SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) January 21, 1996
The Williams Companies, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 1-4174 73-0569878
(STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER
JURISDICTION FILE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION)
One Williams Center, Tulsa, Oklahoma 74172
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (918) 588-2000
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ITEM 5
On January 21, 1996, the Board of Directors of The
Williams Companies, Inc. (the "Company") adopted a Stockholder
Rights Plan (the "Rights Plan") to replace its existing rights
plan which expires at the close of business February 6, 1996.
Under the Rights Plan, rights ("Rights") will be distributed at
the close of business on February 6, 1996 as a dividend at the
rate of one Right for each share of common stock, par value $1.00
per share (the "Common Stock"), of the Company held by
stockholders of record as of the close of business on February 6,
1996. Each Right entitles the registered holder to purchase from
the Company a unit (a "Unit") consisting of one two-hundredth of
a share of Series A Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), at a purchase
price of $140.00 per Unit (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in the form of Rights Agreement (the "Rights Agreement"),
dated as of February __, 1996, between the Company and First
Chicago Trust Company of New York, as Rights Agent (the "Rights
Agent"). Also on January 21, 1996, the Company's Board of
Directors increased the number of authorized shares of Preferred
Stock from 400,000 shares to 1,200,000 shares.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights Certificate will be distributed. The Rights will
separate from the Common Stock and a Distribution Date will occur
upon the earlier of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (the "Stock Acquisition Date"), (ii) 10
business days following the commencement of a tender offer or
exchange offer that would result in a person or group
beneficially owning 15% or more of such outstanding shares of
Common Stock, or (iii) 10 business days after the Board of
Directors of the Company determines any person, alone or together
with its affiliates and associates, has become the Beneficial
Owner of an amount of Common Stock which the Board of Directors
determines to be substantial (which amount shall in no event be
less than 10% of the shares of Common Stock outstanding) and at
least a majority of the Board of Directors who are not officers
of the Company, after reasonable inquiry and investigation,
including consultation with such persons as such directors shall
deem appropriate, shall determine that (a) such beneficial
ownership by such person is intended to cause the Company to
repurchase the Common Stock beneficially owned by such persons or
to cause pressure on the Company to take action or enter into a
transaction or series of transactions intended to provide such
person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term
interests of the Company and its stockholders would not be served
by taking such action or entering into such transactions or
series of transactions at that time or (b) such beneficial
ownership is causing or reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's
ability to maintain its competitive position) on the business or
prospects of the Company (any such person being referred to
herein as an "Adverse Person"). Until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates will contain a
notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on February 6,
2006 unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to
the Distribution Date will be issued with Rights.
In the event that (i) an Acquiring Person becomes the
beneficial owner of 15% or more of the then outstanding shares of
Common Stock (unless such acquisition is made pursuant to a
tender or exchange offer for all outstanding shares of the
Company, at a price determined by a majority of the independent
directors of the Company who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person to be fair and
otherwise in the best interest of the Company and its
stockholders), or (ii) the Board of Directors determines that a
Person is an Adverse Person, each holder of a Right will
thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities
of the Company), having a value equal to two times the Exercise
Price of the Right. The Exercise Price is the Purchase Price
times the number of shares of Common Stock associated with each
Right (initially, one). Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this
paragraph (the "Flip-In Events"), all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the occurrence of
any of the Flip-In Events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth
below.
In the event that following the Stock Acquisition Date,
(i) the Company engages in a merger or business combination
transaction in which the Company is not the surviving corporation
(other than a merger that follows a tender offer determined to be
fair to the stockholders of the Company, as described in the
preceding paragraph); (ii) the Company engages in a merger or
business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is
changed or exchanged; or (iii) 50% or more of the Company's
assets, cash flow or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been
voided as set forth above) shall thereafter have the right to
receive, upon exercise of the Right, Common Stock of the
acquiring company having a value equal to two times the Exercise
Price of the Right.
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable upon
exercise of the Rights, are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustments in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional Units will be
issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time until 10 days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $0.01 per Right. Immediately upon the
action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $0.01 redemption price.
The Board has the right to redeem all or a portion of
the Rights following the occurrence of a Flip-In Event by
exchanging shares of Common Stock (or equivalent units of
Preferred Stock) for outstanding Rights at a ratio of one to one.
Upon exercise of the exchange feature, Rights held by all
shareholders will be exchanged (on a pro rata basis if less than
all of the Rights are to be exchanged), other than those held by
an "Acquiring Person" which in accordance with the terms of the
plan would have become null and void.
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) of the Company as set forth above.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions
of the Rights Agreement may be amended by the Board in order to
cure any ambiguity, to make changes which do not adversely affect
the interests of holders of Rights (excluding the interests of
any Acquiring Person or Adverse Person), or to shorten or
lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement is filed as an Exhibit
hereto. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to
the Rights Agreement, which is incorporated herein by reference.
ITEM 7
(c) Exhibits
4. Form of Rights Agreement, dated as of February ,
1996, between The Williams Companies, Inc. and First
Chicago Trust Company of New York.
