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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (b) of the
Securities Exchange Act of 1934
EVERGREEN RESOURCES, INC.
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(Exact Name of Registrant as Specified in its Charter)
COLORADO 84-0834147
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(State of Incorporation (I.R.S. Employer
or Organization) Identification No.)
1512 LARIMER STREET, DENVER, CO 80202
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(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and if
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(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- - ------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK PURCHASE RIGHTS
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(Title of Class)
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Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On July 7, 1997, the Board of Directors of Evergreen Resources, Inc. (the
"Company") declared a dividend distribution of one Common Stock Purchase Right
(the "Right") for each outstanding share of Common Stock of the Company to
stockholders of record at the close of business on July 22, 1997. Each Right
entitles the registered holder to purchase from the Company one share of Common
Stock, no par value per share (the "Common Stock"), at a cash exercise price of
$42.50 per share), subject to adjustment. The description and terms of the
Rights are set forth in a Shareholder Rights Agreement between the Company and
American Securities Transfer & Trust, Inc., as Rights Agent.
Initially, the Rights will not be exercisable, will be attached to all
outstanding shares of Common Stock, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earliest of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired Beneficial Ownership of 20% or more of the outstanding
shares of Common Stock (the date of said announcement being referred to as the
"Share Acquisition Date") and (ii) 10 business days following the commencement
(or the public announcement of the commencement) of a tender offer or exchange
offer that would result in a Person or group owning 20% or more of the
outstanding shares of Common Stock. Persons currently beneficially owning more
the 20% of the outstanding Common Stock will not be considered an Acquiring
Person unless such Person's ownership interest increases to 30%.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (a) the Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock certificates, (b) the
new Common Stock certificates issued after July 22, 1997 will contain a notation
incorporating the Shareholder Rights Agreement by reference, and (c) the
surrender for transfer of any certificates for Common Stock will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on July 22, 2007, unless previously redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Right Certificates will
be mailed to holders of record of Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Right Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
ln the event that (i) a Person acquires beneficial ownership of 20% or more
of the Company's Common Stock, (ii) the Company is the surviving corporation in
a merger with an Acquiring Person or any Affiliate or Associate and the Common
Stock is not changed or exchanged, (iii) an Acquiring Person engages in one of a
number of self-dealing transactions specified in the Shareholder Rights
Agreement, or (iv) an event occurs which results in an Acquiring Person's
ownership interest being increased by more than 1% (e.g., a reverse stock
split), proper provision will be made so that each holder of a Right will
thereafter have the right to receive upon exercise thereof at the then current
exercise price, that number of shares of Common Stock (or in certain
circumstances, cash, property, or other securities of the
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Company) having a market value of two times such exercise price. However, the
Rights are not exercisable following the occurrence of any of the events set
forth above until such time as the Rights are no longer redeemable as set forth
below. Notwithstanding any of the foregoing, Rights that are or were
beneficially owned by an Acquiring Person shall become null and void.
In the event that, at any time following the Share Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction or
(ii) 50% or more of the Company's assets or earning power is sold, each holder
of a Right shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a market value equal to two times the
exercise price of the Right.
At any time after any Person becomes an Acquiring Person and prior to such
the time such Person, together with its Affiliates and Associates, becomes the
Beneficial Owner of 50% or more of the outstanding Common Stock, the Board of
Directors of the Company may exchange the Rights (other than Rights which have
become void), in whole or in part, at the exchange rate of one share of Common
Stock per Right, subject to adjustment as provided in the Rights Agreement.
The exercise price payable and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights, are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or securities convertible into Common
Stock at less than the current market price of the Common Stock, or (iii) upon
the distribution to holders of the Common Stock of evidence of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the exercise price will be
required until cumulative adjustments amount to at least 1% of the exercise
price. No fractional shares of Common Stock will be issued and, in lieu
thereof, an adjustment in cash will be made based on the fair market value of
the Common Stock on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of $.001
per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors) by the Board of Directors at any time
prior to a person becoming an Acquiring Person or the Final Expiration Date of
the Rights (whichever is earlier); provided that under certain circumstances,
the Rights may not be redeemed unless there are Disinterested Directors in
office and such redemption is approved by a majority of such Disinterested
Directors. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and thereafter the only
right of the holders of Rights will be to receive the redemption price.
