<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PENNACO ENERGY, INC.
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(Exact name of registrant as specified in its charter)
NEVADA 88-0384598
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
1050 17TH STREET
SUITE 700
DENVER, COLORADO 80265
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(Address of principal executive office) (Zip Code)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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Common Stock, par value $.001 American Stock Exchange
Rights to Purchase Common Stock American Stock Exchange
If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. /X/
If this form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. / /
Securities Act registration statement file number to which this form
relates: __________ (if applicable)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
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(Title of Class)
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
SUMMARY OF THE COMMON STOCK
A description of the common stock, par value $0.001 per share, of
Pennaco Energy, Inc. (the "Company") to be registered hereunder is set forth
under Item 8 -- "Description of Securities" in the prospectus included in the
Registrant's Registration Statement on Form 10-SB, as amended (File No.
000-24881), initially filed with the Securities and Exchange Commission on
September 8, 1998, under the Securities Exchange Act of 1934, as amended,
which description is incorporated herein by reference.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On February 24, 1999, the Board of Directors of the Company declared a
dividend distribution of one common stock purchase right (a "Right") for each
outstanding share of Common Stock of the Company. The distribution is
payable to the stockholders of record at the close of business on March 9,
1999 (the "Record Date"). Each Right entitles the registered holder thereof
to purchase from the Company one-half of a share of Common Stock, at a price
of $20, subject to adjustment. The following is a summary of the Rights; the
full description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Company and Harris Trust and Savings
Bank, as Rights Agent (the "Rights Agent"). Copies of the Rights Agreement
are available free of charge from the Company. This summary description of
the Rights does not purport to be complete and is qualified in its entirety
by reference to all the provisions of the Rights Agreement, including the
definitions therein of certain terms, which Rights Agreement is incorporated
herein by reference.
THE RIGHTS AGREEMENT
Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights Certificates will
be distributed. The Rights will separate from the Company Common Stock and
the Distribution Date will occur upon the earlier of (i) 10 days following
the date of public announcement that a person or group of persons has become
an Acquiring Person (as hereinafter defined) or (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors
prior to the time a person becomes an Acquiring Person) following the
commencement of, or the announcement of an intention to make, a tender offer
or exchange offer upon consummation of which the offeror would, if
successful, become an Acquiring Person (the earlier of such dates being
called the "Distribution Date").
The term "Acquiring Person" means any person who or which, together with
all of its affiliates and associates, shall be the beneficial owner of 15% or
more of the outstanding Common Stock, but shall not include (i) the Company
or any Subsidiary of the Company or any employee benefit plan of the Company
or (ii) R.I.S. Resources International Corp. and its subsidiaries
(collectively, "RIS") or any other person or entity in which RIS is at the
time of determination the direct record and beneficial of all outstanding
voting securities (collectively, "Exempt Persons").
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The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date, upon transfer or new
issuance of Common Stock, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any certificates
for Common Stock, outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 9, 2009 (the "Expiration Date").
The Purchase Price payable, and the number of one-half of a share of
Common Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for or purchase
shares of Common Stock at a price, or securities convertible into Common
Stock with a conversion price, less than the then current market price of the
Common Stock or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular periodic cash
dividends paid or dividends payable in Common Stock) or of subscription
rights or warrants (other than those referred to in (ii) above).
The number of outstanding Rights and the number of one-half of a share of
Common Stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in the Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such
case, prior to the Distribution Date.
In the event that following a Stock Acquisition Date (the date of public
announcement that an Acquiring Person has become such) the Company is
acquired in a merger or other business combination transaction or more than
50% of its consolidated assets or earning power are sold, proper provision
will be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which
at the time of such transaction will have a market value of two times the
exercise price of the Right (the "Flip-Over Right").
In the event that a person (other than an Exempt Person) becomes an
Acquiring Person, proper provision shall be made so that each holder of a
Right (other than the Acquiring Person and its affiliates and associates)
will thereafter have the right to receive upon exercise that number of shares
of Common Stock (or, under certain circumstances, cash, other equity
securities or property of the
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Company) having a market value equal to two times the Purchase Price of the
Rights (the "Flip-In Right"). Upon the occurrence of the foregoing event giving
rise to the exercisability of the Rights, any Rights that are or were at any
time owned by an Acquiring Person shall become void.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. Upon exercise of the Rights, no fractional shares of
Common Stock will be issued and cash will be paid in lieu of fractional
shares of Common Stock.
At any time prior to the earlier to occur of (i) 5:00 p.m., Houston, Texas
time, on the 10th day after the Stock Acquisition Date or (ii) the expiration
of the Rights, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (the "Redemption Price"); PROVIDED, that (i) if
the Board of Directors authorizes redemption on or after the time a person
becomes an Acquiring Person, then such authorization must be by Board
Approval (as hereinafter defined) and (ii) the period for redemption may,
upon Board Approval, be extended by amending the Rights Agreement. The term
"Board Approval" means the approval of a majority of the directors of the
Company. Immediately upon any redemption of the Rights described in this
paragraph, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors without
the consent of the holders of the Rights at any time and from time to time
provided that such amendment does not adversely affect the interests of the
holders of the Rights. In addition, during any time that the Rights are
subject to redemption, the terms of the Rights may be amended by Board
Approval, including an amendment that adversely affects the interests of the
holders of the Rights, without the consent of the holders of Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration).
