . . . . . . . . . . . . . . . . . . . . 15
2.7 Registration, Registration of Transfer and Exchange. 16
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . . . 17
2.9 Persons Deemed Owners. . . . . . . . . . . . . . . . 18
2.10 Delivery and Cancellation of Certificates. . . . . . 18
2.11 Agreement of Rights Holders. . . . . . . . . . . . . 19
ARTICLE III. ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS
3.1 Flip-in. . . . . . . . . . . . . . . . . . . . . . . 20
3.2 Flip-over. . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV. THE RIGHTS AGENT
4.1 General. . . . . . . . . . . . . . . . . . . . . . . 24
4.2 Merger or Consolidation or Change of Name of Rights
Agent. . . . . . . . . . . . . . . . . . . . . . . . 25
4.3 Duties of Rights Agent . . . . . . . . . . . . . . . 26
4.4 Change of Rights Agent . . . . . . . . . . . . . . . 29
ARTICLE V. MISCELLANEOUS
5.1 Redemption . . . . . . . . . . . . . . . . . . . . . 30
5.2 Expiration . . . . . . . . . . . . . . . . . . . . . 31
5.3 Issuance of New Rights Certificates. . . . . . . . . 31
5.4 Supplements and Amendments . . . . . . . . . . . . . 32
5.5 Fractional Shares . . . . . . . . . . . . . . . 32
5.6 Rights of Action . . . . . . . . . . . . . . . . . . 32
5.7 Holder of Rights Not Deemed a Stockholder. . . . . . 33
5.8 Notice of Proposed Actions . . . . . . . . . . . . . 33
5.9 Notices. . . . . . . . . . . . . . . . . . . . . . . 34
5.10 Suspension of Exercisability . . . . . . . . . . . . 35
5.11 Costs of Enforcement . . . . . . . . . . . . . . . . 35
5.12 Successors . . . . . . . . . . . . . . . . . . . . . 35
5.13 Benefits of this Agreement . . . . . . . . . . . . . 35
5.14 Determination and Actions by the Board of Directors,
etc. . . . . . . . . . . . . . . . . . . . . . . . . 36
5.15 Descriptive Headings . . . . . . . . . . . . . . . . 36
5.16 Governing Law . . . . . . . . . . . . . . . . . 36
5.17 Counterparts. . . . . . . . . . . . . . . . . . 37
5.18 Severability. . . . . . . . . . . . . . . . . . 37
EXHIBITS
Exhibit A Form of Certificate of Designation for the
Participating Preferred Stock
Exhibit B Form of Rights Certificate
(Together with Form of
Election to Exercise)
Exhibit C Summary Description of the
Stockholder Protection Rights Agreement
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time
to time, this "Agreement"), dated as of December 17, 1997, between
Freeport-McMoRan Sulphur Inc., a Delaware corporation (the "Company"),
and Mellon Securities Trust Company, a New York corporation, as Rights
Agent (the "Rights Agent", which term shall include any successor Rights
Agent hereunder).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has
(a) authorized and declared a dividend of one right ("Right") in respect
of each share of Common Stock (as hereinafter defined) held of record as
of the close of business on December 19, 1997 (the "Record Time") and
(b) authorized the issuance of one Right in respect of each share of
Common Stock issued after the Record Time and prior to the Separation
Time (as hereinafter defined) and, to the extent provided in Section 5.3,
each share of Common Stock issued after the Separation Time;
WHEREAS, subject to the terms hereof, each Right entitles the
holder thereof, after the Separation Time, to purchase securities of the
Company (or, in certain cases, of certain other entities) pursuant to the
terms and subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act,
in connection with the issuance, transfer, exchange and replacement of
Rights Certificates (as hereinafter defined), the exercise of Rights and
other matters referred to herein;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include (i) Freeport-
McMoRan Resource Partners, Limited Partnership ("FRP"), its Affiliate and
Associates, provided that the exclusion under this clause (i) shall apply
only with respect to the shares of Common Stock Beneficially Owned by
FRP, its Affiliates and Associates at the Record Time, (ii) any Person
who shall become the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock solely as a result of an acquisition by the
Company of shares of Common Stock, until such time thereafter as such
Person shall become the Beneficial Owner (other than by means of a stock
dividend or stock split) of any additional shares of Common Stock, (iii)
any Person who shall become the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock but who acquired shares of Common
Stock without any plan or intention to seek or affect control of the
Company, if such Person promptly thereafter enters into and delivers to
the Company an irrevocable commitment promptly to divest, and thereafter
promptly divests (without exercising or retaining any power, including
voting, with respect to such shares), sufficient shares of Common Stock
(or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of
15% or more of the outstanding shares of Common Stock or (iv) any Person
who Beneficially Owns shares of Common Stock consisting solely of one or
more of (A) shares of Common Stock Beneficially Owned pursuant to the
grant or exercise of an option granted to such Person by the Company in
connection with an agreement to merge with, or acquire, the Company at
a time at which there is no Acquiring Person, (B) shares of Common Stock
(or securities convertible into, exchangeable into or exercisable for
Common Stock) Beneficially Owned by such Person or its Affiliates or
Associates at the time of grant of such option or (C) shares of Common
Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) acquired by Affiliates or Associates of such Person
after the time of such grant which, in the aggregate, amount to less than
1% of the outstanding shares of Common Stock. In addition, the Company,
any wholly-owned Subsidiary of the Company and any employee benefit plan
of the Company or a wholly-owned Subsidiary of the Company shall not be
an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act
of 1934, as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner," and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities as
to which such Person or any of such Person's Affiliates or Associates is
or may be deemed to be the beneficial owner of pursuant to Rule 13d-3 and
13d-5 under the Securities Exchange Act of 1934, as such Rules are in
effect on the date of this Agreement, as well as any securities as to
which such Person or any of such Person's Affiliates or Associates has
the right to become Beneficial Owner (whether such right is exercisable
immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, rights (other
than the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner," or to have
"Beneficial Ownership" of, or to "Beneficially Own," any security
(i) solely because such security has been tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered security is accepted for payment or
exchange or (ii) solely because such Person or any of such Person's
Affiliates or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy given in response
to a public proxy or consent solicitation made to more than ten holders
of shares of a class of stock of the Company registered under Section 12
of the Securities Exchange Act of 1934 and pursuant to, and in accordance
with, the applicable rules and regulations under the Securities Exchange
Act of 1934, except if such power (or the arrangements relating thereto)
is then reportable under Item 6 of Schedule 13D under the Securities
Exchange Act of 1934 (or any similar provision of a comparable or succes-
sor report). For purposes of this Agreement, in determining the percen-
tage of the outstanding shares of Common Stock with respect to which a
Person is the Beneficial Owner, all shares as to which such Person is
deemed the Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York, New York are
generally authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m. New
York, New York time on such date (or, if such date is not a Business Day,
5:00 p.m. New York, New York time on the next succeeding Business Day)
or such other time at which the New York, New York office of the transfer
agent for the Common Stock (or, after the Separation Time, the New York,
New York office of the Rights Agent) is closed to the public.