99. Press release, dated January 22, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
THE WILLIAMS COMPANIES, INC.
(Registrant)
By: /s/ DAVID M. HIGBEE
David M. Higbee
Corporate Secretary
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EXHIBIT 4
[FORM OF RIGHTS AGREEMENT]
THE WILLIAMS COMPANIES, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
Rights Agent
Rights Agreement
Dated as of February 6, 1996
Table of Contents
Section Page
1. Certain Definitions . . . . . . . . . . . . 2
2. Appointment of Rights Agent . . . . . . . . 9
3. Issue of Rights Certificates . . . . . . . 10
4. Form of Rights Certificates . . . . . . . . 14
5. Countersignature and Registration . . . . . 16
6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . 17
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . 19
8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . 25
9. Reservation and Availability of Capital
Stock . . . . . . . . . . . . . . . . . . 26
10. Preferred Stock Record Date . . . . . . . 30
11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights . . . . 31
12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . 54
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power . . . . . . . . 54
14. Fractional Rights and Fractional Shares . 61
15. Rights of Action . . . . . . . . . . . . . 64
16. Agreement of Rights Holders . . . . . . . 65
17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . 67
18. Concerning the Rights Agent . . . . . . . 67
19. Merger or Consolidation or Change of Name
of Rights Agent . . . . . . . . . . . . . 69
20. Duties of Rights Agent . . . . . . . . . . 70
21. Change of Rights Agent . . . . . . . . . . 75
22. Issuance of New Rights Certificates . . . 77
23. Redemption and Termination . . . . . . . . 78
24. Notice of Certain Events . . . . . . . . . 83
25. Notices . . . . . . . . . . . . . . . . . 86
26. Supplements and Amendments . . . . . . . . 87
27. Successors . . . . . . . . . . . . . . . . 88
28. Determinations and Actions by the Board,
etc. . . . . . . . . . . . . . . . . . . . 88
29. Benefits of this Agreement . . . . . . . . 90
30. Severability . . . . . . . . . . . . . . . 90
31. Governing Law . . . . . . . . . . . . . . 91
32. Counterparts . . . . . . . . . . . . . . . 91
33. Descriptive Headings . . . . . . . . . . . 91
Exhibit A -- Form of Rights Certificate
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of February 6, 1996
(the "Agreement"), between The Williams Companies, Inc.,
a Delaware corporation (the "Company"), and First Chicago
Trust Company of New York, (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Company entered into a Rights
Agreement, dated as of January 26, 1986, as amended, with
Morgan Guaranty Trust Company of New York, as Rights
Agent, which Rights Agreement shall expire on February 6,
1996;
WHEREAS, on January 21, 1996 (the "Rights
Dividend Declaration Date"), the Board of Directors (the
"Board") of the Company authorized and declared a
dividend distribution of one Right for each share of
common stock, par value $1 per share, of the Company
outstanding at the close of business on February 6, 1996
(the "Record Date"), and has authorized the issuance of
one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for
each share of Common Stock of the Company issued between
the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date
(as such term is defined in Section 3 hereof) each Right
initially representing the right to purchase one
two-hundredth of a share of Series A Junior Participating
Preferred Stock of the Company having the rights, powers
and preferences set forth in the Company's Restated
Certificate of Incorporation (the "Certificate of
Incorporation"), upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
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 who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner
of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee benefit
plan of the Company or of any Subsidiary of the Company,
(iv) any Person or entity organized, appointed or
established by the Company for or pursuant to the terms
of any such plan or (v) any such Person who has reported
or is required to report such ownership (but who is the
Beneficial Owner of less than 20% of the shares of Common
Stock outstanding) on Schedule 13G under the Exchange Act
(or any comparable or successor report) or on Schedule
13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state any
intention to or reserve the right to control or influence
the management or policies of the Company or engage in
any of the actions specified in Item 4 of such Schedule
(other than the disposition of the Common Stock) and,
within 10 Business Days of being requested by the Company
to advise it regarding the same, certifies to the Company
that such Person acquired shares of Common Stock in
excess of 14.9% inadvertently or without knowledge of the
terms of the Rights and who, together with all Affiliates
and Associates, thereafter does not acquire additional
shares of Common Stock while the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding;
provided, however, that if the Person requested to so
certify fails to do so within 10 Business Days, then such
Person shall become an Acquiring Person immediately after
such 10 Business Day Period.
(b) "Adverse Person" shall mean any
Person declared to be an Adverse Person by the Board upon
determination that the criteria set forth in Section
11(a)(ii)(B) apply to such Person.
(c) "Affiliate" and "Associate" shall
have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended and in effect
on the date of this Agreement (the "Exchange Act").
