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FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
BELLWETHER EXPLORATION COMPANY
(Exact name of registrant as
specified in its charter)
DELAWARE
(State of incorporation or organization)
76-0437769
(I.R.S. Employer Identification No.)
1331 LAMAR, SUITE 1455
HOUSTON, TEXAS 77010
(Address of principal executive
offices, including zip code)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
N/A N/A
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. [ ]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
SERIES A PREFERRED STOCK PURCHASE RIGHTS
(Title of class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On September 12, 1997, the Board of Directors of Bellwether
Exploration Company (the "Company") authorized and declared a dividend of one
preferred stock purchase right (a "Right") for each share of common stock, par
value $.01 per share, of the Company (the "Common Shares"). The dividend is
payable on September 26, 1997 (the "Record Date") to the holders of record of
Common Shares as of the close of business on such date.
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement") dated as of September
12, 1997 by and between the Company and American Stock Transfer & Trust Company,
as Rights Agent (the "Rights Agent").
1. COMMON SHARE CERTIFICATES REPRESENTING RIGHTS
Until the Distribution Date (as defined in Section 2 below), (a) the
Rights shall not be exercisable, (b) the Rights shall be attached to and trade
only together with the Common Shares and (c) the stock certificates representing
Common Shares shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior to the
Distribution Date shall contain a notation incorporating the Rights Agreement by
reference.
2. DISTRIBUTION DATE
The "Distribution Date" is the earliest of (a) the tenth day following
the date of the first public announcement that any person (other than the
Company or certain related entities, and with certain additional exceptions) has
become the beneficial owner of 15% or more of the then outstanding Common Shares
(such person is an "Acquiring Person" and the date of such public announcement
is the "Stock Acquisition Date") or (b) the close of business on the tenth
business day (or such later day as shall be designated by the Board of
Directors) following the date of the commencement of, or the announcement of an
intention to make, a tender offer or exchange offer, the consummation of which
would cause any person (other than the Company and certain related entities and
with certain additional exceptions) to become an Acquiring Person. In
calculating the percentage of outstanding Common Shares that are beneficially
owned by any person, such person shall be deemed to beneficially own any Common
Shares issuable upon the exercise, exchange or conversion of any options,
warrants or other securities beneficially owned by such person and any Common
Shares beneficially owned by certain affiliates and associates of such person.
Notwithstanding the foregoing, if any person shall become the beneficial owner
of at least 15% of the outstanding Common Shares by reason of purchases of
Common Shares by the Company, then such person shall not be deemed an "Acquiring
Person" until such person thereafter acquires beneficial ownership of, in the
aggregate, a number of additional Common Shares equal to 1% or more of the then
outstanding Common Shares.
After the Distribution Date, the Rights shall separate from the
Common Shares, Rights certificates shall be issued, and the Rights shall become
exercisable to purchase Preferred Shares as described in Section 5 below.
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3. ISSUANCE OF RIGHTS CERTIFICATES
As soon as practicable following the Distribution Date, separate
certificates representing only Rights shall be mailed to the holders of record
of Common Shares as of the close of business on the Distribution Date, and such
separate Rights certificates alone shall represent such Rights from and after
the Distribution Date.
4. EXPIRATION OF RIGHTS
The Rights shall expire on September 26, 2007, unless earlier redeemed
or exchanged.
5. EXERCISE OF RIGHTS
Unless the Rights have expired or been redeemed or exchanged, they may
be exercised, at the option of the holders, pursuant to paragraphs (a), (b) or
(c) below. No Right may be exercised more than once or pursuant to more than
one of such paragraphs. From and after the first event of the type described in
paragraphs (b) or (c) below, each Right that is beneficially owned by an
Acquiring Person or an affiliate or associate thereof shall be void.
(a) RIGHT TO PURCHASE PREFERRED SHARES. From and after the close of
business on the Distribution Date, each Right (other than a Right that has
become void) shall be exercisable to purchase one one-hundredth of a share of
Series A Preferred Stock, par value $1.00 per share, of the Company (the
"Preferred Shares"), at an exercise price of $50.00) (the "Purchase Price").
The Preferred Shares are nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock, are
subordinate to any other series of the company's preferred stock whether issued
before or after the issuance of the Preferred Shares. The Preferred Shares may
not be issued except upon exercise of Rights. The holder of a Preferred Share
is entitled to receive when, as and if declared, the greater of (i) cash and
non-cash dividends in an amount equal to 100 times the dividends declared on
each Common Share or (ii) a preferential annual dividend of $1.00 per Preferred
Share. In the event of liquidation, the holders of Preferred Shares shall be
entitled to receive a liquidation payment in an amount equal to the greater of
(1) $.25 (twenty-five cents) per Preferred Share, plus all accrued and unpaid
dividends and distributions on the Preferred Shares, or (2) an amount equal to
100 times the aggregate amount to be distributed per Common Share. Each
Preferred Share has 100 votes, voting together with the Common Shares. In the
event of any merger, consolidation or other transaction in which Common Shares
are exchanged, the holder of a Preferred Share shall be entitled to receive 100
times the amount received per Common Share. The rights of the Preferred Shares
as to dividends, voting and liquidation preferences are protected by
antidilution provisions. It is anticipated that the value of one one-hundredth
of a Preferred Share should approximate the value of one Common Share.