"Common Stock" shall mean the shares of Common Stock, $.01 par
value, of the Company.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one
whole Right. Until adjustment thereof in accordance with the terms
hereof, the Exercise Price shall equal $25.00.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the close of business on the tenth-year
anniversary of the Record Time and (iv) upon the merger of the
Company into another corporation pursuant to an agreement entered into
when there is no Acquiring Person.
"Flip-in Date" shall mean the tenth business day after any
Stock Acquisition Date which is not the result of a Flip-over Transaction
or Event.
"Flip-over Entity," for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause
(i) of the definition thereof, the Person issuing any securities into
which shares of Common Stock are being converted or exchanged and, if no
such securities are being issued, the other party to such Flip-over
Transaction or Event and (ii) in the case of a Flip-over Transaction or
Event referred to in clause (ii) of the definition thereof, the Person
receiving the greatest portion of the assets or earning power being
transferred in such Flip-over Transaction or Event; provided in all cases
that if such Person is a subsidiary of a corporation, the parent
corporation shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the
election of directors (or other persons similarly responsible for
direction of the business and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after the time when an Acquiring Person has become
such in which, directly or indirectly, (i) the Company shall consolidate
or merge or participate in a share exchange with any other Person if, at
the time of the consolidation, merger or share exchange or at the time
the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person controls
the Board of Directors of the Company and any term of or arrangement
concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring Person
is not identical to the terms and arrangements relating to other holders
of the Common Stock or (ii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by either
book value or fair market value) or (B) generating more than 50% of the
operating income or cash flow, of the Company and its Subsidiaries (taken
as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert, if, at the time
of the entry by the Company (or any such Subsidiary) into an agreement
with respect to such sale or transfer of assets, the Acquiring Person
controls the Board of Directors of the Company.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading
Days through and including the Trading Day immediately preceding such
date; provided, however, that if an event of a type analogous to any of
the events described in Section 2.4 hereof shall have caused the closing
prices used to determine the Market Price on any Trading Days during such
period of 20 Trading Days not to be fully comparable with the closing
price on such date, each such closing price so used shall be
appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any
securities on any date shall be the last reported sale price, regular
way, or, in case no such sale takes place or is quoted on such date, the
average of the closing bid and asked prices, regular way, for each share
of such securities, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange, Inc. or,
if the securities are not listed on such exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the securities are listed or admitted to trading or, if on any such date
the securities are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or such other system then in
use, or, if on any such date the securities 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 secu-
rities as selected by the Board of Directors of the Company; provided,
however, that if on any such date the securities are not listed or ad-
mitted to trading on a national securities exchange or quoted by NASDAQ
and no such market maker is making a market in the securities, the
closing price per share of such securities on such date shall mean the
fair value per share of securities on such date as determined in good
faith by the Board of Directors of the Company, after consultation with
a nationally recognized investment banking firm, and set forth in a cer-
tificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the
Securities Exchange Act of 1934, as such Rule is in effect on the date
of this Agreement), corporation or other entity.
"Preferred Stock" shall mean the series of Participating
Preferred Stock, $.01 par value, of the Company created by Certificate
of Designation in substantially the form set forth in Exhibit A hereto
appropriately completed.
"Redemption Price" shall mean an amount equal to $0.01.
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth business day (or such later date as the Board
of Directors of the Company may from time to time fix by resolution
adopted prior to the Separation Time that would otherwise have occurred)
after the date on which any Person commences a tender or exchange offer
which, if consummated, would result in such Person's becoming an
Acquiring Person and (ii) the Flip-in Date; provided, that if the
foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that
if any tender or exchange offer referred to in clause (i) of this
paragraph is cancelled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of Common Stock
pursuant thereto, such offer shall be deemed, for purposes of this
paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has
become such.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of
the equity securities or a majority of the equity interest is
Beneficially Owned, directly or indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed on such
exchange, a day on which the principal national securities exchange on
which such securities are listed or admitted to trading is open for the
transaction of business or, if such securities are not listed or admitted
to trading on any national securities exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the
Record Time, the Company will send the Summary of Stockholder
Protection Rights Agreement, in substantially the form of Exhibit C
hereto, to each holder of record of Common Stock as of the Record
Time, at such holder's address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for
the Common Stock issued after the Record Time but prior to the Separa-
tion Time shall evidence one Right for each share of Common Stock
represented thereby and shall have impressed on, printed on, written
on or otherwise affixed to them the following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and entitles
the holder hereof to certain Rights as set forth in a Rights
Agreement, dated as of December 17, 1997 (as such may be amended
from time to time, the "Rights Agreement"), between Freeport-McMoRan
Sulphur Inc. (the "Company") and Mellon Securities Trust
Company, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
may be redeemed, may be exchanged for shares of Common Stock or
other securities or assets of the Company or a Subsidiary of the
Company, may expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or an Affiliate or Associate
thereof, as such terms are defined in the Rights Agreement, or by
any transferee of any of the foregoing) or may be evidenced by
separate certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing of
a copy of the Rights Agreement to the holder of this certificate
without charge within five days after the receipt of a written
request therefor.
Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share
of Common Stock evidenced thereby notwithstanding the absence of the
foregoing legend.
2.3 Exercise of Rights; Separation of Rights.
(a) Subject to Sections 3.1, 5.1 and 5.10 and subject to adjustment
as herein set forth, each Right will entitle the holder thereof, after
the Separation Time and prior to the Expiration Time, to purchase, for
the Exercise Price, one one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the certificate for
the associated share of Common Stock (together, in the case of
certificates issued prior to the Record Time, with the summary mailed
to the record holder thereof pursuant to Section 2.1) and will be
transferable only together with, and will be transferred by a transfer
(whether with or without such letter) of, such associated share.