ITEM 2. EXHIBITS.
The following exhibits to this Registration Statement on Form 8-A are
either filed herewith or are incorporated by reference from the documents
specified, which have been filed with the Securities and Exchange Commission.
<TABLE>
<S> <C>
1. The Company's Registration Statement on Form 10-SB (File No.
000-24881), as amended, filed with the Securities and Exchange
Commission on September 8, 1998 (the "Registration Statement")
(incorporated herein by reference).
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2. Articles of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.1 to the Registration Statement).
3. Bylaws of the Company (incorporated herein by reference to Exhibit 3.2
to the Registration Statement).
*4. Rights Agreement, dated February 24, 1999, between the
Company and Harris Trust and Savings Bank, as Rights Agent.
*5. Specimen Certificate representing Common Stock of the Registrant.
</TABLE>
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* FILED HEREWITH
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<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.
Dated: April 16, 1999
PENNACO ENERGY, INC.
/s/ Glen C. Warren, Jr.
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Glen C. Warren, Jr.
CHIEF FINANCIAL OFFICER AND EXECUTIVE
VICE PRESIDENT
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<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C>
1. The Company's Registration Statement on Form 10-SB (File No.
000-24881), as amended, filed with the Securities and Exchange
Commission on September 8, 1998 (the "Registration Statement")
(incorporated herein by reference).
2. Articles of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.1 to the Registration Statement).
3. Bylaws of the Company (incorporated herein by reference to
Exhibit 3.2 to the Registration Statement).
*4. Rights Agreement, dated February 24, 1999, between the
Company and Harris Trust and Savings Bank, as Rights Agent.
*5. Specimen Certificate representing Common Stock of the Registrant.
</TABLE>
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* FILED HEREWITH
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<PAGE>
PENNACO ENERGY, INC.
AND
HARRIS TRUST AND SAVINGS BANK, AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF FEBRUARY 24, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . 8
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . 8
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . . . . . . . 10
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . 11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates . . . . . . 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . 13
Section 8. Cancellation and Destruction of Right Certificates. . . . . . . . . . 15
Section 9. Availability of Common Stock. . . . . . . . . . . . . . . . . . . . . 15
Section 10. Common Stock Record Date. . . . . . . . . . . . . . . . . . . . . . . 17
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. . . . . . 31
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . 38
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . . . 40
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . 41
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . 41
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . 42
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Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . 43
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . 47
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . . . . . . 49
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . . 53
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 27. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . . 55
Section 28. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 29. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . . . 56
Section 30. Determination and Actions by the Board of Directors . . . . . . . . . 56
Section 31. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 34. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
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<PAGE>
RIGHTS AGREEMENT
This Agreement, dated as of February 24, 1999 ("Agreement"), between
Pennaco Energy, Inc., a Nevada corporation (the "Company"), and Harris Trust
and Savings Bank, an Illinois banking corporation, as rights agent (the
"Rights Agent").
R E C I T A L S:
WHEREAS, at a meeting of the Board of Directors of the Company duly
called and held on February 24, 1999, at which a quorum was present and
acting throughout, such Board of Directors has authorized and declared a
dividend of one common stock purchase right (a "Right") for each share of
Common Stock (as such term is hereinafter defined) of the Company outstanding
at the close of business on March 9, 1999 (the "Record Date"), each Right
representing the right to purchase one-half of a share of Common Stock, upon
the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each share
of Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the shares of Common Stock
then outstanding, but shall not include an
<PAGE>
Exempt Person; PROVIDED, HOWEVER, that if the Board of Directors
of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" has become such inadvertently
(including, without limitation, because (i) such Person was unaware
that it beneficially owned a percentage of Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (ii) such
Person was aware of the extent of its Beneficial Ownership of Common
Stock but was unaware of the consequences of such Beneficial Ownership
under this Agreement) and without any intention of changing or
influencing control of the Company, and such Person, as promptly as
practicable after being advised of such determination divested or
divests himself or itself of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer be
an Acquiring Person, then such Person shall not be deemed to be or to
have become an "Acquiring Person" for any purposes of this Agreement.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15%
or more of the Common Stock of the Company then outstanding; PROVIDED,
HOWEVER, that if a Person shall become the Beneficial Owner of 15% or
more of the Common Stock of the Company then outstanding by reason of
the share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional
Common Stock of the Company, then such Person shall be deemed to be an
"Acquiring Person" unless upon the consummation of the acquisition of
such additional shares of Common Stock such Person does not own 15% or
more of the shares of Common Stock then outstanding.
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(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
(c) "Associate" shall have the meaning ascribed to such term in Rule
l2b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (I) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (II) securities which such Person
has a right to acquire upon the exercise of Rights at any time prior
to the time a Person becomes an
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Acquiring Person; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; PROVIDED, HOWEVER, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security by reason of such an agreement, arrangement or understanding
if the agreement, arrangement or understanding to vote such security
(a) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act (as such term is
hereinafter defined) and (b) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(d)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then issued and outstanding which such Person
would be deemed to own beneficially hereunder.