(d) A Person shall be deemed the
"Beneficial Owner" of, and shall be deemed to
"beneficially own," any securities:
(i) which such Person or any of
such Person's Affiliates or Associates,
directly or indirectly, has the right to
acquire (whether such right is exercisable
immediately or only after the passage of time)
pursuant to any agreement, arrangement or
understanding (whether or not in writing) or
upon the exercise of conversion rights,
exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's
Affiliates or Associates until such tendered
securities are accepted for purchase or
exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights
from and after the occurrence of a Triggering
Event which Rights were acquired by such Person
or any of such Person's Affiliates or
Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section
11(a)(i) hereof in connection with an
adjustment made with respect to any Original
Rights;
(ii) which such Person or any of
such Person's Affiliates or Associates,
directly or indirectly, has the right to vote
or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the
Exchange Act), including pursuant to any
agreement, arrangement or understanding,
whether or not in writing; provided, however,
that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially
own," any security under this subparagraph (ii)
as a result of an agreement, arrangement or
understanding to vote such security if such
agreement, arrangement or understanding: (A)
arises solely from a revocable proxy given in
response to a public proxy or consent
solicitation made pursuant to, and in
accordance with, the applicable provisions of
the General Rules and Regulations under the
Exchange Act, and (B) is not also then
reportable by such Person 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 (or
any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement
or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii)
of this paragraph (c)) or disposing of any
voting securities of the Company; provided,
however, that nothing in this paragraph (d)
shall cause a person engaged in business as an
underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any
securities acquired through such person's
participation in good faith in a firm
commitment underwriting until the expiration of
forty days after the date of such acquisition.
(e) "Business Day" shall mean any day
other than a Saturday, Sunday or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
(f) "Close of business" on any given date
shall mean 5:00 P.M., Tulsa, Oklahoma time, on such date;
provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., Tulsa, Oklahoma time, on the
next succeeding Business Day.
(g) "Common Stock" shall mean the common
stock, par value $1 per share, of the Company, except
that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or
the equity securities or other equity interest having
power to control or direct the management, of such
Person.
(h) "Person" shall mean any individual,
firm, corporation, partnership or other entity.
(i) "Preferred Stock" shall mean shares
of Series A Junior Participating Preferred Stock, par
value $1 per share, of the Company, and, to the extent
that there are not a sufficient number of shares of
Series A Junior Participating Preferred Stock authorized
to permit the full exercise of the Rights, any other
series of Preferred Stock of the Company designated for
such purpose containing terms substantially similar to
the terms of the Series A Junior Participating Preferred
Stock.
(j) "Section 11(a)(ii) Event" shall mean
any event described in Section 11(a)(ii) hereof.
(k) "Section 13 Event" shall mean any
event described in clauses (x), (y) or (z) of Section
13(a) hereof.
(l) "Stock Acquisition Date" shall mean
the first date of public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(m) "Subsidiary" shall mean, with
reference to any Person, any corporation of which an
amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(n) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
(o) The following terms shall have the
meaning specified in the indicated Section or Sections of
this Agreement:
Defined Term Section
Act 8(c)
Adjustment Shares 11(a)(ii)
Agreement Recitals
Board Recitals
Certificate of Incorporation Recitals
Common Stock Equivalents 11(a)(iii)
Company Recitals, 13(a)
Current Market Price 11(d)(ii)
Current Value 11(a)(iii)
Distribution Date 3(a)
Equivalent Preferred Stock 11(b)
Expiration Date 7(a)
Final Expiration Date 7(a)
Preferred Stock Recitals
Principal Party 13(b)
Purchase Price 4(a), 11(a)(ii),
13(a)
Record Date Recitals
Redemption Price 23(a)
Rights Recitals
Rights Agent Recitals
Rights Certificates 3(a)
Rights Dividend Declaration Date Recitals
Section 11(a)(ii) Trigger Date 11(a)(iii)
Spread 11(a)(iii)
Substition Period 11(a)(iii)
Summary of Rights 3(b)
Trading Days 11(d)(i)
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 Rights Certificates.