(c) Subject to the terms hereof, after the Separation Time
and prior to the Expiration Time, the Rights (i) may be exercised and
(ii) may be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Time (other
than any Person whose Rights have become void pursuant to Section
3.1(b)), at such holder's address as shown by the records of the
Company (the Company hereby agreeing to furnish copies of such records
to the Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit B hereto
appropriately completed, representing the number of Rights held by
such holder at the Separation Time and having such marks of identifi-
cation or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from
time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to the terms hereof, Rights may be exercised
on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights
Certificate evidencing such Rights with an Election to Exercise (an
"Election to Exercise") substantially in the form attached to the
Rights Certificate duly completed, accompanied by payment in cash, or
by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied
by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of Rights Certificates
or the issuance or delivery of certificates for shares or depositary
receipts (or both) in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election
to Exercise accompanied by payment as set forth in Section 2.3(d), and
subject to the terms hereof, the Rights Agent will thereupon promptly
(i)(A) requisition from the Company's transfer agent stock
certificates evidencing such number of shares or other securities to
be purchased (the Company hereby irrevocably authorizing its transfer
agent to comply with all such requisitions) and (B) if the Company
elects pursuant to Section 5.5 not to issue certificates representing
fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be
purchased or requisition from the Company the amount of cash to be
paid in lieu of fractional shares in accordance with Section 5.5 and
(ii) after receipt of such certificates, depositary receipts and/or
cash, deliver the same to or upon the order of the registered holder
of such Rights Certificate, registered (in the case of certificates or
depositary receipts) in such name or names as may be designated by
such holder.
(f) In case the holder of any Rights shall exercise less
than all the Rights evidenced by such holder's Rights Certificate, a
new Rights Certificate evidencing the Rights remaining unexercised
will be issued by the Rights Agent to such holder or to such holder's
duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take
all such action as may be necessary to ensure that all shares
delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Exercise
Price), be duly and validly authorized, executed, issued and delivered
and fully paid and nonassessable; (ii) take all such action as may be
necessary to comply with any applicable requirements of the Securities
Act of 1933 or the Securities Exchange Act of 1934, and the rules and
regulations thereunder, and any other applicable law, rule or
regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in
respect of the original issuance or delivery of the Rights Certifi-
cates or of any shares issued upon the exercise of Rights, provided
that the Company shall not be required to pay any transfer tax or
charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares in a name other than that of the
holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights.
(a) In the event the Company shall at any time after the Record Time
and prior to the Separation Time (i) declare or pay a dividend on
Common Stock payable in Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares of Common Stock, (x) the Exercise Price in
effect after such adjustment will be equal to the Exercise Price in
effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one
share of Common Stock immediately prior to such dividend, subdivision
or combination would hold thereafter as a result thereof and (y) each
Right held prior to such adjustment will become that number of Rights
equal to the Expansion Factor, and the adjusted number of Rights will
be deemed to be distributed among the shares of Common Stock with
respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock
will have exactly one Right associated with it. Each adjustment made
pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or
combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock
otherwise than in a transaction referred to in the preceding
paragraph, each such share of Common Stock so issued shall
automatically have one new Right associated with it, which Right shall
be evidenced by the certificate representing such share. To the
extent provided in Section 5.3, Rights shall be issued by the Company
in respect of shares of Common Stock that are issued or sold by the
Company after the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any
securities or assets in respect of, in lieu of or in exchange for
Common Stock (other than pursuant to a regular periodic cash dividend
or a dividend paid solely in Common Stock) whether by dividend, in a
reclassification or recapitalization (including any such transaction
involving a merger, consolidation or share exchange), or otherwise,
the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of the
Company, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the
holders of Rights generally, and the Company and the Rights Agent
shall amend this Agreement as necessary to provide for such
adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an
adjustment to the Exercise Price is made pursuant to this Section 2.4,
the Company shall (i) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (ii) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such certificate and
(iii) mail a brief summary thereof to each holder of Rights.
(d) Irrespective of any adjustment or change in the
securities purchasable upon exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express
the securities so purchasable which were expressed in the initial
Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective. Each person in
whose name any certificate for shares is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of
record of the shares represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Exercise Price for
such Rights (and any applicable taxes and other governmental charges
payable by the exercising holder hereunder) was made; provided,
however, that if the date of such surrender and payment is a date upon
which the stock 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 stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates. (a) The Rights Certificates shall be executed
on behalf of the Company by its Chairman of the Board, President or
its Treasurer, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Rights Certificates may be manual or
facsimile.
Rights Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to
the countersignature and delivery of such Rights Certificates.
Promptly after the Company learns of the Separation Time,
the Company will notify the Rights Agent of such Separation Time and
will deliver Rights Certificates executed by the Company to the Rights
Agent for countersignature, and, subject to Section 3.1(b), the Rights
Agent shall manually countersign and deliver such Rights Certificates
to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose unless manually
countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be kept a
register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the
registration and transfer of Rights. The Rights Agent is hereby
appointed "Rights Registrar" for the purpose of maintaining the Rights
Register for the Company and registering Rights and transfers of
Rights after the Separation Time as herein provided. In the event
that the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent will have the right to examine the Rights Register at all
reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d),
the Company will execute, and the Rights Agent will countersign and
deliver, in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or
more new Rights Certificates evidencing the same aggregate number of
Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all
Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such
Rights shall be entitled to the same benefits under this Agreement as
the Rights surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company or
the Rights Agent, as the case may be, duly executed by the holder
thereof or such holder's attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate under this
Section 2.7, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not be required to register the
transfer or exchange of any Rights after such Rights have become void
under Section 3.1(b), been exchanged under Section 3.1(c) or been
redeemed or terminated under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates. (a) If any mutilated Rights Certificate is surrendered
to the Rights Agent prior to the Expiration Time, then, subject to
Sections 3.1(b) and 5.1, the Company shall execute and the Rights
Agent shall countersign and deliver in exchange therefor a new Rights
Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to their
satisfaction of the destruction, loss or theft of any Rights
Certificate and (ii) such security or indemnity as may be required by
them to save each of them and any of their agents harmless, then,
subject to Sections 3.1(b) and 5.1 and in the absence of notice to the
Company or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall countersign and deliver, in lieu of
any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Rights Agent) connected
therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights
Certificate shall evidence an original additional contractual
obligation of the Company, whether or not the destroyed, lost or
stolen Rights Certificate shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Agreement equally
and proportionately with any and all other Rights duly issued
hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated
Common Stock certificate) for registration of transfer, the Company,
the Rights Agent and any agent of the Company or the Rights Agent may
deem and treat the person in whose name such Rights Certificate (or,
prior to the Separation Time, such Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby for all purposes whatsoever, including the payment of the
Redemption Price and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement,
unless the context otherwise requires, the term "holder" of any Rights
shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer
or exchange shall, if surrendered to any person other than the Rights
Agent, be delivered to the Rights Agent and, in any case, shall be
promptly cancelled by the Rights Agent. The Company may at any time
deliver to the Rights Agent for cancellation any Rights Certificates
previously countersigned and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Rights Certificates so
delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent shall
destroy all cancelled Rights Certificates and deliver a certificate of
destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights
by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer
of, the associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates
will be transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate)
for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person
in whose name the Rights Certificate (or, prior to the Separation
Time, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for all
purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will,
under the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time
to time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the
Expiration Time a Flip-in Date shall occur, the Company shall take
such action as shall be necessary to ensure and provide that, except
as provided in this Section 3.1, each Right shall constitute the right
to purchase from the Company, upon exercise thereof in accordance with
the terms hereof (but subject to Section 5.10), that number of shares
of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in
cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights
generally in the event that on or after such Stock Acquisition Date an
event of a type analogous to any of the events described in
Section 2.4(a) or (b) shall have occurred with respect to the Common
Stock).