Until a Right is exercised, the holder will have no rights as a stockholder
of the Company (beyond those as an existing stockholder), including the right to
vote or to receive dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of an acquiring company as set forth above.
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Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement, other than those
relating to the principal economic terms of the Rights, may be amended by the
Board to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement. Amendments adjusting time periods may, under certain
circumstances, require the approval of a majority of Disinterested Directors, or
otherwise be limited.
A copy of the Shareholder Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Shareholder Rights
Agreement. Capitalized terms used in the foregoing which are defined in the
Rights Agreement have the same meaning as in the Rights Agreement.
Item 2. EXHIBITS
Shareholder Rights Agreement dated as of July 7, 1997 between the Company
and American Securities Transfer & Trust, Inc., as Rights Agent, which includes,
as Exhibit A, the Form of Rights Certificate and as Exhibit B, the Summary of
Rights to Purchase Common Stock. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until as soon as practicable after the earlier
of (i) 10 business days following a "Share Acquisition Date" (as defined in the
Rights Agreement) or (ii) 10 business days following the date of (x) the
commencement, by any Person (as defined in the Rights Agreement), other than an
Exempt Person (as defined in the Rights Agreement), of, or (y) the first public
announcement of the intention of any Person (other than an Exempt Person) to
commence, a tender or exchange offer if, upon consummation thereof, such Person
would be the Beneficial Owner (as defined in the Rights Agreement) of 20% or
more of the then outstanding shares of Common Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Evergreen Resources, Inc.
Date: July 7, 1997 By: /s/ Mark S. Sexton
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Name: Mark S. Sexton
Title: President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT 1. Shareholder Rights Agreement
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EXHIBIT 1
EVERGREEN RESOURCES, INC.
AND
AMERICAN SECURITIES TRANSFER & TRUST, INC.,
as Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
July 7, 1997
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TABLE OF CONTENTS
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SECTION / PAGE
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1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 5
3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . 6
4. Form of Right Certificates. . . . . . . . . . . . . . . . . . . . . . . 7
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . 8
6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. . . . . . . . . . . . . . . . . . . . . . . 9
7. Exercise of Rights; Exercise Price; Final Expiration Date of Rights . .
8. Cancellation and Destruction of Right Certificates. . . . . . . . . . . 11
9. Reservation and Availability of Common Stock. . . . . . . . . . . . . . 11
10. Common Stock Record Date. . . . . . . . . . . . . . . . . . . . . . . . 13
11. Adjustment of Exercise Price, Number and Kind of Shares or Number of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12. Certificate of Adjusted Exercise Price or Number of Shares. . . . . . . 21
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. . 21
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . 23
15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . . . . 25
17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . 25
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . 26
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . 26
20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 27
21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 29
22. Issuance of New Right Certificates. . . . . . . . . . . . . . . . . . . 30
23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . . . 32
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
27. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . . . 34
28. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
29. Determination and Actions by the Board of Directors . . . . . . . . . . 34
30. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . . . . 35
31. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
34. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 36
Exhibit A -- Form of Right Certificate . . . . . . . . . . . . . . . . . . . 37
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SHAREHOLDER RIGHTS AGREEMENT
Shareholder Rights Agreement (as the same may from time to time be amended
or supplemented, this "Agreement"), dated as of July 7, 1997, between Evergreen
Resources, Inc., a Colorado corporation (the "Company"), and American Securities
Transfer & Trust, Inc., a Colorado corporation (the "Rights Agent", which term
shall include any successor Rights Agent hereunder).