(b) RIGHT TO PURCHASE COMMON SHARES OF THE COMPANY. In the event
that any person, alone or together with its affiliates or associates, shall
become an Acquiring Person (subject to certain exceptions), each Right (other
than a Right that has become void) shall be exercisable to purchase, at the
Purchase Price (initially $50.00), Common
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Shares with a market value equal to two times the Purchase Price. If the Company
does not have sufficient Common Shares available for all Rights to be exercised
the Company shall, or otherwise if the Company so elects the Company may,
substitute for all or any portion of the Common Shares that would otherwise be
issuable upon the exercise of the Rights, cash, assets or other securities
having the same aggregate value as such Common Shares.
(c) RIGHT TO PURCHASE COMMON STOCK OF A SUCCESSOR CORPORATION. If,
after a person has become an Acquiring Person, (i) the Company is acquired in a
merger or other business combination in which the Company is not the surviving
corporation, (ii) the Company is the surviving corporation in a merger or other
business combination in which all or part of the outstanding Common Shares are
changed into or exchanged for stock or assets of another person or (iii) 50% or
more of the company's consolidated assets or earning power are sold, then each
Right (other than a Right that has become void) shall thereafter be exercisable
to purchase, at the Purchase Price (initially $50.00), shares of common stock or
cash of the surviving corporation or purchaser, respectively, with an aggregate
market value equal to two times the Purchase Price.
6. ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price, the number of outstanding Rights and the number of
Preferred Shares or Common Shares issuable upon exercise of the Rights are
subject to adjustment from time to time as set forth in the Rights Agreement in
order to prevent dilution. With certain exceptions, no adjustment in the
Purchase Price shall be required until cumulative adjustments require an
adjustment of at least 1%.
7. CASH PAID INSTEAD OF ISSUING FRACTIONAL SECURITIES
No fractional securities shall be issued upon exercise of a Right
(other than fractions of Preferred Shares that are integral multiples of one
one-hundredth of a Preferred Share, which fractions may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment
in cash shall be made based on the market price of such securities on the last
trading date prior to the date of exercise.
8. REDEMPTION
Prior to the earlier of the close of business on the tenth business
day following a Stock Acquisition Date or the close of business on the earlier
of expiration, redemption or exchange of the Rights, the Company may, by
resolution of its Board of Directors (or of certain "Continuing Directors", as
hereinafter defined, if such resolution is adopted after a Stock Acquisition
Date), redeem all of the then outstanding Rights at a redemption price of $.01
per Right, subject to adjustment, payable in cash, Common Shares or other
appropriate consideration.
9. EXCHANGE
At any time after any Person becomes an Acquiring Person and prior to
the first date thereafter upon which an Acquiring Person (with certain
exceptions) shall be the beneficial owner of 50% or more of the outstanding
Common Shares, the Board of Directors may, at its option, direct the Company to
exchange all, but not less than all, of
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the then outstanding Rights for Common Shares at an exchange ratio of one Common
Share per Right, subject to adjustment. Immediately upon such action by the
Board of Directors, the right to exercise Rights shall terminate and the only
right of the holders of Rights thereafter shall be to receive a number of Common
Shares to which such holder is entitled pursuant to such exchange ratio.
10. NO STOCKHOLDER RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, shall have no
rights as a stockholder of the Company (other than rights resulting from such
holder's ownership of Common Shares), including, without limitation, the right
to vote or to receive dividends.
11. AMENDMENT OF RIGHTS AGREEMENT
The Board of Directors may, from time to time, without the approval of
any holder of Rights, direct the Company and the Rights Agent to supplement or
amend any provision of the rights Agreement in any manner, whether or not such
supplement or amendment is adverse to any holder of Rights, and the Company and
Rights Agent shall so supplement or amend such provision; provided, however,
that from and after the time that any person becomes an Acquiring Person, the
Rights Agreement shall not be supplemented or amended in any manner that would
adversely affect any holder of outstanding Rights other than an Acquiring
Person; provided, further that from and after the time that any person becomes
an Acquiring Person, the Rights Agreement shall not be supplemented or amended
in any manner without the approval of certain Directors who were elected at a
regularly scheduled, annual meeting of the Company or Directors appointed by
such Directors so elected ("Continuing Directors").
ITEM 2. EXHIBITS
Attached hereto as an exhibit and incorporated herein by reference is
the Rights Agreement dated as of September 12, 1997 by and between the Company
and American Stock Transfer & Trust Company, as Rights Agent, and which includes
as Exhibit A thereto, the form of Certificate of Designations, Preferences and
Rights of Series A Preferred Stock, as Exhibit B thereto the form of Rights
Certificate and as Exhibit C thereto the Summary of Rights.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Date: September 17, 1997 BELLWETHER EXPLORATION COMPANY,
a Delaware corporation
By: /s/ J. Darby Sere
-----------------------------------------
Name: J. Darby Sere
Title: Chairman and Chief Executive Officer
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EXHIBIT INDEX
Exhibit
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1. Rights Agreement by and between Bellwether Exploration Company and American
Stock Transfer & Trust Company, as Rights Agent, dated as of September 12,
1997, and which includes as Exhibit A thereto the form of Certificate of
Designation, Preferences and Rights of Series A Preferred Stock, as Exhibit
B thereto the form of Rights Certificate and as Exhibit C thereto the
Summary of Rights.