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(e) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in Denver, Colorado or
Chicago, Illinois are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Denver, Colorado time, on such date; PROVIDED, HOWEVER, that, if such date
is not a Business Day, it shall mean 5:00 P.M., Denver, Colorado time, on
the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company shall mean
the shares of common stock, par value $0.001 per share, of the Company.
"Common Stock" when used with reference to any Person other then the
Company shall mean the capital stock (or, in the case of an unincorporated
entity, the equivalent equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned
Person.
(h) "Common Stock equivalent" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) "Company" shall have the meaning set forth in the preamble
hereof.
(j) "Continuing Director" means (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board, who
is not an Acquiring Person, an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of any
such Affiliate or Associate, and was a member of the Board prior to the
date of this Agreement, or (ii) any Person (A) who subsequently becomes a
member of the Board, (B) who is not an Acquiring Person, an Affiliate or
Associate of an Acquiring Person, or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate, and
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6(C) whose nomination for election to the Board is recommended or approved
by a majority of the Continuing Directors or a nominating committee of the
Board consisting solely of Continuing Directors.
(k) "current per share market price" shall have the meaning set forth
in Section 11(d) hereof.
(l) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(m) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(o) "Exchange Ratio" shall have the meaning set forth in Section
24(a) hereof.
(p) "Exempt Person" shall mean (i) the Company or any Subsidiary (as
such term is hereinafter defined) of the Company or any employee benefit
plan of the Company, (ii) R.I.S. Resources or any of its Subsidiaries
(collectively, "RIS") or (iii) any Person other than RIS which is the
Beneficial Owner of Common Stock Beneficially Owned by RIS (a "Second Tier
RIS Stockholder"), but only if the shares of Common Stock otherwise
Beneficially Owned by RIS or such Second Tier RIS Stockholder (the "RIS
Shares") do not exceed the sum of (A) such RIS Shares held on the date
hereof and (B) 1% of the shares of Common Stock of the Company then
outstanding; provided, however, that in the event that RIS shall at any
time cease to beneficially own 15% or more of the Common Stock of the
Company then outstanding, then RIS and all Second Tier RIS Stockholders
shall, upon the occurrence of such event and thereafter, cease to be Exempt
Persons.
(q) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
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(r) "Invalidation Time" shall have the meaning set forth in Section
11(a)(ii) hereof.
(s) "Nasdaq" shall mean the National Association of Securities
Dealers, Inc. Automated Quotations System.
(t) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership, limited partnership or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(u) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
(w) "Record Date" shall have the meaning set forth in the second
paragraph hereof.
(x) "Redemption Date" shall have the meaning set forth in Section
7(a) hereof.
(y) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(z) "Requisite Majority" means, at any time, the affirmative vote of
a majority of the Continuing Directors then in office.
(aa) "Rights Agent" shall have the meaning set forth in the preamble
hereof.
(ab) "Right" shall have the meaning set forth in the second paragraph
hereof.
(ac) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(ad) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(ae) "Section 11(a)(iii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
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(af) "Security" shall have the meaning set forth in Section 11(d)
hereof.
(ag) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(ah) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(ai) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(aj) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ak) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(al) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall, prior to the
Distribution Date, also be the holders of the Common Stock) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i) the
tenth day after the Stock Acquisition Date or (ii) the tenth business day (or
such later date as may be determined by action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring Person) after the
date of the commencement by any Person of, or of the first public announcement
of the intention of any Person to commence, a tender or exchange offer the
consummation of which
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<PAGE>
would result in any Person becoming an Acquiring Person (including any such
date which is after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the Rights will be transferable only in connection with the transfer
of Common Stock. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if
requested, at the expense of the Company, send) by first-class, insured,
postage prepaid mail, to each record holder of Common Stock as of the close
of business on the Distribution Date, at the address of such holder shown on
the records of the Company, a Right Certificate, in substantially the form of
Exhibit A hereto (a "Right Certificate"), evidencing one Right for each share
of Common Stock so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common Stock, in
substantially the form of Exhibit B hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Stock as
of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the Redemption Date
or the Final
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Expiration Date), the surrender for transfer of any certificate for Common
Stock outstanding on the Record Date, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.
(c) Certificates for Common Stock which become outstanding (including,
without limitation, reacquired Common Stock referred to in the last sentence
of this paragraph (c) that are subsequently issued or distributed by the
Company) after the Record Date but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement between
Pennaco Energy, Inc. and Harris Trust and Savings Bank (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Pennaco Energy, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights may be redeemed or
be evidenced by separate certificates and will no longer be
evidenced by this certificate. Pennaco Energy, Inc. will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights
owned by or transferred to any Person who becomes an Acquiring
Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), and certain transferees thereof,
will become null and void and will no longer be transferable.