W I T N E S S E T H
WHEREAS, on July 7, 1997 the Board of Directors of the Company authorized
and declared a dividend distribution to stockholders of record at the Close of
Business on July 22, 1997 (the "Record Date") of one Right (as hereinafter
defined) for each outstanding share of Company's no par value common stock (the
"Common Stock"), and authorizes the issuance of one Right for each whole share
of Common Stock which is issued or which becomes outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter defined), each Right
initially representing the right to purchase one share of Common Stock, upon the
terms and conditions set forth herein (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall on any date hereafter, be
the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or any of its
Subsidiaries, (iv) any entity or Person holding shares of Common Stock for or
pursuant to the terms of any such plan or (v) any Person beneficially owning in
excess of 20% of the outstanding Common Stock as of the date of this Agreement.
The Persons described in clauses (i) through (v) above are referred to herein as
"Exempt Persons"; provided however that any Person described in subsection (v)
above shall cease status as an Exempt Person if, after the date of this Plan,
such Person or entity increases his, her or its beneficial ownership to more
than 30% of the outstanding Common Stock. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an acquisition of
Common Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares Beneficially Owned by such Person
to 20% or more of the Common Stock then outstanding; PROVIDED, HOWEVER, that if
any Person (other than Exempt Persons) shall become the Beneficial Owner of 20%
or more of the Common Stock then outstanding (or in the case of a Person
referenced in clause (v) above, 30%) by reason of share purchases by the Company
and shall,
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after such share purchases by the Company, become the Beneficial Owner of any
additional shares of Common Stock, then such Person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, 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 such Person divests as
promptly as practicable a sufficient number of shares 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) "ADJUSTMENT EVENT" shall mean a Section 11(a)(ii) Event or any
Section 13 Event.
(c) "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii).
(d) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement; PROVIDED, HOWEVER,
that no Exempt Person shall be deemed an Affiliate or an Associate.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own" any securities:
(i) which such Person and such Person's Affiliates or Associates,
Beneficially Own, directly or indirectly (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement) or has the right to dispose of;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire (whether
such right is exercisable immediately or after the passage of time)
pursuant to any agreement, arrangement or understanding, upon the exercise
of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person shall
not be deemed the "Beneficial Owner" of, or to "Beneficially Own" (1)
securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; (2) securities issuable
upon exercise of Rights at any time prior to the occurrence of an
Adjustment Event; or (3) securities issuable upon exercise of Rights from
and after the occurrence of an Adjustment Event, if such Rights were
acquired by such Person or such Person's Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3(a) or Section 22 or pursuant
to Section 11(a)(i) in connection with an adjustment made with respect to
any of the Rights heretofore specified in this clause (3); or (B) the right
to vote pursuant to any agreement, arrangement or understanding (whether or
not in writing); PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to
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"Beneficially Own," any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises solely from
a revocable proxy or consent given to such Person or any of such Person's
Affiliates or Associates 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, or (2) is made in
connection with, or is to otherwise participate in, a proxy or consent
solicitation made or to be made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act, in
the case of either clause (1) or (2) of this proviso only if such
agreement, arrangement or understanding is not also then reportable
by such person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are Beneficially Owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing), for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of Section i(e)(ii) hereof) or disposing of any
securities of the Company; PROVIDED, HOWEVER, that (1) no Person engaged in
business as an underwriter of securities shall be deemed the Beneficial
Owner of any securities acquired through such Person's participation as an
underwriter or selling group member in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such
acquisition and (2) no Person who is a director or an officer of the
Company shall be deemed the Beneficial Owner of any securities of the
Company that are Beneficially Owned by any other director or officer of the
Company solely as a result of his or her position as director or officer of
the Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such person would be
deemed to own beneficially hereunder.
(f) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of Colorado are authorized or
obligated by law or executive order to close.
(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., Denver
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it shall mean 5:00 P.M., Denver time, on the next succeeding Business Day.
(h) "COMMON STOCK" shall mean the Common Stock, no par value per share, of
the Company, except that "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock (or equity interest) with
the greatest voting power of such
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Person, or the equity securities or other equity interest having power to
control or direct the management of such person or, if such Person is a
subsidiary of another Person, the Person which ultimately controls such
first-mentioned Person and which has issued and outstanding such capital
stock, equity securities or equity interests.