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================================================================================
RIGHTS AGREEMENT
by and between
BELLWETHER EXPLORATION COMPANY
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
Dated as of September 12, 1997
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions............................................. 1
Section 2. Appointment of Rights Agent..................................... 4
Section 3. Issue of Rights Certificates.................................... 4
Section 4. Form of Rights Certificates..................................... 6
Section 5. Countersignature and Registration............................... 7
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Certificates................................... 7
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights................................................ 8
Section 8. Cancellation and Destruction of Rights Certificates............. 10
Section 9. Reservation and Availability of Preferred Stock................. 10
Section 10. Preferred Stock Record Date..................................... 11
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.................................... 12
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares.............................................. 20
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power....................................... 20
Section 14. Fractional Rights and Fractional Shares......................... 23
Section 15. Rights of Action................................................ 24
Section 16. Agreement of Rights Holders..................................... 25
Section 17. Rights Certificate Holder Not Deemed a Stockholder.............. 25
Section 18. Concerning the Rights Agent..................................... 25
Section 19. Merger or Consolidation or Change of Name of Rights Agent....... 26
Section 20. Duties of Rights Agent.......................................... 26
Section 21. Change of Rights Agent.......................................... 29
Section 22. Issuance of New Rights Certificates............................. 29
Section 23. Exchange........................................................ 30
Section 24. Redemption...................................................... 31
Section 25. Notice of Certain Events........................................ 32
Section 26. Notices......................................................... 33
Section 27. Supplements and Amendments...................................... 34
Section 28. Determination and Actions by the Board of Directors, etc........ 34
Section 29. Successors...................................................... 34
Section 30. Benefits of this Agreement...................................... 35
Section 31. Severability.................................................... 35
Section 32. Governing Law................................................... 35
Section 33. Counterparts.................................................... 35
Section 34. Descriptive Headings............................................ 35
Exhibit A Form of Certificate of Designation, Preferences
and Rights of Series A Preferred Stock...................... A-1
Exhibit B Form of Rights Certificate.................................... B-1
Exhibit C Summary of Rights............................................. C-1
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RIGHTS AGREEMENT
This Agreement, dated as of September 12, 1997, between Bellwether
Exploration Company, a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company, a New York corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on September 12, 1997, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each share of common stock, $0.01 par value, of the Company (the
"Common Stock") outstanding as of the close of business on September 26, 1997
(the "Record Date"), and contemplates the issuance of one Right (subject to
adjustment as provided herein) for each share of Common Stock of the Company
issued between the Record Date and the earliest of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined), each Right representing
the right to purchase, initially, one one-hundredth of one share of Preferred
Stock of the Company (as defined in Section 1 hereof), 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 hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates (as hereinafter defined)
and Associates (as hereinafter defined) of such Person, shall be the
Beneficial Owner (as hereinafter defined) of securities representing 15% or
more of the shares of Common Stock then outstanding, but shall not include
the Company, any Subsidiary (as hereinafter defined) of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or
any entity organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, (i) no Person shall become an "Acquiring
Person" as a result of an acquisition of Common Stock by the Company which,
by reducing the aggregate number of shares of Common Stock outstanding,
increases the percentage of the total number of shares of Common Stock
outstanding which are beneficially owned by such Person to 15% or more;
provided however, that if a Person shall become the Beneficial Owner of 15%
or more of the Common Stock then outstanding by reason of purchases of
Common Stock by the Company and such Person shall, after such share
purchases by the Company, become the Beneficial Owner of additional shares
of Common Stock totaling 1% or more of the shares of Common Stock then
outstanding, then such Person shall constitute an "Acquiring Person" and
(ii) if the Board of Directors of the Company determines in good faith that
a Person who would otherwise be an Acquiring Person, as defined pursuant to
the foregoing provisions of this paragraph (a), has become such
inadvertently and in good faith, and, if requested by the Board of
Directors, such Person agrees to divest himself of a sufficient number of
shares
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of Common Stock so that such Person would no longer be an Acquiring Person,
as defined pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be an "Acquiring Person" for any purposes
of this Agreement.
(b) "Affiliate" and "Associate" 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 as in
effect on the date of this Agreement (the "Exchange Act").
(c) 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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right
is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the
right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section l(c)(ii)(B)) or
disposing of any securities of the Company.
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Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company,
shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of Texas are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
P.M., Houston, Texas time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Houston, Texas time, on
the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share, of the
Company. "Common Stock" when used with reference to any Person other than
the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(g) "Company" shall mean Bellwether Exploration Company, a
Delaware corporation.
(h) "Continuing Director" shall mean, as of the time a
determination is made, a member of the Board of Directors of the Company
who was elected by the stockholders of the Company at a regularly scheduled
annual meeting of stockholders or who was appointed by the Board of
Directors of the Company at a time when at least a majority of the members
of the Board of Directors of the Company were elected by the stockholders
of the Company at a regularly scheduled annual meeting of stockholders.
(i) "Distribution Date" shall have the meaning assigned to
such term in Section 3 hereof.
(j) "Expiration Date" shall have the meaning assigned to such
term in Section 7 hereof.
(k) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity and shall
include any successor (by merger or otherwise) of such entity.
(l) "Preferred Stock" shall mean the Series A Preferred Stock,
$1.00 par value, of the Company having the rights and preferences set forth
in the Form of Certificate of Designation, Preferences and Rights attached
to this Agreement as Exhibit A.
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(m) "Purchase Price" shall mean the price per share of Common
Stock described in Section 7 hereof.
(n) "Record Date" shall have the meaning as set forth in the
Preamble of this Agreement.
(o) "Rights" shall have the meaning as set forth in the
Preamble of this Agreement.
(p) "Rights Agent" shall have the meaning as set forth in the
Preamble of this Agreement.