With respect to such certificate containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby. In
the event that the Company purchases or acquires any Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed cancelled and
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retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase shares of Common Stock and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Sections 11, 13 and 22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth therein at the
Purchase Price, but the number of shares of Common Stock and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its Chief Executive Officer, its President, any of its Vice
Presidents, or its Treasurer, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may
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be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificates although at the date
of the execution of this Rights Agreement any such Person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Section 14 hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11(a)(ii)
hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the registered holder to purchase a like number
of shares of Common Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right
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Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. Thereupon, the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the earlier
of the Redemption Date and the Final Expiration Date, upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein), in whole or
in part, at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the
Rights Agent, together with payment of the Purchase Price for the appropriate
number of shares of Common Stock as to which the Rights are exercised, at or
prior to the earliest of (i) the Close of Business on March 8, 2009 (the
"Final
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Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the "Redemption Date") and (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each whole share of Common Stock purchasable
pursuant to the exercise of a Right shall initially be $20, and shall be
subject to adjustment from time to time as provided in Section 11 or 13
hereof (the "Purchase Price") and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) of this Section 7.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Common Stock certificates for the number of shares of Common
Stock to be purchased and the Company hereby irrevocably authorizes any such
transfer agent to comply with all such requests; (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof; (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by
such holder; and (iv) when appropriate, after receipt, deliver such cash to
or upon the order of the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate
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evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i) completed and signed
the certificate contained in the form of assignment or election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof as the
Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and
no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such cancelled Right
Certificates, and, in such case, shall deliver a certificate of destruction
thereof to the Company.
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Section 9. AVAILABILITY OF COMMON STOCK. (a) The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock or any shares of Common Stock
held in its treasury, the number of shares of Common Stock that will be
sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7. The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all shares of Common
Stock delivered upon exercise of Rights shall at the time of delivery of the
certificates for such shares of Common Stock (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(b) So long as the shares of Common Stock (and, following the time that
a Person becomes an Acquiring Person, shares of Common Stock and other
securities) issuable upon the exercise of Rights may be listed or admitted to
trading on any national securities exchange or quotation system, the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed or
admitted to trading on any other exchange or quotation system upon official
notice of issuance upon such exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance
of shares of Common Stock (and following the time that a Person first becomes
an Acquiring Person, shares of Common Stock and other securities) upon the
exercise of Rights, to register and qualify such shares of Common Stock (and
following the time that a Person first becomes an Acquiring Person, shares of
Common Stock and other securities) under the Securities Act and any
applicable state securities or "Blue Sky" laws (to the extent exemptions
therefrom are not available), cause such registration statement and
qualifications to become effective as soon as possible after such filing and
keep such registration and
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qualifications effective until the earlier of the date as of which the
Rights are no longer exercisable for such securities and the Final Expiration
Date. The Company may temporarily suspend, for a period of time not to
exceed 90 days, the exercisability of the Rights in order to prepare and file
a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Common Stock upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Right Certificates to a
Person other than, or the issuance or delivery of certificates for the shares
of Common Stock in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
to deliver any certificates for shares of Common Stock upon the exercise of
any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that
no such tax is due.
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Section 10. COMMON STOCK RECORD DATE. Each Person in whose name any
certificate for shares of Common Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Common Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Common 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 Common Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder
of Common Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of shares of Common Stock or other
securities or property covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Stock payable in Common
Stock, (B) subdivide the outstanding Common Stock, (C) combine the
outstanding Common Stock into a smaller number of shares of Common Stock or
(D) issue any shares of its capital stock in a re-
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classification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in
this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall
be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior
to such date and at a time when the Common Stock transfer books of the
Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right.
(ii) Subject to Sections 23 and 24 of this Agreement, in the event
any Person becomes an Acquiring Person (the first occurrence of such event
being a "Section 11(a)(ii) Event"), then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to such
Person becoming an Acquiring Person multiplied by the number of one-half
shares of Common Stock for which a Right was exercisable immediately prior
to such Person becoming an Acquiring Person, whether or not such Right was
then exercisable, and (B) each holder of a Right, except as otherwise
provided in this Section 11(a)(ii) and Subsection 11(a)(iii) hereof, shall
thereafter have the right to receive, upon exercise at a price equal to the
Purchase Price (as so adjusted), in accordance with the
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terms of this Agreement, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one-half shares of Common Stock
for which a Right is then exercisable and dividing that product by (y) 50%
of the then current per share market price of the Company's Common Stock
(determined pursuant to Section 11(d) hereof) on the date such Person
became an Acquiring Person; PROVIDED, HOWEVER, that the Purchase Price
and the number of shares of Common Stock so receivable upon exercise of
a Right shall thereafter be subject to further adjustment as appropriate
in accordance with Section 11(f) hereof. Notwithstanding anything in
this Agreement to the contrary, however, from and after the time (the
"Invalidation Time") when any Person first becomes an Acquiring Person,
any Rights that are beneficially owned by (x) any Acquiring Person (or
any Affiliate or Associate of any Acquiring Person), (y) a transferee of
any Acquiring Person (or any such Affiliate or Associate) who becomes a
transferee after the Invalidation Time or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the Invalidation Time pursuant
to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights
or (II) a transfer which the Board of Directors has determined is part
of a plan, arrangement or understanding which has the purpose or effect
of avoiding the provisions of this paragraph, and subsequent transferees
of such Persons, shall be void without any further action, and any
holder of such Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this Agreement. The
Company shall use all reasonable efforts to ensure that the
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provisions of this Section 11(a)(ii) are complied with, but shall have
no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
From and after the Invalidation Time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that represents Rights
that are or have become void pursuant to the provisions of this
paragraph, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the
provisions of this paragraph shall be cancelled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights
that theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11(a)(ii). Notwithstanding
the occurrence of an adjustment in accordance with this Section
11(a)(ii), the Rights (other than those that have been invalidated
pursuant to this Section 11(a)(ii)), shall remain subject to redemption
pursuant to Section 23 hereof on the terms set forth herein.