(i) "CURRENT PER SHARE MARKET PRICE" shall have the meaning set forth in
Section 11(d)(i).
(j) "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii).
(k) "DISINTERESTED DIRECTOR" shall mean (i) any member of the Company's
Board of Directors who is unaffiliated with an Acquiring Person, or an Affiliate
or Associate of any such Person and was a member of the Company's Board of
Directors prior to the time that an Acquiring Person became such, and (ii) any
successor of a Disinterested Director who is unaffiliated with an Acquiring
Person, or any Affiliate or Associate of any such Person and is recommended to
succeed a Disinterested Director by a majority of the Disinterested Directors
then on the Company's Board of Directors.
(l) "DISTRIBUTION DATE" shall have the meaning defined in Section 3(a)
hereof.
(m) "EQUIVALENT COMMON STOCK" shall have the meaning set forth in Section
11(a)(iii) hereof.
(n) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(o) "EXCHANGE RATE" shall have the meaning set forth in Section 24(a)
hereof
(p) "EXERCISE PRICE" shall have the meaning set forth in Section 4 hereof.
(q) "FINAL EXPIRATION DATE" shall have the meaning set forth in Section
7(a) hereof.
(r) "GROUP" shall mean two or more Persons acting as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of the Common Stock.
(s) "PERSON" shall mean any individual, firm, corporation, partnership or
other entity or Group, and shall include any successor (by merger or otherwise)
thereof; PROVIDED, HOWEVER, that when two or more Persons act as a partnership,
limited partnership, syndicate or other Group for the purpose of acquiring,
holding disposing of the Common Stock, such partnership, limited partnership,
syndicate or other Group shall be deemed to be a single Person.
(t) "PRINCIPAL PARTY" shall have the meaning set forth in Section 13(b)
hereof.
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(u) "RECORD DATE" shall have the meaning set forth in the recital
clause of this Agreement.
(v) "REDEMPTION DATE" shall have the meaning set forth in Section 7(a).
(w) "RIGHTS" shall have the meaning set forth in the recital clause of
this Agreement.
(x) "RIGHT CERTIFICATE" shall have the meaning set forth in Section
3(a).
(y) "SECTION 11(a)(ii) ADJUSTMENT DATE" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(z) "SECTION 11(a)(ii) EVENT" shall mean the event described in Section
11(a)(ii) hereof.
(aa) "SECTION 13 EVENT" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(bb) "SHARE ACQUISITION DATE" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(cc) "SPREAD" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(dd) "SUBSIDIARY" of any Person shall mean any other corporation or
other entity of which a majority of the voting power of the voting equity
securities or voting interests is owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
(ee) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ff) "SUMMARY OF RIGHTS" shall have the meaning set forth in Section
3(b).
(gg) "TRADING DAY" shall have the meaning set forth in Section 11(d)(i)
hereof.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights
Agents shall be as the Company shall determine.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i) the
Close of Business on
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the 10th calendar day after the Share Acquisition Date, (ii) the Close of
Business on the 10th Business Day (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any
Person shall become an Acquiring Person) after the date of (x) the
commencement, by any Person, other than an Exempt Person, of, or (y) the
first public announcement of the intention of any Person (other than an
Exempt Person) to commence, a tender or exchange offer if, upon consummation
thereof, such Person would be an Acquiring Person, including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights (the earliest of such dates being herein referred to as the
"Distribution Date"), the Rights will be evidenced (subject to the provisions
of Section 3(b) hereof) by certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by separate
certificates, and the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock. The Board of Directors of
the Company may defer the date set forth in clause (ii) in the preceding
sentence to a specified later date or to an unspecified later date to be
determined, with the concurrence of a majority of the Disinterested
Directors, by action of the Directors of the Company. As soon as practicable
after the Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Rights Agent will send, by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the
Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more certificates, in
substantially the form of Exhibit A hereto (the "Right Certificates),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. As of and after the Close of Business on the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of the Summary of Rights, in substantially the form
attached hereto as Exhibit B, by first-class, postage prepaid mail, to each
record holder of the 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 the earlier of the Redemption Date or
the Final Expiration Date, the Rights will be evidenced by such certificates
for the Common Stock with or without a copy of the Summary of Rights attached
thereto, and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the Distribution Date (or
earlier redemption, expiration or termination of the Rights), the transfer of
any of the certificates for the Common Stock outstanding on the Record Date,
even 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 the Common Stock issued after the Record Date,
but prior to the earlier of the Distribution Date, the Redemption Date or the
Final Expiration Date, shall be deemed also to be certificates for Rights,
and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set
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forth in a Shareholder Rights Agreement between Evergreen Resources,
Inc. and American Securities Transfer & Trust, Inc., as Rights Agent,
dated as of July 7, 1997, as such is amended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal offices of
Evergreen Resources, Inc. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Evergreen Resources, Inc. will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor.