(b) Notwithstanding the foregoing, any Rights that are or
were Beneficially Owned on or after the Stock Acquisition Date by an
Acquiring Person or an Affiliate or Associate thereof or by any
transferee, direct or indirect, of any of the foregoing shall become
void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights under any
provision of this Agreement. If any Rights Certificate is presented
for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of
assignment or notice of election to exercise and provide such
additional evidence of the identity of the Beneficial Owner and its
Affiliates and Associates (or former Beneficial Owners and their
Affiliates and Associates) as the Company shall reasonably request,
then the Company shall be entitled conclusively to deem the Beneficial
Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced thereby to be void and not transferable or
exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Flip-in Date and prior to the time that an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock, elect to exchange all (but not
less than all) the then outstanding Rights (which shall not include
Rights that have become void pursuant to the provisions of Sec-
tion 3.1(b)) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted in order to
protect the interests of holders of Rights generally in the event that
after the Separation Time an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with
respect to the Common Stock (such exchange ratio, as adjusted from
time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action
and without any notice, the right to exercise the Rights will
terminate and each Right (other than Rights that have become void
pursuant to Section 3.1(b)) will thereafter represent only the right
to receive a number of shares of Common Stock equal to the Exchange
Ratio. Promptly after the action of the Board of Directors electing
to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in
exchange for Rights) to the Rights Agent and the holders of the Rights
(other than Rights that have become void pursuant to Section 3.1(b))
outstanding immediately prior thereto by mailing such notice in
accordance with Section 5.9.
Each Person in whose name any certificate for shares is
issued upon the exchange of Rights pursuant to this Section 3.1(c) or
Section 3.1(d) shall for all purposes be deemed to have become the
holder of record of the shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of any
applicable taxes and other governmental charges payable by the holder
was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock 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 stock transfer books of the
Company are open.
(d) Whenever the Company shall become obligated under
Section 3.1(a) or (c) to issue shares of Common Stock upon exercise of
or in exchange for Rights, the Company, at its option, may substitute
therefor shares of Preferred Stock, at a ratio of one one-hundredth of
a share of Preferred Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock or
Preferred Stock of the Company to permit the exercise or exchange in
full of the Rights in accordance with Section 3.1(a) or (c), the
Company shall either (i) call a meeting of stockholders seeking
approval to cause sufficient additional shares to be authorized
(provided that if such approval is not obtained the Company will take
the action specified in clause (ii) of this sentence) or (ii) take
such action as shall be necessary to ensure and provide, to the extent
permitted by applicable law and any agreements or instruments in
effect on the Stock Acquisition Date to which it is a party, that each
Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or
equity securities or other assets (or a combination thereof) having a
fair value equal to twice the Exercise Price, or (B) without payment
of consideration (except as otherwise required by applicable law),
debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board
of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other
assets (or a combination thereof) having a fair value equal to the
product of the Market Price of a share of Common Stock on the Flip-in
Date times the Exchange Ratio in effect on the Flip-in Date, where in
any case set forth in (x) or (y) above the fair value of such debt or
equity securities or other assets shall be as determined in good faith
by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the
Company shall not enter into any agreement with an Acquiring Person
(or any of its Affiliates or Associates) with respect to, consummate
or permit to occur any Flip-over Transaction or Event unless and until
it shall have entered into a supplemental agreement with the Flip-over
Entity, for the benefit of the holders of the Rights, providing that,
upon consummation or occurrence of the Flip-over Transaction or Event
(i) each Right shall thereafter constitute the right to purchase from
the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over
Entity having an aggregate Market Price on the date of consum-
mation or occurrence of such Flip-over Transaction or Event equal to
twice the Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that after
such date of consummation or occurrence an event of a type analogous
to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over
Entity shall thereafter be liable for, and shall assume, by virtue of
such Flip-over Transaction or Event and such supplemental agreement,
all the obligations and duties of the Company pursuant to this
Agreement. The provisions of this Section 3.2 shall apply to
successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the
Company shall not enter into any agreement with respect to, consummate
or permit to occur any Flip-over Transaction or Event if at the time
thereof there are any rights, warrants or securities outstanding or
any other arrangements, agreements or instruments that would eliminate
or otherwise diminish in any material respect the benefits intended to
be afforded by this Rights Agreement to the holders of Rights upon
consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company 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 to be
done by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability.
(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 certificate for securities purchasable upon exercise
of Rights, Rights Certificate, certificate 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.
4.2 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
is a party, or any corporation succeeding to the stockholder services
business of the Rights Agent or any successor Rights Agent, will be
the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any
of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 4.4 hereof. In case at the time such successor
Rights Agent succeeds to the agency created by this Agreement any of
the Rights Certificates have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
have not been countersigned, any successor Rights Agent may
countersign such Rights 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 Rights Certificates will have the full
force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
4.3 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 Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel
will be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman of
the Board, the President or any Vice President and by the Treasurer or
any Assistant Treasurer or the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate
will be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the certificates for securities purchasable upon
exercise of Rights or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and will be deemed to have been made
by the Company only.