(iii) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the
subparagraph (ii) of this Section 11(a), the Company shall take all such
action as may be necessary to authorize additional shares of Common Stock
for issuance upon exercise of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as may be
necessary to authorize such additional shares of Common Stock the Company
shall, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine
the excess
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of (1) the value of the shares of Common Stock issuable upon the exercise
of a Right in accordance with the foregoing subparagraph (ii) (the
"Current Value") over (2) the then current Purchase Price multiplied by
the number of shares of Common Stock for which a Right was exercisable
immediately prior to the time that the Acquiring Person became such
(such excess, the "Spread"), and (B) with respect to each Right (other
than Rights which have become void pursuant to Section 11(a)(ii)), make
adequate provision to substitute for the shares of Common Stock issuable
in accordance with subparagraph (ii) upon exercise of the Right and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) shares of Common Stock or other equity
securities of the Company (including, without limitation, shares or
fractions of shares of preferred stock which, by virtue of having
dividend, voting and liquidation rights substantially comparable to
those of the shares of Common Stock, are deemed in good faith by the
Board of Directors to have substantially the same value as the shares of
Common Stock (such shares of preferred stock and shares or fractions of
shares of preferred stock are hereinafter referred to as "Common Stock
equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having a value which, when added
to the value of the shares of Common Stock actually issued upon exercise
of such Right, shall have an aggregate value equal to the Current Value
(less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board of Directors upon the
advice of a nationally recognized investment banking firm selected in
good faith by the Board of Directors; PROVIDED, HOWEVER, that if the
Company shall not make adequate provision to deliver value pursuant to
clause (B) above within 30 days following the date that the
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Acquiring Person became such (the "Section 11(a)(iii) Trigger Date"), then
the Company shall be obligated to deliver, to the extent permitted
by applicable law and any material agreements then in effect to which
the Company is a party, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock
(to the extent available), and then, if necessary, such number of
fractions of shares of Common Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If, upon the date any Person becomes an Acquiring
Person, the Board of Directors shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, then, if
the Board of Director so elects, the 30-day period set forth above may
be extended to the extent necessary, but not more than 90 days after the
Section 11(a)(iii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares
(such 30-day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the second and/or third sentence
of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 11(a)(ii) hereof and the last sentence of this Section
11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such second sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily
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suspended, as well as a public announcement at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the shares of Common Stock shall be the current per share
market price (as determined pursuant to Section 11(d)(i)) on the Section
11(a)(iii) Trigger Date and the per share or fractional value of any
"Common Stock equivalent" shall be deemed to equal the current per share
market price of the Common Stock. The Board of Directors of the Company
may, but shall not be required to, establish procedures to allocate the
right to receive shares of Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of shares of Common Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase shares of Common Stock or Common
Stock equivalents or securities convertible into shares of Common Stock or
Common Stock equivalents at a price per share of Common Stock or Common Stock
equivalent (or having a conversion price per share, if a security convertible
into shares of Common Stock or Common Stock equivalent) less than the then
current per share market price of the Common Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares
of Common Stock and/or Common Stock equivalent so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of shares of Common Stock
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outstanding on such record date plus the number of additional shares of
Common Stock and/or Common Stock equivalents to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Shares of Common Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price that would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable in Common
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Common Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose
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determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
share of Common Stock and the denominator of which shall be such current per
share market price of the Common Stock; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company to
be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d)(i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
immediately prior to such date; PROVIDED, HOWEVER, that in the event that the
current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way in either case, as reported in the principal
consolidated
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transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in
use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Security selected by the
Board of Directors of the Company. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national securities
exchange on which the security is listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of an computation hereunder, the "current per share
market price" of the Common Stock shall be determined in accordance with the
method set forth in Section 11(d)(i). If the Common Stock is not publicly
held or so listed or traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
ten-thousandth of a share of Common Stock
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or one ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which require such adjustment
and (ii) the date of the expiration of the right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Common Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one-half shares of
Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of
one-half shares of Common Stock (calculated to the nearest one ten-thousandth
of a share of Common Stock) obtained by (A) multiplying (x) the number of
one-half shares of Common Stock covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
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adjustment of the Purchase Price and (B) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in substitution for any
adjustment in the number of one-half shares of Common Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
one-half shares of Common Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if
the Right Certificates have been issued, such record date shall be at least
10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates
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evidencing all the Rights to which such holders shall he entitled after such
adjustment. Right Certificates to be so distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one-half shares of Common Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one-half shares of
Common Stock which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Common Stock or
other shares of capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock or other such shares at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
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(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it, in its sole discretion, shall determine to be
advisable in order that any consolidation or subdivision of the Common Stock,
issuance wholly for cash of any Common Stock at less than the current per
share market price, issuance wholly for cash of Common Stock or securities
which by their terms are convertible into or exchangeable for Common Stock,
dividends on Common Stock payable in shares of Common Stock or issuance of
rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Common Stock shall not be
taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock)
into a greater or lesser number of shares of Common Stock, then in any such
case the Rights associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by
a fraction, of which the numerator shall be equal to the number of shares of
Common Stock outstanding immediately before such event and of which the
denominator is the number of shares of Common Stock outstanding immediately
after such event. The adjustments provided for in this Section 11(n) shall