Under certain circumstances, Rights issued to Acquiring Persons or any
Affiliates or Associates thereof (as defined in the Rights Agreement)
and any subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date or the earlier of the Redemption Date or the Final
Expiration Date, 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.
In the event that the Company purchases or acquires any shares of 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 which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. (a) The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall each be substantially in the form of Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law, rule or
regulation or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 11 and Section 22 hereof, the Right Certificates,
whenever distributed, shall be dated as of the Record Date, and on their face
shall entitle the holders thereof to Purchase such number of shares of Common
Stock as shall be set forth therein at the price set forth therein (the
"Exercise Price"), but the number of such shares and the Exercise Price shall
be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights Beneficially Owned by (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person or (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of
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equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
Section 11 hereof, and any Right Certificate issued pursuant to Section 6 or
Section 11 upon transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall contain the following
legend:
The Rights represented by this Right Certificate are or were Beneficially
Owned by a Person who was or became an Acquiring Person or an Affiliate or
an Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement). This Right Certificate and the Rights represented
hereby may become null and void under certain circumstances as specified
in Section 11 of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it becomes
aware of the existence an identity of any Acquiring Person or any Associate
or Affiliate thereof.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or any Assistant Secretary of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the Person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificates may be signed on behalf of the Company by any Person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such Person was not such
an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at one of its offices designated as the appropriate place
for surrender of Right Certificates upon exercise or transfer, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Section 4(b), Section 11 and Section 14 hereof,
at any time after the Close of Business on the Distribution Date, and
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at or prior to the Close of Business on the earlier of the Redemption Date or
the Final Expiration Date, any Right Certificate or Certificates (other than
Right Certificates representing Rights that have become void pursuant to
Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Right
Certificate or Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock (or following an Adjustment Event,
other securities, cash or other assets as the case may be) as the Right
Certificate or Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or
Certificates to be transferred, split up, combined or exchanged, with the
form of assignment and certificate duly executed, at the office or offices of
the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate until the registered
holder shall have completed and signed the certificate contained in the form
of assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 11 and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Right Certificate or Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will execute and deliver a new Right Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; FINAL EXPIRATION DATE OF
RIGHTS. (a) Subject to Section 11(a)(ii) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9, Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Exercise Price for the total number of
shares of Common Stock (or other securities, cash or other assets, as the
case may be) as to which such surrendered Rights are then exercised, at or
prior to the earlier of (i) the Close of Business on June 22, 2007 (the
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof
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(the "Redemption Date") or (iii) the time which such Rights are exchanged as
provided in Section 24. Except as set forth in Section 11(a) hereof and
notwithstanding any other provision of this Agreement, any Person who prior
to the Distribution Date becomes a record holder of shares of Common Stock
may exercise all of the rights of a registered holder of a Right Certificate
with respect to the Rights associated with such shares of Common Stock in
accordance with the provisions of this Agreement, as of the date such Person
becomes a record holder of shares of Common Stock.