(a) Until the earliest of (i) the close
of business on the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition
Date occurs before the Record Date, the close of business
on the Record Date), (ii) the close of business on the
tenth Business Day (or such later date as the Board shall
determine) after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any Person
organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding or (iii) the
close of business on the tenth Business Day after the
Board determines, pursuant to the criteria set forth in
Section 11(a)(ii)(B) hereof, that a Person is an Adverse
Person (the earliest of (i), (ii) and (iii) being herein
referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common
Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall
be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer
to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each
record holder of the 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, one or more
right certificates, in substantially the form of Exhibit
A hereto (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) With respect to certificates for the
Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the earlier of
the Distribution Date or the Expiration Date (as such
term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in
respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of
all shares of Common Stock which are issued (whether
originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and
entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between The
Williams Companies, Inc. (the "Company") and
First Chicago Trust Company of New York (the
"Rights Agent"), dated as of February 6, 1996,
(the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and
a copy of which is on file at the principal
offices of The Williams Companies, Inc. Under
certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be
evidenced by this certificate. The Williams
Companies, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without
charge promptly after receipt of a written
request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was
or becomes an Acquiring Person, an Adverse
Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights
Agreement), whether currently held by or on
behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the
foregoing legend, until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such
certificates shall be evidenced by such certificates
alone and registered holders of Common Stock shall also
be the registered holders of the associated Rights, and
the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the
forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit A hereto
and may have such marks of identification or designation
and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof
to purchase such number of one two-hundredths of a share
of Preferred Stock as shall be set forth therein at the
price set forth therein (such exercise price per one
two-hundredth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued
pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (i) an
Acquiring Person, an Adverse Person or any Associate or
Affiliate of an Acquiring Person or an Adverse Person,
(ii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person or
Adverse Person becomes such, or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person or the Adverse
Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration)
from the Acquiring Person or the Adverse Person to
holders of equity interests in such Acquiring Person or
Adverse Person or to any Person with whom such Acquiring
Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined
is part of a plan, arrangement or understanding which has
as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person or
an Adverse Person or an Affiliate or Associate
of an Acquiring Person or an Adverse Person (as
such terms are defined in the Rights
Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either
manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned (or by facsimile if permitted by law) by
the Rights Agent, and shall not be valid for any purpose
unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may
be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to
sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was
not such an officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise
or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of
the Rights Certificates, the number of Rights evidenced
on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates. (a) Subject to the
provisions of Section 4(b), Section 7(e) and 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 Expiration Date, any Rights Certificate
or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number
of one two-hundredths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then
entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights 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 Rights
Certificates.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them,
and 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
Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) Subject to Section 7(e)
hereof, the registered holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation,
the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form
of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number
of one two-hundredths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as
to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) the close of business on
February 6, 2006 (the "Final Expiration Date"), or (ii)
the time at which the Rights are redeemed as provided in
Section 23 hereof (the earlier of (i) and (ii) being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one two-
hundredth of a share of Preferred Stock pursuant to the
exercise of a Right shall initially be $140.00, and shall
be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of
election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one two-hundredth of
a share of Preferred Stock (or other shares, securities,
cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or
make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of one
two-hundredths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the
total number of shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one two-hundredths of a share
of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company
will direct the depositary agent to comply with such
request, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and
(iv) after receipt thereof, deliver such cash, if any, to
or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified bank check,
bank draft or money order payable to the order of the
Company. In the event that the Company is obligated to
issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make
all arrangements necessary so that such other securities,
cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any
Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this
Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person, an Adverse
Person or an Associate or Affiliate of an Acquiring
Person or an Adverse Person, (ii) a transferee of an
Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee after
the Acquiring Person or the Adverse Person becomes such,
or (iii) a transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with
the Acquiring Person or the Adverse Person becoming such
and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the
Acquiring Person or the Adverse Person to holders of
equity interests in such Acquiring Person or Adverse
Person or to any Person with whom the Acquiring Person or
the Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined
is part of a plan, arrangement or understanding which has
as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have
any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or any
other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or an
Adverse Person or any of their respective Affiliates,
Associates or transferees hereunder.
(f) 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 upon the occurrence
of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed
and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates surrendered
for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the
Company or 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 Rights 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
Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to
the Company, or shall, at the written request of the
Company, destroy or cause to be destroyed, such cancelled
Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of
Capital 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 Preferred Stock
(and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares
of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement, including Section
11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred
Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed
on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time
as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best
efforts to (i) file, as soon as practicable following the
earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Securities Act
of 1933 (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for
such securities and (B) the date of the expiration of the
Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not
to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and
file such registration statement 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. In addition,
if the Company shall determine that a registration
statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement
has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not
have been obtained, the exercise thereof shall not be
permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that
it will take all such action as may be necessary to
ensure that all one two-hundredths of a share of
Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) 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
Rights Certificates and of any certificates for a number
of one two-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be)
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 Rights
Certificates to a Person other than, or the issuance or
delivery of a number of one two-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities,
as the case may be) in respect of a name other than that
of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or
deliver any certificates for a number of one
two-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in a
name other than that of the registered holder upon the
exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each
person in whose name any certificate for a number of one
two-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such
fractional shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment
is a date upon which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number of Rights. The
Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event that the Company
shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, 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
Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and
kind of shares of Preferred Stock or capital stock, as
the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open,
he or she would have owned upon such exercise and been
entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Person shall become an Acquiring
Person, unless the event causing such Person to
become an Acquiring Person is a transaction set
forth in Section 13(a) hereof or is an acquisition