be made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
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Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 23
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be
obligated or responsible for calculating any adjustment nor shall it be
deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event, directly or indirectly, at any time after a
Person has become an Acquiring Person, (i) the Company shall consolidate
with, or merge with and into, any other Person, (ii) any Person shall
consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and,
in connection with such merger, all or part of the Common Stock shall be
changed into or exchanged for stock or other securities of any other Person
(or the Company) or cash or any other property, or (iii) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company
or one or more of its wholly-owned Subsidiaries), then, and in each such
case, proper provision shall be made so that (A) each holder of a Right
(other than Rights that have become void pursuant to Section 11(a)(ii)) shall
thereafter have the right to receive, upon the exercise thereof at a price
equal
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to the then current Purchase Price multiplied by the number of one-half
shares of Common Stock for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of shares of Common Stock, such
number of validly issued, fully paid and non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as defined herein) not subject
to any liens, encumbrances, rights of first refusal or other adverse claims,
as shall equal the result obtained by (I) multiplying the then current
Purchase Price by the number of one-half shares of Common Stock for which a
Right is then exercisable and dividing that product by (II) 50% of the then
current per share market price of the Common Stock of such Principal Party
(determined in accordance to Section 11(d)(i) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; PROVIDED that
the Purchase Price and the number of shares of Common Stock of such Principal
Party issuable upon exercise of each Right shall be further adjusted as
provided in Section 11(f) of this Agreement to reflect any events occurring
in respect of such Principal Party after the date of such consolidation,
merger, sale or transfer; (B) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" shall thereafter be deemed to refer to such
Principal Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
shares of Common Stock in accordance with Section 9 hereof) in connection
with such consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon the
subsequent occurrence of any consolidation, merger, sale or transfer of
assets or other extraordinary transaction in respect of such Principal Party,
each holder of a Right
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shall thereupon be entitled to receive, upon exercise of a Right and payment
of the Purchase Price as provided in this Section 13(a), such cash, shares,
rights, warrants and other property which such holder would have been
entitled to receive had such holder, at the time of such transaction, owned
the Common Stock of the Principal Party receivable upon the exercise of a
Right pursuant to this Section 13(a), and such Principal Party shall take
such steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property.
(b) As used in this Section 13, "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or (ii)
of the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which the shares of Common Stock are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (iii) of the
first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or
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earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever
of such Persons as is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding; PROVIDED, HOWEVER, that in
any such case described in the foregoing clause (b)(i) or (b)(ii), if
the Common Stock of such Person is not at such time or has not been
continuously over the preceding 12-month period registered under Section
12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been
so registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly,
of more than one Person, and the Common Stocks of all of such persons
have been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of Common Stock having the
greatest aggregate market value of shares outstanding, or (3) if such
Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall
apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of
such joint venturers, and the Principal Party in each such case shall
bear the obligations set forth in this Section 13 in the same ratio as
its interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections
13(a) and (b) hereof shall promptly be performed in accordance with their
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terms and that such consolidation, merger, sale or transfer of assets shall
not result in a default by the Principal Party under this Agreement as the
same shall have been assumed by the Principal Party pursuant to Sections
13(a) and (b) hereof and providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal Party
will:
(i) prepare and file a registration statement under the Securities
Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its
best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its best efforts to cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the Final
Expiration Date, and similarly comply with applicable state securities
laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall be listed or admitted to trading on national securities
exchange, to list or admit to trading (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on such
securities exchange, or, if the Common Stock of the Principal Party shall
not be listed or admitted to trading on a national securities exchange, to
cause the Rights and the securities receivable upon exercise of the Rights
to be reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
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(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to
purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders of
Rights pursuant to this Section 13), in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares
of Common Stock of such Principal Party at less than the then current per
share market price thereof (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then current per share market price, or
(ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any
such transaction unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party
shall have been cancelled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision will have no
effect in connection with, or as a consequence of, the consummation of the
proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after a Person first becomes an Acquiring Person enter into any transaction
of the type contemplated by any of clauses (i) - (iii) of Section 13(a)
hereof if (x) at the time of or immediately after such consolidation,
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merger, sale, transfer or other transaction there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights, (y) prior to, simultaneously with or immediately
after such consolidation, merger, sale, transfer of other transaction, the
stockholders of the Person who constitutes, or would constitute, the
Principal Party for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (z) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use or, if on any
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such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares
of Common Stock upon the exercise or exchange of Rights. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock
(as determined in accordance with Section 14(a) hereof) for the Trading Day
immediately prior to the date of such exercise or exchange.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), may,
in his
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own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations
of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right thus:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or agency of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of transfer;
and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the
associated Common Stock certificate made by anyone other than the Company
or the Rights
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Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly. The
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costs and expenses of enforcing this right of indemnification shall also be
paid by the company. The indemnification provided for hereunder shall
survive the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and shall be protected
and shall incur no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Common Stock or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof. Notwithstanding anything in
this Agreement to the contrary, in no event shall the Rights Agent be liable
for special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has
been advised of the likelihood of such loss or damage and regardless of the
form of the action.