(b) The Exercise Price for one share of Common Stock pursuant to the
exercise of a Right shall initially be $42.50, shall be subject to adjustment
from time to time provided in Section 11 and Section 13 hereof, and shall be
payable in lawful money of the United States of America in accordance with
Section 7(c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, accompanied by payment of the Exercise
Price for the shares (or, following an Adjustment Event, other securities,
cash or other assets, as the case may be) to be purchased and an amount equal
to any applicable transfer tax (as determined by the Rights Agent) in cash,
or by certified check or bank draft payment to the order of the Company, the
Rights Agent shall, subject to Section 20(j) hereof, thereupon promptly
(i)(A) requisition from any transfer agent of the shares of Common Stock (or
make available, if the Rights Agent is the transfer agent therefor)
certificates for the number of shares of Common Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Common Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of shares of Common Stock as are
to be purchased (in which case certificates for the shares of Common 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) when appropriate, 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 hereof, (iii) promptly after receipt of
such certificates or depository receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and (iv)
when appropriate, after receipt promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the event that
the Company is obligated to issue other securities of the Company, pay cash
or distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash or
other property are available for distribution by the Rights Agent, if and
when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14
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hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights upon the occurrence of any
purported 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 Right
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIQHT CERTIFICATES. All Right
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
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF COMMON STOCK. (a) The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock (and, following the
occurrence of an Adjustment Event, other securities or out of its authorized
and issued shares held in its treasury) the number of shares of Common Stock
(and, following the occurrence of an Adjustment Event, other securities)
that, as provided in this Agreement will be sufficient to permit the exercise
in full of all outstanding Rights; provided, that such action need not be
taken with respect to shares of Common Stock (or other securities) issuable
upon occurrence of an Adjustment Event until the occurrence of such event.
(b) If at the time the Rights become exercisable, the then outstanding
shares of Common Stock are listed on any national or regional securities
exchange or are quoted on the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or any successor thereto or other
comparable quotation system, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares of
Common Stock (and, following the occurrence of an Adjustment Event, other
securities) reserved for issuance upon such exercise to be quoted on such
system or listed on such exchange, as the case may be.
(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
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this Agreement, or as soon as required by law following the Distribution
Date, as the case may be, a registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Common Stock
or other 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 that at all times meets the requirements
of the Securities Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may be
appropriate under, and which will ensure compliance with, the securities or
blue sky laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9 (c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective. Upon 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 unless the requisite qualification in such jurisdiction shall
have been obtained.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Common Stock (and, following
the occurrence of an Adjustment Event, other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Exercise Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that, subject to Section
6, it will pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance or delivery
of the Right Certificates or of any certificates for shares of Common Stock
(or other securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a
Person other than, or in respect of the issuance or delivery of securities in
a name other than that of, the registered holder of the Right Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for securities 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 Right 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. COMMON STOCK RECORD DATE. Each Person in whose name any
certificate for Common Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares of
Common Stock represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable transfer
taxes) was made;
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PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Common Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Stock transfer books of the Company are open. Prior to the exercise of the Right
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a shareholder 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 EXERCISE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Exercise Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Stock payable in shares
of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine
the outstanding Common Stock into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of Common Stock or capital stock, as
the case may be, which, if such Right had been exercised immediately prior
to such date and at a time when the Common Stock (or other capital stock,
as the case may be) 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 the Company
issuable upon the exercise thereof.
(ii) Subject to Section 24, in the event any Person shall become an
Acquiring Person (a "Section 11(a)(ii) Event"), then each holder of a
Right, except as provided in this paragraph (ii), shall thereafter have a
right to receive, upon exercise thereof at the then current Exercise Price
in accordance with the terms of this Agreement, and in lieu of shares of
Common Stock issuable upon exercise of such Rights prior to such event,
such number of shares of Common Stock as shall equal the result obtained by
(x) multiplying the then current Exercise Price by the then number of
shares of Common Stock for which a Right was exercisable immediately prior
to the occurrence of a Section 11(a)(ii) Event and (y) dividing that
product (which, following such occurrence, shall thereafter be re-
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ferred to as the "Exercise Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Per Share Market Price of the Common
Stock (determined pursuant to Section 11(d)) on the date of the occurrence
of a Section 11(a)(ii) Event (such number of shares is herein called the
"Adjustment Shares").
Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Section 11(a)(ii) Event, any Rights Beneficially
Owned by (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights, or (B) a
transfer which the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 11(a), shall become null and void
without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 11(a) and Section
4(b) hereof are complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any Affiliates and
Associates thereof or any transferee of any of them hereunder.
(iii) In the event that the number of shares of Common Stock which
are authorized by the Company's articles of organization but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with Section 11(a)(ii), the Company 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 Exercise
Price (such excess is herein called the "Spread"), and (B) with respect to
each Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Exercise Price, (1) cash, (2) a
reduction in the Exercise 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 has deemed to have the same
value as shares of Common Stock (such shares or units of shares of
preferred stock are herein called "Equivalent Common Stock")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board based upon the advice of a
competent investment banking firm selected by the Board; PROVIDED, HOWEVER,
if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30)
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days following the occurrence of a Section 11(a)(ii) Event (the "Section
11(a)(ii) Adjustment Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Exercise Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares or cash
have an aggregate value equal to the Spread. If the Board shall
determine in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Adjustment Date, in order that the Company
may seek stockholder approval for the authorization of such additional
shares (such thirty (30) day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first or
second sentence of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 11(a) 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 an authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. For the purpose of this Section 11(a)(iii), the value
of Adjustment Shares shall be the Current Per Share Market Price of the
Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share
or per unit value of any Equivalent Common Stock shall be deemed to
equal the Current Per Share Market Price of the Common Stock on such
date.
(b) If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Stock or Equivalent Common Stock or
securities convertible into Common Stock or Equivalent Common Stock at a price
per share of Common Stock or per share of Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common Stock or
Equivalent Common Stock) less than the Current Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of the Common Stock on such record
date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding on such record date, plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock or Equivalent Common Stock to be offered (and the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Per Share Market Price and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock or Equivalent Common 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 one
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Right be less than the aggregate par value of the shares of the Company
issuable upon the exercise thereof. In case such subscription price may be
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be the Current Per Share Market
Price thereof determined in accordance with Section 11(d) hereof. Shares of
Common Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustments
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 Exercise Price
shall be adjusted to be the Exercise Price which would then be in effect if
such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
periodic cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or options, subscription
rights or warrants (excluding those referred to in Section 11(b)), the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of Common Stock on such record
date, less the Current Per Share Market Price (as determined pursuant to Section
11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such options, subscription rights or warrants applicable
to one share of Common Stock and the denominator of which shall be the Current
Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one
share of Common Stock; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of the Company issuable upon the exercise
thereof. 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 Exercise
Price shall again be adjusted to be the Exercise Price which would be in effect
if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Current Per Share Market
Price" of any share of Common Stock or any other stock or any Right or other
security or any other property shall be determined as provided in this Section
11(d).
(i) In the case of a publicly-traded stock or other security
(hereinafter in this Section 11(d)(i) a "Security"), the Current Per Share
Market Price on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to
such date; PROVIDED, HOWEVER, that for the purpose of computations made
pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price
on any date shall be deemed to be the average of the daily closing prices
per share of such Security for the ten (10) consecutive Trading Days
immediately following such date; and PROVIDED FURTHER, that
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in the event that the Current Per Share Market Price of any Security is
determined during a period following the announcement by the issuer of
such Security of (x) a dividend or distribution on such Security payable
in shares of such Security or securities convertible into shares of such
Security (other than the Rights) or (y) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set
forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Per Share
Market Price shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case
as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Securities 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 such
Security is listed or admitted to trading; or, if not listed or admitted
to trading on any national securities exchange, the last quoted price
(or, if not so quoted, the average of the last quoted 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 no bids for such
Security are 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 such Security selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in such
Security, the Current Per Share Market Price of such Security on such
date shall be determined reasonably and with utmost good faith to the
holders of the Rights by the Board of Directors of the Company,
including, if at the time of such determination there is an Acquiring
Person, a majority of the Disinterested Directors then in office, or if
there are no Disinterested Directors, by a competent investment banking
firm selected by the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which such Security is listed or admitted to
trading is open for the transaction of business or, if such Security is
not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) If a Security is not publicly held or not so listed or traded,
"Current Per Share Market Price" shall mean the fair value per share of
stock or per other unit of such Security, determined reasonably and with
utmost good faith to the holders of the Rights by the Board of Directors of
the Company, including, if at the time of such determination there is an
Acquiring Person, a majority of the Disinterested Directors then in office,
or if there are no Disinterested Directors, by a competent investment
banking firm selected by the Board of Directors, which determination shall
be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights.