(q) "Rights Certificate" shall have the meaning assigned to
such term in Section 3 hereof.
(r) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
(s) A "Section 13 Event" shall mean any event described in
Section 13(a)(x), (y) or (z) hereof.
(t) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(u) A "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or interest is owned, directly, or indirectly, by such Person.
(v) A "Triggering Event" shall mean a Section 11(a)(ii) Event
or any Section 13 Event.
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. In the event the Company appoints one or more co-Rights Agents, the
respective duties of the Rights Agent and any co-Rights Agent shall be as the
Company shall determine.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier of
(i) the tenth day after the Stock Acquisition Date or (ii) the Close of Business
on the tenth Business Day (or such later date as may be determined by action of
the Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement 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 entity holding
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Common Stock for or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of 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 entity holding Common Stock for or pursuant to
the terms of any such plan) to commence, a tender or exchange offer that, if
consummated, would result in such Person, alone or together with its Affiliates
and Associates, becoming an Acquiring Person (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock shall be deemed also to be
Rights Certificates) and not by separate Rights Certificates, and (y) the right
to receive Rights Certificates will be transferable only in connection with the
transfer of the underlying shares of Common Stock. As soon as practicable after
the Company has notified the Rights Agent of the occurrence of the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage prepaid mail, to each record
holder of 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
rights certificates in substantially the form of Exhibit B 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) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights, in substantially the form
of Exhibit C hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records of the Company.
With respect to certificates for the Common Stock outstanding as of the Record
Date, until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the Rights will be evidenced by such certificates
for the Common Stock registered in the name of the holders thereof together with
a copy of the Summary of Rights attached thereto. Until the Distribution Date
(or earlier redemption, expiration or termination of the Rights), the surrender
for transfer of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
(c) Certificates for Common Stock which become outstanding
(including, without limitation, shares issued out of treasury and certificates
issued upon transfer or exchange of Common Stock) after the Record Date, but
prior to the earliest of the Distribution Date or the redemption, expiration or
termination of the Rights shall be deemed also to be certificates for Rights,
and shall have impressed, printed, stamped, written or otherwise affixed onto
them the following legend:
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This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Bellwether Exploration
Company (the "Company") and American Stock Transfer & Trust Company (the
"Rights Agent"), dated as of September 12, 1997 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the Company and the
Rights Agent. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may expire, or may be evidenced by
separate certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a written request
therefor. Under certain circumstances, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring 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 be null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, 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. If the
Company purchases or acquires any Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any rights associated with the shares of Common Stock that are no
longer outstanding.
SECTION 4. FORM OF RIGHTS CERTIFICATES. 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 B hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of authentication thereof, and on their face
shall entitle the holders thereof to purchase such number of one-hundredths of a
share of Preferred Stock at the exercise price as shall be set forth therein,
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.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, a Vice Chairman, 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
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signature. The Rights Certificates shall be manually countersigned 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 Certificate
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. Any
Rights Certificate 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 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 CERTIFICATES. (a) Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
Expiration Date (as such term is defined in Section 7(a) hereof), any Rights
Certificate or Rights Certificates (other than Rights Certificates representing
Rights that have become void pursuant to Section 7(e) hereof or that may have
been exchanged pursuant to Section 23 hereof) may be transferred, split up,
combined or exchanged for another Rights Certificate or other Rights
Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock (or Common Stock, other securities or other property,
as the case may be) as the Rights Certificate or Rights 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 shall make such request in writing delivered to
the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged, with the form
of assignment duly executed, at the principal office or offices of the Rights
Agent designated for such purpose. Thereupon the Rights Agent shall 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 at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature
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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) The registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the 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 the aggregate
Purchase Price with respect to the total number of one-hundredths of a share of
Preferred Stock (or other securities or property, as the case may be) as to
which the Rights are exercised, at or prior to the earlier of (i) the Close of
Business on the tenth anniversary of the Record Date, (ii) the time at which the
Rights are redeemed as provided in Section 24 hereof or (iii) the time at which
the Board of Directors of the Company orders the exchange of Rights pursuant to
paragraph (a) of Section 23 (the earlier of (i), (ii) and (iii) is herein
referred to as the "Expiration Date"). Subject to adjustment as provided herein,
each Right shall initially be exercisable for one one-hundredth of a share of
Preferred Stock.
(b) The Purchase Price for each one one-hundredth share of
Preferred Stock pursuant to the exercise of a Right shall initially be $50.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof (the "Purchase Price") and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a share of Preferred Stock (or for such Common
Stock, other securities or other property, as the case may be) to be purchased,
and an amount equal to any applicable transfer tax payable in accordance with
Section 9(e) (as determined by the Rights Agent), in cash, or by certified
check, cashier's check or money order payable to the order of the Company (or
other proper party in the case of payments to be made in accordance with Section
9(e)), the Rights Agent shall, subject to Section 20(k), 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 therefor) certificates
for the total number of shares 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, in its sole discretion, 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-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 issuance of fractional shares
in accordance with Section 14, (iii) promptly after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in such name or
names as may
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be designated by such holder, and (iv) after receipt promptly deliver such cash,
if any, to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue other
securities 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 are available for distribution by the Rights Agent, if and
when appropriate.
(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) From and after the occurrence of a Section 11(a)(ii)
Event, any Rights that are or were acquired or Beneficially Owned by any
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall
be void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Rights Certificate shall
be issued pursuant to Section 3 that represents Rights Beneficially Owned by an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof; no Rights Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Rights Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
shall be canceled.