(c) Notwithstanding anything in this Agreement to the contrary, in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of the action.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation
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succeeding to the stock transfer or corporate trust powers of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company
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and the holders of Right Certificates, by their acceptance thereof, shall be
bound, and no implied duties or obligations shall be read into this Agreement
against the Rights Agent:
(a) Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by my one of the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President,
the Treasurer or the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful
misconduct
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
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(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void in
accordance with Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in
Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Stock to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Common Stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the
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Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while
waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted
by the Rights Agent under this Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective.
The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application
(which date shall not be less than five Business Days after the date any
officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lead money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys
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or agents, and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default, neglect
or misconduct.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has not been completed to certify the
holder is not an Acquiring Person (or an Affiliate or Associate thereof),
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(l) The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate)
under this Agreement unless and until the rights Agent shall be
specifically notified in writing by the Company of such fact, event or
determination.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Stock by registered or
certified
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mail, and, at the expense of the Company, to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court shall
be a corporation organized and doing business under the laws of the
United States (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution
in such state), in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has
at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; 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
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date of any such appointment, the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the
Common Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and
the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the
issuance or sale of Common Stock following the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration
Date, the Company may with respect to shares of Common Stock so issued
or sold pursuant to (i) the exercise of stock options, (ii) under any
employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or
(iv) a contractual obligation of the Company in each case existing prior
to the Distribution Date, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale.
Section 23. REDEMPTION. (a) The Company may, at its option, by
action of a majority of the Board of Directors (including, following a
Section 11(a)(ii) Event, a Requisite Majority) at any time prior to the
Close of Business on the earlier of (i) the 10th business day after the
Stock Acquisition
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Date and (ii) the Final Expiration Date, redeem all but not less than
all the then outstanding Rights at a redemption price of $0.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"). The
redemption of the Rights by the Board of Directors of the Company may be
made effective at such time, on such basis and with such conditions as
the Board of Directors of the Company, in its sole discretion may
establish. The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based on the current market price of the
Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of a majority of the Board of
Directors of the Company (including, following a Section 11(a)(ii)
Event, a Requisite Majority) ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23 (or at such later time as
the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such
redemption; PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors of the
Company ordering the redemption of the Rights, the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights
at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of
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redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any
time in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than in connection with
the purchase of Common Stock prior to the Distribution Date.
Section 24. EXCHANGE. (a) The Board of Directors of the Company
may, at its option, at any time after any Person first becomes an
Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more
of the Common Stock then outstanding. From and after the occurrence of
an event specified in Section 13(a) hereof, any Rights that theretofore
have not been exchanged pursuant to this Section 24(a) shall thereafter
be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). The exchange of the Rights by
the Board of Directors may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole
discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action
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and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock equal to the number
of such Rights hold by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method
by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary
to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(d) The Company shall not be required to issue fractions of a
share of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such shares of fractional Common
Stock would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole share
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of Common Stock. For the purposes of this Section 24(d), the current
market value of a whole share of Common Stock shall be the closing price
of a share of Common Stock (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company
shall at any time after the earlier of the Distribution Date and the
Stock Acquisition Date propose (i) to pay any dividend payable in stock
of any class to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Common
Stock rights or warrants to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of
its Common Stock (other than a reclassification involving only the
subdivision or combination of outstanding Common Stock), (iv) to effect
any consolidation or merger with or into, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to, any other Person, (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Stock payable in Common Stock or to effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common
Stock), then, in each such case, the Company shall give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification. consolidation, merger, sale,
transfer, liquidation,
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dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least 10 days prior to the record date for determining
holders of the Common Stock for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
the Common Stock, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) or Section 13
hereof shall occur, then the Company shall as soon as practicable thereafter
give to each holder of a Right Certificate (or if occurring prior to the
Distribution Date, the holders of the Common Stock), in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) or Section 13 hereof, as the case may be.
Section 26. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent
by registered or certified mail and deemed given upon receipt, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Pennaco Energy, Inc.
1050 17th Street
Suite 700
Denver, Colorado 80265
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights
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Agent shall be sufficiently given or made if sent by registered or certified
mail and shall be deemed given upon receipt, addressed (until another address
is filed in writing with the Company) as follows:
Harris Trust and Savings Bank
700 Louisiana
Suite 3350
Houston, Texas 77002
Attention: Administrator
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Except as otherwise provided
in this Section 27, for so long as the Rights are then redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall
if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights,
including, without limitation, as long as the Rights are then redeemable, to
extend the period during which the Rights may be redeemed. At any time when
the Rights are no longer redeemable, except as otherwise provided in this
Section 27, the Company may, and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) shorten or lengthen
any time period hereunder, or (iv) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable;
PROVIDED that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an
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Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such amendment may cause the rights again to become redeemable or cause the
Agreement again to become amendable other than in accordance with this
sentence. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which decreases the
Redemption Price. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement will be effective against
the Rights Agent without the execution of such supplement or amendment by the
Rights Agent.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Stock).