(e) The Rights Agent will not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery
hereof by the Rights Agent) or in respect of the validity or execution
of any certificate for securities purchasable upon exercise of Rights
or Rights Certificate (except its countersignature thereof); nor will
it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate;
nor will it be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Section 3.1(b)
hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 hereof or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect
to the exercise of Rights after receipt of the certificate
contemplated by Section 2.4 describing any such adjustment); nor will
it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any securities
purchasable upon exercise of Rights or any Rights or as to whether any
securities purchasable upon exercise of Rights will, when issued, be
duly and validly authorized, executed, issued and delivered and 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 person believed by the Rights Agent to be the
Chairman of the Board, the President, the Secretary or any Assistant
Secretary or the Treasurer of the Company, and to apply to such
persons 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 person.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
Common Stock, Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign
and be discharged from its duties under this Agreement upon 90 days'
notice (or such lesser notice as is acceptable to the Company) in
writing mailed to the Company and to each transfer agent of Common
Stock by registered or certified mail, and to the holders of the
Rights in accordance with Section 5.9. The Company may remove the
Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Rights in accordance with
Section 5.9. If the Rights Agent should resign or be removed or
otherwise become incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such
appointment within a period of 30 days after such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights
(which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the holder of any
Rights 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 corpo-
ration organized and doing business under the laws of the United
States or of the State of New York, in good standing, having its
principal office in the State of New York, which is authorized under
such laws to exercise the powers of the Rights Agent contemplated by
this Agreement and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000.
After appointment, the successor Rights Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent 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 will file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common
Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4,
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.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to the close of business
on the Flip-in Date, elect to redeem all (but not less than all) the
then outstanding Rights at the Redemption Price and the Company, at
its option, may pay the Redemption Price either in cash or shares of
Common Stock or other securities of the Company deemed by the Board of
Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors
of the Company electing to redeem the Rights (or, if the resolution of
the Board of Directors electing to redeem the Rights states that the
redemption will not be effective until the occurrence of a specified
future time or event, upon the occurrence of such future time or
event), without any further action and without any notice, the right
to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after
the Rights are redeemed, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall
expire at the Expiration Time and no Person shall have any rights
pursuant to this Agreement or any Right after the Expiration Time,
except, if the Rights are exchanged or redeemed, as provided in
Section 3.1(c), 3.1(d), 3.1(e), 3.2 or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the number
or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common
Stock by the Company following the Separation Time and prior to the
Redemption Time or Expiration Time pursuant to the terms of securities
convertible or redeemable into shares of Common Stock or to options,
in each case issued or granted prior to, and outstanding at, the
Separation Time, the Company shall issue to the holders of such shares
of Common Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of such
shares of Common Stock; provided, however, in each case, (i) no such
Rights Certificate shall be issued, if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company
or to the Person to whom such Rights Certificates would be issued,
(ii) no such Rights Certificates shall be issued if, and to the extent
that, appropriate adjustment shall have otherwise been made in lieu of
the issuance thereof, and (iii) the Company shall have no obligation
to distribute Rights Certificates to any Acquiring Person or Affiliate
or Associate of an Acquiring Person or any transferee of any of the
foregoing.
5.4 Supplements and Amendments. The Company and the
Rights Agent may from time to time supplement or amend this Agreement
without the approval of any holders of Rights (i) prior to the close
of business on the Flip-in Date, in any respect and (ii) after the
close of business on the Flip-in Date, to make any changes that the
Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the holders of Rights generally or
in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with any other
provisions herein or otherwise defective. The Rights Agent will duly
execute and deliver any supplement or amendment hereto requested by
the Company which satisfies the terms of the preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or
redemption of Rights, the Company shall, in lieu thereof, in the sole
discretion of the Board of Directors, either (a) evidence such
fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by
it, providing that each holder of a depositary receipt shall have all
of the rights, privileges and preferences to which such holder would
be entitled as a beneficial owner of such fractional share, or
(b) sell such shares on behalf of the holders of Right and pay to the
registered holder of such Rights the appropriate fraction of price per
share received upon such sale.
5.6 Rights of Action. Subject to the terms of this
Agreement (including Section 3.1(b)), rights of action in respect of
this Agreement, other than rights of action vested solely in the
Rights Agent, are vested in the respective holders of the Rights; and
any holder of any Rights, without the consent of the Rights Agent or
of the holder of any other Rights, may, on such holder's own behalf
and for such holder's own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this
Agreement.
5.7 Holder of Rights Not Deemed a Stockholder. No holder,
as such, of any Rights shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of shares or any other securities
which may at any time be issuable on the exercise of such Rights, nor
shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights, 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 5.8 hereof), or to receive
dividends or subscription rights, or otherwise, until such Rights
shall have been exercised or exchanged in accordance with the
provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Time and prior to the Expiration Time
(i) to effect or permit (in cases where the Company's permission is
required) occurrence of any Flip-in Date or Flip-over Transaction or
Event or (ii) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each
holder of a Right, in accordance with Section 5.9 hereof, a notice of
such proposed action, which shall specify the Flip-in Date or the date
on which such Flip-over Transaction or Event, liquidation, dissolu-
tion, or winding up is to take place, and such notice shall be so
given at least 20 Business Days prior to the date of the taking of
such proposed action.
5.9 Notices. Notices or demands authorized or required by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights to or on the Company shall be sufficiently given
or made if delivered or sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights
Agent) as follows:
Freeport-McMoRan Sulphur Inc.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: John G. Amato
Any notice or demand authorized or required by this Agreement to be
given or made by the Company or by the holder of any Rights to or on
the Rights Agent shall be sufficiently given or made if delivered or
sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Mellon Securities Trust Company
85 Challenger Park
Overpeck Centre
Ridgefield Park, New Jersey 07660
Attention: Joyce Davis
Notices or demands authorized or required by this Agreement to be
given or made by the Company or the Rights Agent to or on the holder
of any Rights shall be sufficiently given or made if delivered or sent
by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as it appears upon the registry books of the
Rights Agent or, prior to the Separation Time, 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.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will need to be
taken pursuant to Section 3.1(a), (b), (d) or (e) or to comply with
federal or state securities laws, the Company may suspend the exercis-
ability of the Rights for a period of up to ninety (90) days following
the date of the occurrence of the Separation Time or the Flip-in Date
in order to take such action or comply with such laws. In the event
of any such suspension, the Company shall issue as promptly as
practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice
thereof pursuant to Section 5.9 shall not be required. Failure to
give a notice pursuant to the provisions of this Agreement shall not
affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable
upon exercise of Rights fails to fulfill any of its obligations
pursuant to this Agreement, then the Company or such Person will
reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 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.
5.13 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 holders of the Rights 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 holders of the Rights.
5.14 Determination and Actions by the Board of Directors,
etc. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board 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. All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board of Directors of the Company to
any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear
herein for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
5.16 Governing Law. This Agreement and each Right issued
hereunder shall be deemed to be a contract made under the laws of the
State of Delaware 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.
5.17 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.
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and
to any extent, be invalid or unenforceable, such term or provision
shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering
unenforceable the remaining terms and provisions hereof or the
application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
FREEPORT-McMoRan SULPHUR INC.