(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) been provided with 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights 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 canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
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SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK. (a) Subject to
the terms of its certificate of incorporation, the Company covenants and agrees
that it shall use its best efforts to cause to be reserved and kept available
out of its authorized and unissued shares of Preferred Stock, or any authorized
and issued shares of Preferred Stock held in its treasury, the number of shares
of Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights and, after the occurrence of a Triggering Event, shall so
reserve and keep available a sufficient number of shares of Preferred Stock
(and/or other securities) which may be required to permit the exercise in full
of all outstanding Rights in accordance with Section 7.
(b) So long as the shares of Preferred Stock (and, after the
occurrence of a Triggering Event, any other securities) issuable 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 or units of such other securities 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 occurrence of a
Section 11(a)(ii) Event as of 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, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (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 Expiration Date 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 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. Notwithstanding any such 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 shares of Preferred Stock
and/or other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares or other securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares or securities.
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(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 or of any certificates for shares of Preferred Stock and/or Common
Stock upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a person other than, or in respect of the
issuance or delivery of the shares of Preferred Stock and/or Common Stock in 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 shares of Preferred Stock, and/or Common Stock 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 shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Rights Certificate evidencing such Rights was
duly presented and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such presentation and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, 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 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 the Company shall at any time after the
Record Date (A) declare a dividend on its then outstanding Preferred Stock
that is payable in shares of Preferred Stock, (B) subdivide the outstanding
shares of Preferred Stock, (C) combine the outstanding shares of Preferred
Stock into a smaller number of shares of Preferred Stock 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), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive
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the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when
the Preferred Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), 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).
(ii) Subject to Section 23 of this Agreement, in the event (a
"Section 11(a)(ii) Event") that any Person (other than any employee benefit
plan of the Company or any Subsidiary of the Company or any Person
organized, appointed or established by the Company or such Subsidiary for
or pursuant to the terms of any such employee benefit plan), alone or
together with its Affiliates and Associates (other than the Company, any
Subsidiary of or other Person controlled by the Company, any employee
benefit plan of the Company or any Subsidiary of the Company or any Person
organized, appointed or established by the Company or such Subsidiary for
or pursuant to the terms of any such employee benefit plan), shall become
an Acquiring Person, then proper provision shall be made so that each
holder of a Right, except as provided in Sections 7(e) and 11(a)(iii)
hereof, shall have a right to receive upon exercise of each Right at a
price equal to the then current Purchase Price multiplied by the number of
one-hundredths of a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of shares 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-hundredths of a share of Preferred
Stock for which a Right was exercisable (or, if the Distribution Date shall
not have occurred prior to the date of such Section 11(a)(ii) Event, the
number of one-hundredths of a Preferred Share for which a Right would have
been exercisable if the Distribution Date had occurred on the Business Day
immediately preceding the date of such Section 11(a)(ii) Event) immediately
prior to such Section 11(a)(ii) Event and (y) dividing that product by 50%
of the current market price per one share of Common Stock of the Company
(determined pursuant to Section 11(d)) on the date of the occurrence of the
event set forth in this subparagraph (ii) (such number of shares being
referred to as the number of "adjustment shares"). Successive adjustments
shall be made pursuant to this paragraph each time a Section 11(a)(ii)
Event occurs. In the event that any Person shall become an Acquiring Person
and the Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
(iii) In lieu of issuing shares of Common Stock of the Company
in accordance with Section 11(a)(ii) hereof, the Company, acting by
resolution of its Board of Directors (which resolution shall be effective
only with the concurrence of a majority of the Continuing Directors), may,
and, in the event that the number
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of shares of Common Stock which are authorized by the Company's Certificate
of Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights are not sufficient to permit exercise
in full of the Rights in accordance with Section 11(a)(ii) hereof, shall (A)
determine the excess of (1) the value of the adjustment shares issuable upon
the exercise of a Right (the "current value"), over (2) the Purchase Price
attributable to each Right (such excess, the "spread") and (B) with respect
to each Right (subject Section 7(e) hereof), make adequate provision to
substitute for the adjustment shares, upon 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 which the Board of
Directors of the Company (with the concurrence of a majority of the
Continuing Directors) has deemed to have the same value as shares of Common
Stock of the Company (such shares or units of preferred stock hereinafter
called "common stock equivalents")), (4) debt securities of the Company, (5)
other assets or (6) any combination of the foregoing an aggregate value
equal to the current value, where such aggregate value has been determined
by action of the Board of Directors of the Company (with the concurrence of
a majority of the Continuing Directors) based upon the advice of a
nationally recognized investment banking firm selected by the Board of
Directors of the Company which has theretofore performed no services for the
Company or any Subsidiary of the Company in the past five years; provided,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the
first date that the right to redeem the Rights pursuant to Section 24
hereof, as such date may be amended pursuant to Section 26 hereof, shall
expire (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 of the Company (to the extent
available) and then, if necessary, cash, which shares or cash have an
aggregate value equal to the spread. If, after the occurrence of a Section
11(a)(ii) Event, the number of shares of Common Stock that are authorized by
the Company's certificate of incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights are not
sufficient to permit exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof and the Company, acting by resolution of its Board
of Directors (which resolution shall be effective only with the concurrence
of a majority of the Continuing Directors), shall determine in good faith
that it is likely that sufficient additional shares of its Common Stock
could be authorized for issuance upon exercise in full of the Rights, then
the thirty-day period set forth above may be extended to the extent
necessary, but not more than ninety days after the Section 11(a)(ii) trigger
date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such period as it may be extended,
the "substitution period"). To the extent that the Company determines that
some action is to be taken pursuant to the terms of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the substitution
period in order to seek such stockholder approval for the authorization
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of additional shares or to decide the appropriate form of distribution to be
made pursuant to the first sentence of this Section 11(a)(iii) and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock of the Company shall be
the current market price per share (determined in accordance with Section
11(d) hereof) of the Common Stock of the Company on the date of the
occurrence of the Section 11(a)(ii) Event, and the per share or per unit
value of any Common Stock Equivalents shall be deemed to equal the current
market price (determined in accordance with Section 11(d) hereof) per share
of the Common Stock of the Company on such date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same or more
favorable rights, privileges and preferences as the 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 defined in Section
11(d)) 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 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); provided, however, that in no event
shall the consideration to be paid upon the exercise of a Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be determined reasonably and with good
faith to the holders of Rights by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent. 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.