of shares of Common Stock pursuant to a tender offer
or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by
at least a majority of the members of the Board who
are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates
of an Acquiring Person or an Adverse Person, after
receiving advice from one or more investment banking
firms, to be (a) at a price which is fair to
stockholders (taking into account all factors which
such members of the Board deem relevant including,
without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on
an orderly basis designed to realize maximum value)
and (b) otherwise in the best interests of the
Company and its stockholders, or
(B) the Board shall declare any Person to
be an Adverse Person, upon a determination that such
Person, alone or together with its Affiliates and
Associates, has become the Beneficial Owner of an
amount of Common Stock which the Board determines to
be substantial (which amount shall in no event be
less than 10% of the shares of Common Stock then
outstanding) and a determination by a majority of
the Board who are not officers of the Company after
reasonable inquiry and investigation, including
consultation with such persons as such directors
shall deem appropriate, that (a) such Beneficial
Ownership by such Person is intended to cause the
Company to repurchase the Common Stock beneficially
owned by such Person or to cause pressure on the
Company to take action or enter into a transaction
or series of transactions intended to provide such
Person with short-term financial gain under
circumstances where such directors determine that
the best long-term interests of the Company and its
stockholders would not be served by taking such
action or entering into such transaction or series
of transactions at that time or (b) such Beneficial
Ownership is causing or reasonably likely to cause a
material adverse impact (including, but not limited
to, impairment of relationships with customers or
impairment of the Company's ability to maintain its
competitive position) on the business or prospects
of the Company;
then, promptly following the occurrence of any event
described in 11(a)(ii)(A) or 11(a)(ii)(B) hereof,
proper provision shall be made so that each holder
of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one two-hundredths
of a share of Preferred Stock, 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 then number of one
two-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event,
and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as
the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date of
such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) In the event that the number of shares
of Common Stock which are authorized by the Certificate
of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company
shall (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current
Value"), and (B) with respect to each Right (subject to
Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon the exercise
of a Right and payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of
shares, of preferred stock, such as the Preferred Stock,
which the Board has deemed to have essentially the same
value or economic rights as shares of Common Stock (such
shares of preferred stock being referred to as "Common
Stock Equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current
Value (less the amount of any reduction in the Purchase
Price), where such aggregate value has been determined by
the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board;
provided, however, that if the Company shall not have
made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later
of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Purchase
Price, 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. For
purposes of the preceding sentence, the term "Spread"
shall mean the excess of (i) the Current Value over (ii)
the Purchase Price. If the Board determines 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, the thirty (30) day
period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company
may seek shareholder approval for the authorization of
such additional shares (such thirty (30) day period, as
it may be extended, is herein called the "Substitution
Period"). To the extent that action is to be taken
pursuant to the first and/or third sentences of this
Section 11(a)(iii), the Company (1) shall provide,
subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (2) may
suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek
such shareholder approval for such authorization of
additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no
longer in effect. For purposes of this Section
11(a)(iii), the value of each Adjustment Share shall be
the Current Market Price per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the per share or
per unit value of any Common Stock Equivalent shall be
deemed to equal the current market price per share of the
Common Stock on such date.
(b) In case the Company shall fix a
record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record
date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred
Stock ("equivalent preferred stock")) or securities
convertible into Preferred Stock or equivalent preferred
stock at a price per share of Preferred Stock or per
share of equivalent preferred stock (or having a
conversion price per share, if a security convertible
into Preferred Stock or equivalent preferred stock) less
than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred 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 Preferred Stock outstanding on
such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so
to be offered) would purchase at such current market
price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred
Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible
securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be
as determined in good faith by the Board, whose
determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred
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 or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a
record date for a distribution to all holders of
Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash
dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in
stock other than Preferred 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
current market price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good
faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such current
market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock. 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 be adjusted to be the
Purchase Price which would have been in effect if such
record date had not been fixed.
(d) (i) For the purpose of any
computation hereunder, other than computations made
pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date,
and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Market Price per share of
Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that
in the event that the Current Market Price per share of
the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, then,
and in each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the shares of Common Stock are listed
or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the Nasdaq
Stock Market consolidated reporting system or such other
system then in use, or, if on any such date the shares of
Common Stock 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
Common Stock selected by the Board. If on any such date
no market maker is making a market in the Common Stock,
the fair value of such shares on such date as determined
in good faith by the Board shall be used. The term
"Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or
traded, Current Market Price per share shall mean the
fair value per share as determined in good faith by the
Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of
Preferred Stock shall be determined in the same manner as
set forth above for the Common Stock in clause (i) of
this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly
held or listed or traded in a manner described in clause
(i) of this Section 11(d), the Current Market Price per
share of Preferred Stock shall be conclusively deemed to
be an amount equal to 200 (as such number may be
appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded,
Current Market Price per share of the Preferred Stock
shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes
of this Agreement, the Current Market Price of a Unit
shall be equal to the Current Market Price of one share
of Preferred Stock divided by 200.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an
increase or decrease of at least one percent (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 ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred
Stock, 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 (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made
pursuant to Section 11(a)(ii) or Section 13(a) hereof,
the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other
than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect
to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred 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
two-hundredths of a share of Preferred 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 two-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one two-hundredths of a
share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the
date of any adjustment of the Purchase Price to adjust
the number of Rights, in lieu of any adjustment in the
number of one two-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of one
two-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such
adjustment of the number of Rights 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 Rights Certificates
have been issued, shall be at least ten (10) days later
than the date of the public announcement. If Rights
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 Rights Certificates
on such record date Rights 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 Rights Certificates
held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights 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 two-
hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express
the Purchase Price per one two-hundredth of a share and
the number of one two-hundredths of a share which were
expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would
cause an adjustment reducing the Purchase Price below the
then stated value, if any, of the number of one two-
hundredths of a share of Preferred 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
such number of one two-hundredths of a share of Preferred
Stock 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 issuance to the holder of any Right
exercised after such record date the number of one
two-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of
one two-hundredths of a share of Preferred 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
(fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith
judgment the Board shall determine to be advisable in
order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the current market
price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred
Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that
it shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related
transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale 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 or (y) prior to, simultaneously
with or immediately after such consolidation, merger or
sale, the shareholders 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 and Associates.