By: /s/Robert M. Wohleber
Robert M. Wohleber
President and Chief Executive Officer
MELLON SECURITIES TRUST COMPANY
By: /s/Joyce Davis
Joyce Davis
Account Manager
Exhibit A
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF
PARTICIPATING PREFERRED STOCK
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, Freeport-McMoRan Sulphur Inc., a Delaware corporation (the
"Corporation"), acting through its undersigned President and Secretary,
does hereby certify:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, at a regular
meeting of the Board of Directors of the Corporation held on December 16,
1997, the Board duly adopted the following resolutions creating a series
of 1,000,000 shares of Preferred Stock designated as Participating
Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Certificate of Incorporation, a series of Preferred Stock of the
Corporation is hereby created, and that the designation and amount
thereof, and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as stated in the
Corporation's Certificate of Incorporation and as follows:
(1) Designation and Amount. A series of preferred stock of
the Corporation is hereby established, having the preferences,
limitations and relative rights set forth below:
(a) The distinctive serial designation of this series
shall be "Participating Preferred Stock" (hereinafter called "this
Series"). Each share of this Series shall be identical in all respects
with the other shares of this Series except as to the dates from and
after which dividends thereon shall be cumulative.
(b) The number of shares in this Series shall initially
be 1,000,000, which number may from time to time be increased or
decreased (but not below the number then outstanding) by the Board of
Directors. Shares of this Series purchased by the Corporation shall be
canceled and shall revert to authorized but unissued shares of Preferred
Stock undesignated as to series. Shares of this Series may be issued in
fractional shares, which fractional shares shall entitle the holder, in
proportion to such holder's fractional share, to all rights of a holder
of a whole share of this Series.
(2) Dividends and Distributions. The holders of this Series
shall have the following dividend rights.
(a) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by the Board
of Directors, but only out of funds legally available therefor,
dividends, (i) on each date that dividends or other distributions (other
than dividends or distributions payable in Common Stock of the
Corporation) are payable on or in respect of Common Stock comprising part
of the Reference Package (as defined below), in an amount per whole share
of this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common
Stock of the Corporation) that would be payable on such date to a holder
of the Reference Package and (ii) on the last day of September, December,
March and June in each year, in an amount per whole share of this Series
equal to the excess (if any) of $1.00 over the aggregate dividends paid
per whole share of this Series during the three month period ending on
such last day. Each such dividend shall be paid to the holders of record
of shares of this Series on the date, not exceeding sixty days preceding
such dividend or distribution payment date, fixed for the purpose by the
Board of Directors in advance of payment of each particular dividend or
distribution. Dividends on each full and each fractional share of this
Series shall be cumulative from the date such full or fractional share
is originally issued; provided that any such full or fractional share
originally issued after a dividend record date and on or prior to the
dividend payment date to which such record date relates shall not be
entitled to receive the dividend payable on such dividend payment date
or any amount in respect of the period from such original issuance to
such dividend payment date.
(b) The term "Reference Package" shall initially mean
100 shares of Common Stock, $.01 par value ("Common Stock"), of the
Corporation. In the event the Corporation shall at any time after the
close of business on December 16, 1997 (i) declare or pay a dividend on
any Common Stock payable in Common Stock, (ii) subdivide any Common Stock
or (iii) combine any Common Stock into a smaller number of shares, then
and in each such case the Reference Package after such event shall be the
Common Stock that a holder of the Reference Package immediately prior to
such event would hold thereafter as a result thereof.
(c) Holders of shares of this Series shall not be
entitled to any dividends, whether payable in cash, property or stock,
in excess of full cumulative dividends, as herein provided on this
Series.
(d) So long as any shares of this Series are
outstanding, no dividend (other than a dividend in Common Stock or in any
other stock ranking junior to this Series as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
distribution declared or made upon the Common Stock or upon any other
stock ranking junior to this Series as to dividends or upon liquidation,
nor shall any Common Stock nor any other stock of the Corporation ranking
junior to or on a parity with this Series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the
Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to this Series as to dividends and upon
liquidation), unless, in each case, the full cumulative dividends
(including the dividend to be due upon payment of such dividend,
distribution, redemption, purchase or other acquisition) on all
outstanding shares of this Series shall have been, or shall contempora-
neously be, paid.
(3) Merger, Consolidation, etc. In the event of any merger,
consolidation, reclassification or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
shares of this Series shall at the same time be similarly exchanged or
changed in an amount per whole share equal to the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as
the case may be, that a holder of the Reference Package would be entitled
to receive as a result of such transaction.
(4) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, the holders
of this Series shall have the following rights:
(a) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or
involuntary, the holders of full and fractional shares of this Series
shall be entitled, before any distribution or payment is made on any date
to the holders of the Common Stock or any other stock of the Corporation
ranking junior to this Series upon liquidation, to be paid in full an
amount per whole share of this Series equal to the greater of (i) an
amount equal to 100 times the Exercise Price in effect as of the
Separation Time (as such terms are defined in the Stockholder Protection
Rights Agreement dated as of December 17, 1997 between the Company and
Mellon Securities Trust Company, as Rights Agent) or (ii) the aggregate
amount distributed or to be distributed prior to such date in connection
with such liquidation, dissolution or winding up to a holder of the
Reference Package (such greater amount being hereinafter referred to as
the "Liquidation Preference"), together with accrued dividends to such
distribution or payment date, whether or not earned or declared. If such
payment shall have been made in full to all holders of shares of this
Series, the holders of shares of this Series as such shall have no right
or claim to any of the remaining assets of the Corporation.
(b) In the event the assets of the Corporation available
for distribution to the holders of shares of this Series upon any liqui-
dation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, shall be insufficient to pay in full all amounts to which
such holders are entitled pursuant to Section (4)(a), no such distri-
bution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this
Series upon such liquidation, dissolution or winding up unless
proportionate distributive amounts shall be paid on account of the shares
of this Series, ratably in proportion to the full distributable amounts
for which holders of all such parity shares are respectively entitled
upon such liquidation, dissolution or winding up.
(c) Upon the liquidation, dissolution or winding up of
the Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of assets of the Corporation available
for distribution to its stockholders all amounts to which such holders
are entitled pursuant to Section (4)(a) before any payment shall be made
to the holders of Common Stock or any other stock of the Corporation
ranking junior upon liquidation to this Series.
(d) For the purposes of this Section (4), the
consolidation or merger of, or binding share exchange by, the Corporation
with any other corporation shall not be deemed to constitute a
liquidation, dissolution or winding up of the Corporation.
(5) Voting Rights. In addition to any other vote or consent
of stockholders required by law or by the Certificate of Incorporation,
as amended, of the Corporation, each whole share of this Series shall,
on any matter, vote as a class with any other capital stock comprising
part of the Reference Package and voting on such matter and shall have
the number of votes thereon that a holder of the Reference Package would
have.