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(c) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing 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 convertible securities, subscription rights or warrants
(excluding those referred to in Section 11(b)), 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
defined in Section 11(d)) per share of Preferred Stock on such record date,
less the fair market value (as determined reasonably and with good faith to
the holders of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
convertible securities, subscription rights or warrants distributable in
respect of one share of Preferred Stock and the denominator of which shall
be the current market price (determined pursuant to Section 11(d)) per
share of the Preferred Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than in Section 11(a) (iii), 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 30 consecutive "trading days"
(as such term is hereinafter defined) 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 the 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 10 consecutive trading days immediately following such
date; provided, however, that in the event that the current per share market
price of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in 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 prior to the expiration of 30 trading days after the ex-
dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case,
the "current 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
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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 National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") 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 of Directors
of the Company. 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
reasonably and with good faith by the Board of Directors of the Company
shall be used and shall be binding on the Rights Agent. 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
determined reasonably and with good faith to the holders of Rights by the
Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent.
(ii) For the purpose of any computation hereunder, the
"current market price" per share (or one one-hundredths of a 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 (or one one-
hundredth of a 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 100 (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 and the "current market price" per one one-hundredth of a share
of Preferred Stock shall be equal to the current market price per share of
the Common Stock (as 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). If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or traded, "current market
price" per share shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
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(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 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-thousandths 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 years from the date of this
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect
to the shares contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k), (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 shares 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 Section 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-hundredths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the number of
one-hundredths of a share of Preferred Stock 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
substitution for any adjustment in the number of shares 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-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 ten-thousandth) obtained by
dividing the
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Purchase Price in effect immediately prior to adjustment of the Purchase
Price by 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 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 shares 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 share and the number of
shares 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 par value, if any, of the shares
of Preferred Stock, Common Stock or other securities issuable upon exercise
of the rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred
Stock, Common Stock or other securities at such adjusted Purchase Price.
If upon any exercise of the Rights, a holder is to receive a combination of
Common stock and common stock equivalents, a portion of the consideration
paid upon such exercise, equal to at least the then par value of a share of
Common Stock of the Company, shall be allocated as the payment for each
share of Common Stock of the Company so received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the shares 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
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Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision of
the Preferred Stock, issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, 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, stock dividends or
issuance of rights, options or warrants referred to hereinabove 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, (ii) merge with or
into, or (iii) sell or transfer to, in one transaction or a series of
related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries taken as a
whole, any other Person or Persons if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights, warrants or
other instruments outstanding or agreements or arrangements 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 a
Person who constitutes, or would constitute, the "Principal Party" for the
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 24
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
substantially diminish 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
date of this Agreement and prior to the Distribution Date (i) declare or pay
any dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock in a reclassification of the outstanding Common
Stock, 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
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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.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 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 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 and shall not be deemed
to have knowledge of any such adjustment unless and until it shall have received
such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that, at any time after a Stock Acquisition Date,
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 that 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 shall consolidate with the Company or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the 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, mortgage or
otherwise transfer (or one or more of its Subsidiaries shall sell, mortgage or
otherwise transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly-owned Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof) (each, a "Section 13 Event"), then,
and in each such case, proper provision shall be made so that (i) each holder of
a Right, subject to Section 7(e) hereof, shall 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 shares of validly authorized and issued,
fully paid, non-assessable, and freely tradable shares of Common Stock of the
principal party (as hereinafter defined), free and clear of liens, rights of
call or first refusal, encumbrances 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-hundredths of a share of Preferred Stock for which a Right is then
exercisable (without taking into account any adjustment previously made pursuant
to Section 11(a)(ii) hereof) and (2) dividing that product by 50% of the current
market price per share of the Common Stock of such principal party (determined
pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (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 to such principal party; and (iv) such principal
party shall take such steps (including, but not limited to, the
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reservation of a sufficient number of shares of its Common Stock in accordance
with Section 9 hereof) in connection with such consummation 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.
(b) "Principal party" shall mean
(i) in the case of any transaction described in (x) or
(y) of the first sentence of this Section 13, 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 the merger or consolidation
(including, if applicable, the Company, if it is the surviving
corporation); and
(ii) in the case of any transaction described in (z) of
the first sentence in this Section 13, 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 12-month period registered
under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary or Affiliate of another Person,
"principal party" shall refer to such other Person; (2) in case
such Person is a Subsidiary, directly or indirectly, or
Affiliate 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;
and (3) in case such Person is owned, directly or indirectly,
by a joint venture formed by two or more Persons, the rules set
forth in (1) and (2) above shall apply to each of the Persons
having an interest in such joint venture as if such joint
venture were a "Subsidiary" of both or all of such Persons and,
in connection therewith, "principal party" shall refer to each
of such Persons and each such principal party shall bear the
obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such joint venture bear
to the total of such interests.