(o) The Company covenants and agrees
that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the
contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number
of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date,
shall be proportionately adjusted so that the number of
Rights thereafter 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 the numerator of which shall be the
total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the
occurrence of such event.
(q) The failure by the Board to declare a
Person to be an Adverse Person following such Person
becoming the Beneficial Owner of 10% or more of the
outstanding Common Stock shall not imply that such Person
is not an Adverse Person or limit the Board's right at
any time in the future to declare such Person to be an
Adverse Person.
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares. Whenever an adjustment is
made as provided in Section 11 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with
Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, following the
Stock Acquisition Date or a determination by the Board
that a Person has become an Adverse Person, directly or
indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be
the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other Person or cash
or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or
a series of related transactions, assets, cash flow or
earning power aggregating more than 50% of the assets,
cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company
in one or more transactions each of which complies with
Section 11(o) hereof), then, and in each such case
(except as may be contemplated by Section 13(d) hereof),
proper provision shall be made so that: (i) each holder
of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number
of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common
Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights
of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one two-
hundredths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number
of such one two-hundredths of a share for which a Right
was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and
dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes
of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per
share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation
to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any
transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person
that is the issuer of any securities into which
shares of Common Stock of the Company are
converted in such merger or consolidation, and
if no securities are so issued, the Person that
is the other party to such merger or
consolidation; and
(ii) in the case of any
transaction described in clause (z) of the
first sentence of Section 13(a), the Person
that is the party receiving the greatest
portion of the assets or earning power
transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the
Common Stock of such Person is not at such time and has
not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such
other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and
have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any
such consolidation, merger, sale or transfer unless the
Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party
will
(i) prepare and file a
registration statement under the Act, with
respect to the Rights and the securities
purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts
to cause such registration statement to (A)
become effective as soon as practicable after
such filing and (B) remain effective (with a
prospectus at all times meeting the
requirements of the Act) until the Expiration
Date; and
(ii) will deliver to holders of
the Rights historical financial statements for
the Principal Party and each of its Affiliates
which comply in all respects with the
requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares
of Common Stock pursuant to a tender offer or exchange
offer for all outstanding shares of Common Stock which
complies with the provisions of Section 11(a)(ii)(A)
hereof (or a wholly owned subsidiary of any such Person
or Persons), (ii) the price per share of Common Stock
offered in such transaction is not less than the price
per share of Common Stock paid to all holders of shares
of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is
the same as the form of consideration paid pursuant to
such tender offer or exchange offer. Upon consummation
of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional
Shares.
(a) The Company shall not be required to
issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or
to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the
Rights 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 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 of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported
by the Nasdaq Stock Market or such other system then in
use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board. 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 shall be used.
(b) The Company shall not be required to
issue fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one
two-hundredth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates
which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one
two-hundredth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not
integral multiples of one two-hundredth of a share of
Preferred Stock, the Company may pay to the registered
holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one
two-hundredth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value
of one two-hundredth of a share of Preferred Stock shall
be one two-hundredth of the closing price of a share of
Preferred Stock (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of a
Triggering Event, the Company shall not be required to
issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market
value of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share
of Common Stock shall be the closing price of one share
of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the
acceptance of the Rights expressly waives his or her
right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder
of any Rights 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 Rights
Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in his or her own behalf and for his
or her 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
or her right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations
of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents
and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the
Rights will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the
Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem
and treat the person in whose name a Rights 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 Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this
Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts
to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not
Deemed a Stockholder. No holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of
one two-hundredths of a share of Preferred 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
Rights Certificate be construed to confer upon the holder
of any Rights 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 24 hereof),
or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such
Rights 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 disbursements and other disbursements
incurred in the administration and execution of this
Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of
this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected
and shall incur no liability for or in respect of any
action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for 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.
Section 19. Merger or Consolidation or Change
of Name of Rights Agent.
(a) Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate
trust, stock transfer or shareholder services business of
the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any
further act on the part of any of the parties hereto;
provided, however, 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 Rights
Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor
Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the
Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The
Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel 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
(including, without limitation, the identity of any
Acquiring Person or Adverse Person and the determination
of Current Market Price) be proved or established by the
Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable
hereunder 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 Rights
Certificates or be required to verify the same (except as
to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under
any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights
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 Rights Certificate; nor shall it be responsible
for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Common Stock or Preferred
Stock will, when so 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 the Chairman of
the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with
its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(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 lend money to the Company
or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection
and continued employment thereof.
(j) 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.
(k) If, with respect to any Right
Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with
respect to such requested exercise of transfer without
first consulting with the Company.
(l) The Rights Agent shall not be liable
for failure to perform any duties except as specifically
set forth herein and no implied covenants or obligations
shall be read into this Agreement against the Rights
Agent whose duties and obligations are ministerial and
shall be determined solely by the express provisions
hereof.