(6) No Redemption. The shares of this Series shall not be
redeemable.
(7) Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of
this Series so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding shares of this
Series, voting separately as a class.
* * * * * * * * * *
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be executed in its name and its corporate seal to be affixed hereto by
its duly authorized officers on this 17th day of December, 1997.
FREEPORT-McMoRan SULPHUR INC.
By: /s/Robert M. Wohleber
Robert M. Wohleber
President and
Chief Executive Officer
ATTEST:
By: /s/ Michael C. Kilanowski, Jr.
Michael C. Kilanowski, Jr., Secretary
Exhibit B
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY
EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL
BE VOID.
Rights Certificate
FREEPORT-McMoRan SULPHUR INC.
This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the registered holder thereof, subject to
the terms, provisions and conditions of the Stockholder Protection Rights
Agreement, dated as of December 17, 1997 (as amended from time to time,
the "Rights Agreement"), between Freeport-McMoRan Sulphur Inc., a
Delaware corporation (the "Company"), and Mellon Securities Trust
Company, a New York corporation, as Rights Agent (the "Rights Agent",
which term shall include any successor Rights Agent under the Rights
Agreement), to purchase from the Company at any time after the Separation
Time (as such term is defined in the Rights Agreement) and prior to the
close of business on December 19, 2007, one one-hundredth of a fully paid
share of Participating Preferred Stock, $.01 par value (the "Preferred
Stock"), of the Company (subject to adjustment as provided in the Rights
Agreement) at the Exercise Price referred to below, upon presentation and
surrender of this Rights Certificate with the Form of Election to
Exercise duly executed at the principal office of the Rights Agent in New
York, New York. The Exercise Price shall initially be $25.00 per Right
and shall be subject to adjustment in certain events as provided in the
Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities or
assets of the Company other than Preferred Stock, all as provided in the
Rights Agreement.
This Rights 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 Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available without
cost upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights
Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under
certain circumstances, at its option, at a redemption price of $0.01 per
Right or (b) exchanged by the Company under certain circumstances, at its
option, for one share of Common Stock or one one-hundredth of a share of
Preferred Stock per Right (or, in certain cases, other securities or
assets of the Company), subject in each case to adjustment in certain
events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the
holder of any securities 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 Rights evidenced by this
Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights 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.
Date: ____________
ATTEST: FREEPORT-McMoRan SULPHUR INC.
By:
Secretary President
Countersigned:
MELLON SECURITIES TRUST COMPANY
By:
Authorized Signature
<PAGE>
[[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells,
assigns and
transfers unto
(Please print name and address of
transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_______________ Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _______________, ____
Signature Guaranteed:
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever)
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having
an office or correspondent in the United States.
- -----------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
Signature NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will
deem the Beneficial Owner of the Rights evidenced by the enclosed Rights
Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) or a transferee of any of
the foregoing and accordingly will deem the Rights evidenced by such
Rights Certificate to be void and not transferable or exercisable.
<PAGE>
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: FREEPORT-McMoRan SULPHUR INC.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Participating Preferred Stock
issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
Address:
Social Security or Other Taxpayer
Identification Number:
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Address
Social Security or Other Taxpayer
Identification Number:
Dated: _______________, ____
Signature Guaranteed:
Signature
(Signature must correspond to name
as written upon the face of the
attached Rights Certificate in
every particular, without
alteration or enlargement or any
change whatsoever)
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having
an office or correspondent in the United States.
- -----------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced
by the attached Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
Signature
- -----------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem
the Beneficial Owner of the Rights evidenced by the attached Rights
Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) or a transferee of any of
the foregoing and accordingly will deem the Rights evidenced by such
Rights Certificate to be void and not transferable or exercisable.
Exhibit C
SUMMARY OF FREEPORT-McMoRan SULPHUR INC.'S
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
On December 16, 1997, the Board of Directors of Freeport-McMoRan
Sulphur Inc., a Delaware corporation (the "Company"), declared a dividend
payable December 22, 1997 of one right (a "Right") for each outstanding
share of common stock, $.01 par value ("Common Stock"), of the Company
held of record at the close of business on December 19, 1997 (the "Record
Time"), or issued thereafter and prior to the Separation Time (as here-
inafter defined) and thereafter pursuant to options and convertible
securities outstanding at the Separation Time. The Rights will be issued
pursuant to a Stockholder Protection Rights Agreement, dated as of
December 17, 1997 (the "Rights Agreement"), between the Company and
Mellon Securities Trust Company as Rights Agent (the "Rights Agent").
Each Right entitles its registered holder to purchase from the Company,
after the Separation Time, one one-hundredth of a share of Participating
Preferred Stock, $.01 par value ("Participating Preferred Stock"), for
$25.00 (the "Exercise Price"), subject to adjustment.
The Rights will be evidenced by the Common Stock certificates until
the close of business on the earlier of (either hereinafter referred to
as the "Separation Time") (i) the tenth business day (or such later date
as the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Separation Time that would otherwise have
occurred) after the date on which any Person (as defined in the Rights
Agreement) commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person, as defined
below, and (ii) the tenth day after the first date (the "Flip-in Date")
of public announcement by the Company that a Person has become an
Acquiring Person, other than as a result of a Flip-over Transaction or
Event (as defined below); provided that if the foregoing results in the
Separation Time being prior to the Record Time, the Separation Time shall
be the Record Time; and provided further that if a tender or exchange
offer referred to in clause (i) is cancelled, terminated or otherwise
withdrawn prior to the Separation Time without the purchase of any shares
of stock pursuant thereto, such offer shall be deemed never to have been
made. An Acquiring Person is any Person having Beneficial Ownership (as
defined in the Rights Agreement) of 15% or more of the outstanding shares
of Common Stock, which term shall not include (i) Freeport-McMoRan
Resource Partners, Limited Partnership ("FRP"), its Affiliates and
Associates, but only with respect to the shares of Common Stock
Beneficially Owned by FRP, its Affiliates and Associates at the Record
Time, (ii) the Company and any wholly-owned subsidiary of the Company,
(iii) any Person who shall become the Beneficial Owner of 15% or more of
the outstanding Common Stock solely as a result of an acquisition of
Common Stock by the Company, until such time as such Person acquires
additional Common Stock, other than through a dividend or stock split,
(iv) any Person who becomes an Acquiring Person without any plan or
intent to seek or affect control of the Company if such Person promptly
divests sufficient securities such that such 15% or greater Beneficial
Ownership ceases, or (v) any Person who Beneficially Owns shares of
Common Stock consisting solely of (A) shares acquired pursuant to the
grant or exercise of an option granted by the Company in connection with
an agreement to merge with, or acquire, the Company at a time at which
there is no Acquiring Person, (B) shares owned by such Person and its
Affiliates and Associates at the time of such grant or (C) shares,
amounting to less than 1% of the outstanding Common Stock, acquired by
Affiliates and Associates of such Person after the time of such grant.