If, for any reason, the Rights cannot be exercised for Common Stock of the
Company or such principal party, then a holder of Rights will have the right to
exchange his Rights for cash from the Company or such principal party in an
amount equal to the number of shares of such Common Stock of the Company or of
such principal party he would otherwise be entitled to purchase times 50% of the
then current market price, as determined pursuant to Section 11(d)(i) hereof, of
the Common Stock of the Company or of such principal party, as the case may be.
If, for any reason, including, without limitation, if such principal party is an
individual, private partnership or private company, the foregoing formulation
cannot be applied to determine the cash amount into which the Rights are
exchangeable, then the Board of Directors, based upon the advice from one or
more investment banking firms, shall determine such amount reasonably and with
utmost good faith to the holders of Rights. Any such determination shall be
binding and final.
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(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and each principal
party and each other Person who may become a principal party as a result of
such consolidation, merger, sale or transfer 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, sale or transfer of assets mentioned in paragraph (a) of this
Section 13, the principal party at its own expense 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, will use
its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and will use
its best efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may be
necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the principal party and each of its
Affiliates which comply in all material respects with the
requirements for registration on Form 10 under the Exchange
Act.
(d) The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction there
are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the consummation of such
transaction would eliminate or substantially diminish the benefits intended
to be afforded by the Rights.
(e) 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 be exercisable in the manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company shall
not be required to issue fractions of Rights 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 the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the trading day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the
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closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights, then the
fair value of the Rights on such date as determined reasonably and with good
faith to the holders of Rights by the Board of Directors of the Company shall be
used and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples
of one one-hundredth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as beneficial
owners of the shares of Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-hundredth of a share of Preferred Stock, the
Company may pay to 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 one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be one one-
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 one of the transactions or
events specified in Section 11 giving rise to the right to receive common
stock equivalents (other than Preferred Stock) or other securities upon the
exercise of a Right, the Company shall not be required to issue fractions of
shares or units of such common stock equivalents or other securities upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of such common stock equivalents or other securities. In
lieu of fractional shares or units of such common stock equivalents or other
securities, 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 a
share or unit of such common stock equivalent or other securities. For
purposes of this Section 14(c), the current market value of such share or
unit shall be determined in the manner set forth in Section 11(d)(i) with
respect to shares of Common Stock except that the current market price shall
be determined by reference only to the trading day immediately prior to the
date of such exercise.
(d) Except as otherwise expressly provided herein, the holder
of a Right by the acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a
Right.
SECTION 15. RIGHTS OF ACTION. From and after the Record Date, all
rights of action in respect of this Agreement, except rights of action given to
the Rights Agent pursuant to
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Sections 20 and 21 hereof, are vested in the respective registered holders of
the Rights Certificates (and during the period that commences on the Record Date
and ends on the Distribution Date, the registered holders of the Common Stock);
and from and after the Record Date any registered holder of any Rights
Certificate (or, during the period that commences on the Record Date and ends on
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 own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the rights evidenced by such 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 or 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. Holders of Rights shall be entitled to recover the reasonable costs
and expenses, including attorneys' fees incurred by them in any action to
enforce the provisions of 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) during the period that commences on the Record Date and
ends on 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 of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, during the period that
commences on the Record Date and ends on 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
shall be affected by any notice to the contrary.
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 shares of Preferred Stock, Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any 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
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matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions thereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. 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 reasonable disbursements incurred
in the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnification provided for hereunder
shall survive the expiration of the Rights and the termination of this
Agreement.
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 the Preferred Shares or Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it, after property inquiry or
examination, to be genuine and to be signed, executed and, where necessary
verified or acknowledged, by the proper Person or Persons or otherwise upon the
advice of counsel set forth in Section 20 hereof.
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 or stock transfer 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 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 the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at the 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 in
this Agreement.
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(b) If 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 the 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 selected
by it (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 an Acquiring
Person and the determination of the current market price per share of Common
Stock) be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board, a Vice Chairman, the Chief Executive Officer, the President, any
Vice President, the Secretary or the Treasurer of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any 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
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adjustment required under the provisions of Sections 3, 11, 13, 23 or 24
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 that such change or adjustment is
required); nor shall it be responsible for any determination by the Board of
Directors of the Company of the current market value of the Rights or
Preferred Stock or Common Stock pursuant to the provisions of Section 14
hereof; 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 Preferred Stock or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Preferred
Stock or other securities 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 any one of the Chairman of the Board, a Vice Chairman, the Chief
Executive Officer, the President, any Vice President, the Secretary or the
Treasurer of the Company, and is authorized 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 or for any delay in acting
while waiting for those instructions.
(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, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, omission, default, neglect or misconduct,
provided 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
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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 Rights 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 required to take notice of or
be deemed to have notice of any fact, event or determination under this
Agreement unless and until the Rights Agent shall be specifically notified
in writing by the Company of such fact, event or determination.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock and Preferred Stock by registered or certified mail, and to
holders of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock 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 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 the 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) a corporation organized and
doing business under the laws of the United States or the State of Texas or 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, having an office in the State of Texas or the
State of New York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million or (b) an
affiliate of a corporation described in clause (a) of this sentence. 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
Preferred Stock, and mail a notice thereof in writing to the registered
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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 its Board of Directors to reflect any adjustment or change in
the Purchase Price per share 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.