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
thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (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 and Preferred Stock, by registered or
certified mail, and to the holders of the Rights
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 thirty (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 Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection
by the Company), then any registered holder of any Rights
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 the State of New York (or of any other state
of the United States so long as such corporation is
authorized to do business as a banking institution in the
State of New York), in good standing, which is authorized
under such laws to exercise stock transfer or corporate
trust powers and is subject to supervision or examination
by federal or state authority and which, at the time of
its appointment as Rights Agent, has, or is an affiliate
of a corporation which has, a combined capital and
surplus of at least $100,000,000. 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 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 the Preferred
Stock, and mail a notice thereof in writing to the
registered holders of the Rights 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 Rights
Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the
Board 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 Rights
Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise, conversion
or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of the Company,
issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such
issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no
such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of the Company may, at its
option, at any time prior to the earlier of (i) the close
of business on the tenth day following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of
business on the tenth day following the Record Date), or
(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, as such amount may be
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"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Market
Price, as defined in Section 11(d)(i) hereof, of the
Common Stock at the time of redemption) or any other form
of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the
Board ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent 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 for each Right so held.
Promptly after the action of the Board ordering the
redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
(c) (i) The Board may, at its option, at
any time after any Person becomes an Acquiring Person or
the Board determines that any Person has become an
Adverse 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 7(e) hereof) for 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 shall not be empowered to effect such exchange
at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding
Common Stock for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more
of the Common Stock then outstanding.
(ii) Immediately upon the action of the
Board ordering the exchange of any Rights pursuant to
paragraph (c)(i) of this Section 23 and without any
further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the
method by which the exchange of the Common 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 7(e) hereof)
held by each holder of Rights.
(iii) In any exchange pursuant to this
Section 23(c), the Company, at its option, may substitute
Preferred Stock (or equivalent preferred stock, as such
term is defined in paragraph (b) of Section 11 hereof)
for Common Stock exchangeable for rights, at the initial
rate of one two-hundredths of a share of Preferred Stock
(or equivalent preferred stock) for each share of Common
Stock, as appropriately adjusted to reflect adjustments
in the voting rights of the Preferred Stock pursuant to
the Company's Restated Certificate of Incorporation, so
that the fraction of a share of Preferred Stock delivered
in lieu of each share of Common Stock shall have the same
voting rights as one share of Common Stock.
(iv) In the event that there shall not be
sufficient Common Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 23(c),
the Company shall take all such action as may be
necessary to authorize additional Common Stock for
issuance upon exchange of the Rights.
(v) 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. In lieu of such fractional shares of
Common Stock, there shall be paid 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. For the purposes of this paragraph (v) of Section
23(c), 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 23(c).
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities,
rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect
any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), 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 transaction or a series of related transactions,
of more than 50% of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants,
or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of
Preferred 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 twenty (20)
days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) In case any of the events set forth
in Section 11(a)(ii) hereof shall occur, then, in any
such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof, and
(ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made
if sent by telecopier (with receipt confirmed) or by
first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights
Agent) as follows:
The Williams Companies, Inc.
One Williams Center
Tulsa, Oklahoma 74172
Attention: Corporate Secretary
Telecopier: (918) 588-4503
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made
by the Company or by the holder of any Rights Certificate
to or on the Rights Agent shall be sufficiently given or
made if sent by telecopier (with receipt confirmed) or by
first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as
follows:
First Chicago Trust Company of New York
525 Washington Boulevard
Mail Suite 4660
Jersey City, New Jersey 07310
Attention: Tenders & Exchanges Administration
Telecopier: (201) 222-4291
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates
representing shares of Common Stock) 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 26. Supplements and Amendments. Prior
to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the
approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution
Date, the Company 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 (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein
which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time
period hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an
Adverse Person or an Affiliate or Associate of an
Acquiring Person or an Adverse Person); provided, this
Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B)
any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common
Stock.
Section 27. 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 28. Determinations and Actions by the
Board, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock
outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is
the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board
shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the
administration of this Agreement, including, without
limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a
determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights
and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
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 Rights Certificates (and,
prior to the Distribution Date, registered holders of 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 Rights
Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 30. Severability. If any term,
provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable
and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close
of business on the tenth day following the date of such
determination by the Board. Without limiting the
foregoing, if any provision requiring the approval of a
majority of a group of directors, which group constitutes
less than the entire Board, is held by any court of
competent jurisdiction or other authority to be invalid,
void or unenforceable, such determination shall then be
made by the Board in accordance with applicable law and
the Company's Certificate of Incorporation and By-Laws.
Section 31. Governing Law. This Agreement,
each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of
such State applicable to contracts made and to be
performed entirely within such State.
Section 32. Counterparts. This Agreement may
be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or
affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: The Williams Companies, Inc.