The Rights Agreement provides that, until the Separation Time, the
Rights will be transferred with and only with the Common Stock. Common
Stock certificates issued after the Record Time but prior to the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall contain a legend incorporating by reference
the terms of the Rights Agreement (as such may be amended from time to
time). Notwithstanding the absence of the aforementioned legend,
certificates evidencing shares of Common Stock outstanding at the Record
Time shall also evidence one Right for each share of Common Stock
evidenced thereby. Promptly following the Separation Time, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed
to holders of record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as
defined in the Rights Agreement) following the Separation Time. The
Rights will expire on the earliest of (i) the Exchange Time (as defined
below), (ii) the tenth anniversary of the Record Time (iii) the date on
which the Rights are redeemed as described below and (iv) upon the merger
of the Company into another corporation pursuant to an agreement entered
into when there is no Acquiring Person (in any such case, the "Expiration
Time").
The Exercise Price and the number of Rights outstanding, or in
certain circumstances the securities purchasable upon exercise of the
Rights, are subject to adjustment from time to time to prevent dilution
in the event of a Common Stock dividend on, or a subdivision or a
combination into a smaller number of shares of, Common Stock, or the
issuance or distribution of any securities or assets in respect of, in
lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date
occurs, the Company shall take such action as shall be necessary to
ensure and provide that each Right (other than Rights Beneficially Owned
on or after the Stock Acquisition Date by the Acquiring Person or any
Affiliate or Associate thereof, or by any transferee of any of the
foregoing, which Rights shall become void) shall constitute the right to
purchase from the Company, upon the exercise thereof in accordance with
the terms of the Rights Agreement, that number of shares of Common Stock
or Participating Preferred Stock of the Company having an aggregate
Market Price (as defined in the Rights Agreement), on the date of the
public announcement of an Acquiring Person's becoming such (the "Stock
Acquisition Date") that gave rise to the Flip-in Date, equal to twice the
Exercise Price for an amount in cash equal to the then current Exercise
Price. In addition, the Board of Directors of the Company may, at its
option, at any time after a Flip-in Date and prior to the time that an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock, elect to exchange all (but not less
than all) the then outstanding Rights (other than Rights Beneficially
Owned on or after the Stock Acquisition Date by the Acquiring Person or
any Affiliate or Associate thereof, or by any transferee of any of the
foregoing, which Rights become void) 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 of the Separation Time (the
"Exchange Ratio"). Immediately upon such action by the Board of
Directors (the "Exchange Time"), the right to exercise the Rights will
terminate and each Right will thereafter represent only the right to
receive a number of shares of Common Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated under the preceding
paragraph to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares
of Participating Preferred Stock, at a ratio of one one-hundredth of a
share of Participating Preferred Stock for each share of Common Stock so
issuable.
In the event that prior to the Expiration Time the Company enters
into, consummates or permits to occur a transaction or series of
transactions after the time an Acquiring Person has become such in which,
directly or indirectly, (i) the Company shall consolidate or merge or
participate in a binding share exchange with any other Person if, at the
time of the consolidation, merger or share exchange or at the time the
Company enters into an agreement with respect to such consolidation,
merger or share exchange, the Acquiring Person controls the Board of
Directors of the Company and any term of or arrangement concerning the
treatment of shares of capital stock in such merger, consolidation or
share exchange relating to the Acquiring Person is not identical to the
terms and arrangements relating to other holders of Common Stock or
(ii) the Company shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer) assets (A) aggregating
more than 50% of the assets (measured by either book value or fair market
value) or (B) generating more than 50% of the operating income or cash
flow, 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) or to two or more such Persons which are affiliated or
otherwise acting in concert, if, at the time of such sale or transfer of
assets or at the time the Company (or any such subsidiary) enters into
an agreement with respect to such sale or transfer, the Acquiring Person
controls the Board of Directors of the Company (a "Flip-over Transaction
or Event"), the Company shall take such action as shall be necessary to
ensure, and shall not enter into, consummate or permit to occur such
Flip-over Transaction or Event until it shall have entered into a
supplemental agreement with the Person engaging in such Flip-over
Transaction or Event or the parent corporation thereof (the "Flip-over
Entity"), for the benefit of the holders of the Rights, providing, that
upon consummation or occurrence of the Flip-over Transaction or Event
(i) each Right shall thereafter constitute the right to purchase from the
Flip-over Entity, upon exercise thereof in accordance with the terms of
the Rights Agreement, that number of shares of common stock of the Flip-over
Entity having an aggregate Market Price on the date of consummation
or occurrence of such Flip-over Transaction or Event equal to twice the
Exercise Price for an amount in cash equal to the then current Exercise
Price and (ii) the Flip-over Entity shall thereafter be liable for, and
shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company
pursuant to the Rights Agreement. For purposes of the foregoing
description, the term "Acquiring Person" shall include any Acquiring
Person and its Affiliates and Associates counted together as a single
Person.
The Board of Directors of the Company may, at its option, at any
time prior to the close of business on the Flip-in Date, redeem all (but
not less than all) the then outstanding Rights at a price of $.01 per
Right (the "Redemption Price"), as provided in the Rights Agreement.
Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right
will thereafter represent only the right to receive the Redemption Price
in cash for each Right so held.
The Company and the Rights Agent may amend the Rights Agreement
without the approval of any holders of Rights (i) prior to the close of
business on the Flip-in Date, in any respect and (ii) after the close of
business on the Flip-in Date, to make any changes that the Company may
deem necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights generally or in order to
cure any ambiguity or to correct or supplement any provision which may
be inconsistent with any other provision or otherwise defective.
The holders of Rights will, solely by reason of their ownership of
Rights, have no rights as stockholders of the Company, including, without
limitation, the right to vote or to receive dividends.
The Rights will not prevent a takeover of the Company. However, the
Rights may cause substantial dilution to a person or group that acquires
15% or more of the Common Stock unless the Rights are first redeemed by
the Board of Directors of the Company. Nevertheless, the Rights should
not interfere with a transaction that is in the best interests of the
Company and its stockholders because the Rights can be redeemed on or
prior to the close of business on the Flip-in Date, before the
consummation of such transaction.