SECTION 23. EXCHANGE. (a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, authorize and
direct the Company to 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 shares of Common Stock at
an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
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 shares of
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 shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 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 shares of 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.
(c) In any exchange pursuant to this Section 23, the Company,
at its option, may substitute Preferred Shares (or equivalent preferred
shares, as such term is defined in Section 11(b) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one one-hundredth of a
Preferred Share (or equivalent preferred share) for each Common
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Share, as appropriately adjusted to reflect adjustments in the voting rights
of the Preferred Shares pursuant to the terms thereof, so that the fraction
of a Preferred Share delivered in lieu of each Common Share shall have the
same voting rights as one Common Share.
(d) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 23,
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence shares
of Common Stock in connection with any exchange made pursuant to this
Section 23. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this paragraph (e), 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.
SECTION 24. REDEMPTION. (a) The Company may, by resolution of its
Board of Directors (which resolution shall, if adopted following the Stock
Acquisition Date, be effective only with the concurrence of a majority of the
Continuing Directors and only if the Continuing Directors constitute a majority
of the number of directors then in office), at its option, at any time prior to
the earlier of (x) the Close of Business on the tenth Business Day following the
Stock Acquisition Date or (y) the Close of Business on the Expiration Date
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.01 per Right (payable in cash, shares of Common Stock (based on the
current market price, determined pursuant to Section 11(d), of the Common Stock
at the time of redemption) or any other form of consideration deemed appropriate
by the Board of Directors of the Company), 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"); provided, however, that the Board of Directors of the Company may act
only with the concurrence of a majority of the Continuing Directors in
authorizing redemption of the Rights on or after the date of a change (resulting
from a proxy or consent solicitation effected in compliance with applicable law
and the requirements of any national securities exchange on which the Common
Stock of the company is listed) in a majority of the directors in office at the
commencement of such solicitation if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such solicitation, a
majority of the Board of Directors of the Company has determined in good faith)
that such Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action which would result in such Person becoming an
Acquiring Person or which would cause the occurrence of a Triggering Event.
(b) In the event that, following the occurrence of the Stock
Acquisition Date and following the expiration of the right of redemption
under subparagraph (a) of this
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Section 24, but prior to any Triggering Event, (i) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of a number of shares of
Common Stock of the Company in one transaction, or a series of transactions (not
directly or indirectly involving the Company or any of its Subsidiaries), which
did not result in the occurrence of a Triggering Event, such that such Person is
thereafter a Beneficial Owner of 5% or less of the outstanding Common Stock of
the Company, (ii) there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are Acquiring Persons and
(iii) the Board of Directors of the Company (with the concurrence of a majority
of the Continuing Directors) shall so approve, then the Company's right of
redemption provided in subparagraph (a) of this Section 24 shall be reinstated
and thereafter all outstanding Rights shall again be subject to the provisions
of this Section 24.
(c) 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 during such time as the Company has the right
to redeem the Rights under this Section 24.
(d) Immediately upon the action of the Board of Directors of
the Company (with, if required, the concurrence of a majority of the
continuing Directors) ordering the redemption of the Rights (or at such time
subsequent to such action as the Board of Directors, with the concurrence of
a majority of the Continuing Directors, may determine, including, without
limitation, the time of the occurrence of one or more events or the
satisfaction of one or more conditions), 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. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Stock of the
Company. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase any Rights at any time in any
manner other than that specifically set forth in this Section 24, other than
in connection with the repurchase of Common Stock of the Company prior to
the Distribution Date.
SECTION 25. NOTICE OF CERTAIN EVENTS. (a) If after the Record Date the
Company shall propose (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), (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, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, or (v)
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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,
in accordance with Section 27 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 10 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 10 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) If any of the events set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, the Company shall as
soon as practicable thereafter give to each holder of a Rights Certificate,
in accordance with Section 26 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.
SECTION 26. NOTICES. (a) Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Bellwether Exploration Company
1331 Lamar, Suite 1455
Houston, Texas 77010
Attn: Secretary
(b) 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 first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attn: Corporate Trust Department
(c) 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 shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time
to time supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order to cure any ambiguity, to correct or supplement
any provision
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contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person) and only if approved
by the Continuing Directors. Without limiting the foregoing, the Company may at
any time prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the threshold set forth in Section 1(a) to not less than the
greater of (i) any percentage greater than the largest percentage of the then
outstanding Common Stock then known by the Company to be beneficially owned by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, any entity holding
Common Stock for or pursuant to the terms of any such plan) and (ii) 10%. Prior
to the Record Date, the Board of Directors of the Company may amend, modify or
terminate this Agreement in any manner determined, in their sole discretion, to
be necessary or appropriate.
SECTION 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, 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
or any other securities 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 as in effect on the date of this
Agreement. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or 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 Certificates and all other parties, (y)
not subject the Board to any liability to the holders of the Rights
Certificates.
SECTION 29. 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 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common Stock).
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SECTION 31. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW. This Agreement, 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 to
be made and to be performed entirely within such State.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereto affixed and attested,
all as of the day and year first above written.
BELLWETHER EXPLORATION COMPANY
Attest: By:
---------------------- ---------------------------
Name: J. Darby Sere
Title: Chairman and
Chief Executive Officer
AMERICAN STOCK TRANSFER &
TRUST COMPANY
Attest: By:
---------------------- ---------------------------
Name:
Title:
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