Section 30. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company or to
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the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) that are done or made by
the Board of Directors of the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 32. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Nevada and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
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Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
PENNACO ENERGY, INC.
By: /s/ Paul M. Rady
----------------------------------------
Paul M. Rady
President and Chief Executive Officer
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By: /s/ Lorraine Rodewald
----------------------------------------
Lorraine Rodewald
Assistant Vice President
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EXHIBIT A
Form of Right Certificate
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER MARCH 9, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Pennaco Energy, Inc.
This certifies that ___________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of February _____, 1999 (the
"Rights Agreement"), between Pennaco Energy, Inc., a Nevada corporation (the
"Company"), and Harris Trust and Savings Bank (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M., Denver,
Colorado time, on March 9, 2009 at the principal office of the Rights Agent,
or at the office of its successor as Rights Agent, one-half of a fully paid,
non-assessable share of Common Stock, par value $0.001 per share, of the
Company (the "Common Stock") at a purchase price of $20 (subject to
adjustment as provided in the Rights Agreement) per one-half of a share of
Common Stock (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of
one-half shares of Common Stock which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of March 9, 1999, based on the Common Stock as constituted
at such date. As provided in the Rights Agreement, the Purchase Price and
the number of one-half shares of Common Stock which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right
A-1
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Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Common Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate (i) may be redeemed by the Company at a redemption
price of $0.01 per Right or (ii) may be exchanged in whole or in part for
shares of the Company's Common Stock.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one-half shares of Common Stock, which may, at the election of
the Company, be evidenced by depositary receipts), but, in lieu thereof, a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Common Stock or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ______________________________, _______.
A-2
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PENNACO ENERGY, INC.
ATTEST:
By
- ------------------------------- -------------------------------
Name: Name:
Title: Title:
Countersigned: Harris Trust and Savings Bank, as Rights Agent
By
-------------------------------
Name:
Title:
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<PAGE>
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________________ hereby sells, assigns
and transfers onto
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _______________________, ______
Signature _______________________________
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
_______________________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
Signature ______________________________
_______________________________________________________________________________
A-4
<PAGE>
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: Pennaco Energy, Inc.
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights and requests that
certificates for such shares of Common Stock be issued in the name of:
Please insert social security ______________________
or other identifying number ______________________
______________________ ______________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security ______________________
or other identifying number ______________________
______________________ ______________________
(Please print name and address)
Dated: ________________, ______
Signature ______________________________
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
A-5
<PAGE>
(Form of Reverse Side of Right Certificate -- continued)
_______________________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
Signature ______________________________
_______________________________________________________________________________
A-6
<PAGE>
NOTICE
The signature in the Form of Assignment or Form of Election to Purchase,
as the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed,
the Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
A-7
<PAGE>
[FACE OF CERTIFICATE]
SPECIMEN SPECIMEN
COMMON STOCK COMMON STOCK
NUMBER PENNACO ENERGY SHARES
INCORPORATED UNDER THE LAWS SEE REVERSE FOR CERTAIN
OF THE STATE OF NEVADA DEFINITIONS AND
RESTRICTIONS
THIS CERTIFICATE IS TRANSFERABLE CUSIP 708046 10 7
EITHER IN CHICAGO, IL OR
IN NEW YORK, NY
THIS IS TO CERTIFY THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF THE PAR
VALUE OF $.001 PER SHARE OF
PENNACO ENERGY, INC.
(the "Corporation") transferable on the books of the Corporation by the
holder hereof in person or by duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate is not valid until
countersigned by the Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
[Pennaco Energy, Inc. Seal]
SECRETARY PRESIDENT AND CHIEF
EXECUTIVE OFFICER
COUNTERSIGNED AND REGISTERED:
HARRIS TRUST AND SAVINGS BANK
TRANSFER AGENT AND REGISTRAR,
BY
AUTHORIZED SIGNATURE
<PAGE>
[REVERSE OF CERTIFICATE]
PENNACO ENERGY, INC.
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Pennaco Energy, Inc. and
Harris Trust and Savings Bank (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on file at
the principal executive offices of Pennaco Energy, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed or be evidenced by separate certificates and will no longer be
evidenced by this certificate. Pennaco Energy, Inc. will mail to the holder
of this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances, as set
forth in the Rights Agreement, Rights owned by or transferred to any Person
who becomes an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), and certain transferees thereof,
will become null and void and will no longer be transferable.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act _________________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, __________________ hereby sell, assign, and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL
ZIP CODE OF ASSIGNEE
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________________ Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute
-2-
<PAGE>
and appoint___________________________________________________________________
______________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Company
with full power of substitution in the premises.
Dated,_________________
X ______________________________________
(SIGNATURE)
X ______________________________________
(SIGNATURE)
NOTICE: THE SIGNATURE(S) TO THE
ASSIGNMENT MUST CORRESPOND
WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THIS CERTIFICATE
IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED BY: _________________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
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