By By
Name: Name:
Title: Title:
Attest: First Chicago Trust Company
of New York
By By
Name: Name:
Title: Title:
- ---------------------------------------------------------------------------
Exhibit A
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER February 6, 2006 OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.](1)
Rights Certificate
The Williams Companies, 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
6, 1996 (the "Rights Agreement"), between The Williams
Companies, Inc., a Delaware corporation (the "Company"),
and First Chicago Trust Company of New York (the "Rights
Agent"), to purchase from the Company at any time prior
to 5:00 P.M. (Tulsa, Oklahoma time) on February 6, 2006
at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one
two-hundredth of a fully paid, non-assessable share of
Series A Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of
$140.00 per one two-hundredth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set
1 The portion of the legend in brackets shall be
inserted only if applicable and shall replace the
preceding sentence.
forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of February
6, 1996 based on the Preferred Stock as constituted at
such date. The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such
term is defined in the Rights Agreement) that a number of
Rights be exercised so that only whole shares of
Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights Agreement),
if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an
Adverse Person or an Affiliate or Associate of any such
Acquiring Person or Adverse Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of
any such Acquiring Person, Adverse Person, Associate or
Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of an
Acquiring Person or an Adverse Person, such Rights shall
become null and void and no holder hereof shall have any
right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the
Purchase Price and the number and kind of shares of
Preferred Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and
adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of
the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include
the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on
file at the above-mentioned office of the Rights Agent
and are also available upon written request to the
Company.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the principal
office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate
number of one two-hundredths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may
be redeemed by the Company at its option at a redemption
price of $0.01 per Right at any time prior to the earlier
of the close of business on (i) the tenth day following
the Stock Acquisition Date (as such time period may be
extended pursuant to the Rights Agreement), and (ii) the
Final Expiration Date. In addition, the Rights may be
exchanged, in whole or in part, for shares of the Common
Stock, or shares of preferred stock of the Company having
essentially the same value or economic rights as such
shares. Immediately upon the action of the Board of
Directors of the Company authorizing any such exchange,
and without any further action or any notice, the Rights
(other than Rights which are not subject to such
exchange) will terminate and the Rights will only enable
holders to receive the shares issuable upon such
exchange.
No fractional shares of Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples
of one two-hundredth of a share of Preferred 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 Rights Certificate shall be
entitled to vote or receive dividends or be deemed for
any purpose the holder of shares of Preferred 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 Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of ,
ATTEST: The Williams Companies, Inc.
____________________ By_______________________
Secretary Title:
Countersigned:
First Chicago Trust Company
of New York
By______________________
Authorized Signature
- ---------------------------------------------------------------------------
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfer unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably
constitute and appoint _________________ Attorney, to
transfer the within Rights Certificate on the books of
the within-named Company, with full power of
substitution.
Dated: __________________, ____ ______________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) this Rights Certificate is [ ] is not [ ]
being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person, an Adverse
Person or an Affiliate or Associate of an Acquiring Person
or an Adverse Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, the undersigned did [ ]
did not [ ] acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently
became an Acquiring Person, an Adverse Person or an
Affiliate or Associate of an Acquiring Person or an
Adverse Person.
Dated: __________________, ____ ______________________
Signature
Signature Guaranteed:
- ---------------------------------------------------------------------------
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon
the face of this Rights Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
- ---------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: The Williams Companies, Inc.:
The undersigned hereby irrevocably elects to
exercise __________ Rights represented by this Rights
Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in
the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the
Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ___________, ____ ___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) the Rights evidenced by this Rights
Certificate are [ ] are not [ ] being exercised by or on
behalf of a Person who is or was an Acquiring Person, an
Adverse Person or an Affiliate or Associate of an
Acquiring Person or an Adverse Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge
of the undersigned, the undersigned did [ ] did not [ ]
acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of an Acquiring
Person or an Adverse Person.
Dated: ___________, ____ ___________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to
Purchase and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any
change whatsoever.
- ---------------------------------------------------------------------------
EXHIBIT 99
Jan. 22, 1995
Jim Gipson (918) 588-2111 (Media)
Linda Lawson (918) 588-2067 (Investors)
Richard George (918) 588-3679
WILLIAMS COMPANIES, INC. REPLACES EXPIRING SHAREHOLDER RIGHTS PLAN
TULSA--The Williams Companies, Inc. board of directors
has approved a shareholders rights plan covering the next 10
years to change and replace an existing plan that expires on Feb.
6.
Such plans are designed to deter coercive takeover
tactics and to prevent an acquiring entity from gaining control
of the company without offering a fair price to all of the
company's shareholders. Publicly traded companies routinely
adopt these kinds of plans.
The shareholder rights plan is included with a Form 8-K
that will be filed at the Securities and Exchange Commission. A
copy of the plan can be obtained from the commission or by
calling Williams' investor relations data request service at
(918) 588-4084.
Williams' companies consist of the nation's largest-
volume system of interstate natural gas pipelines; one of the
nation's largest natural gas gatherers and processors; a full-
service energy marketing and trading company; a Midwest petroleum
products pipeline; a national business-telecommunications
equipment sales and services company; and a nationwide fiber-
optic video services provider. (NYSE: WMB). Company
Information is available on the Internet World Wide Web at:
htpp://www.twc.com.