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(iii) In the case of property other than securities, the Current
Per Share Market Price thereof shall be determined reasonably and with
utmost good faith to the holders of Rights by the Board of Directors of the
Company, including, if at the time of such determination there is an
Acquiring Person, a majority of the Disinterested Directors then in office,
or if there are no Disinterested Directors, by a competent investment
banking firm selected by the Board of Directors, which determination shall
be described in a statement filed with the Rights Agent and shall be
binding upon the Rights Agent and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share, as the case may be.
Notwithstanding the first sentence of this Section 11 (e), any adjustment
required by this Section shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Exercise Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Section 11(a) through
(c), (e), (g) through (k), and (m), inclusive, and the provisions of sections 7,
9, 10, 13 and 14 hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of shares (or fractions
thereof) of Common Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Exercise 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 Exercise Price, that number of shares of Common Stock
(calculated to the nearest one ten-thousandth) obtained by (i) multiplying (x)
the number of shares covered by a Right immediately prior to this adjustment by
(y) the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.
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(i) The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common 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 shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Exercise Price in effect immediately prior to adjustment of the Exercise
Price by the Exercise Price in effect immediately after adjustment of the
Exercise 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 Exercise Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right 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 Exercise Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express the
Exercise Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Exercise Price below the then par value, if any, of the number of shares of
Common Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Exercise 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 number
of shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise
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on the basis of the Exercise Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Stock, issuance wholly
for cash of any shares of Common Stock at less than the Current Per Share Market
Price, issuance wholly for cash of shares of Common Stock or securities which by
their terms are convertible into or exchangeable for shares of Common 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
Common Stock, shall not be taxable to such shareholders.
(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 (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person 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 Section 27 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.
Section 12. CERTIFICATE OF ADIUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
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Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that, on or after the Share 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 which
is not prohibited by Section 11(n) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger; (y) any
Person (other than a Subsidiary of the Company in a transaction which is not
prohibited by Section 11(n) hereof) 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 transaction or a series of
related transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which is not prohibited by Section
11(n) hereof), then, and in each such case, proper provision shall be made so
that: (i) each holder of a Right, except as provided otherwise herein, shall
have the right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined in Section
13(b)), free and clear of rights of call or first refusal, liens, encumbrances
or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Exercise Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of shares of
Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Exercise Price in effect
immediately prior to such first occurrence) and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Exercise Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the Current Per Share Market Price (determined pursuant to Section
11(d) hereof) of the Common Stock of such Principal Party 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 reservation of a sufficient number of shares of its Common Stock
to permit exercise of all outstanding Rights in accordance with this Section
13(a)) 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. The Company shall not enter into any transaction of
the kind set forth in this subsection if at the time of the consummation of such
transaction there are any options, warrants, rights, conversion or exchange
provisions or securities outstanding or any agreements
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or arrangements in effect which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits intended
to be afforded by the Rights. If, in the case of a transaction of the kind
described in clause (z) of the first sentence of this subsection, the Person
or Persons to whom assets or earning power are sold or otherwise transferred
are individuals, then the preceding sentences of this subsection shall be
inapplicable, and the Company shall require as a condition to such sale or
transfer that such Person or Persons pay to each holder of a Rights
Certificate, upon its surrender to the Rights Agent and in exchange therefor
(without requiring payment by such holder), cash in the amount determined by
multiplying the then current Exercise Price by the number of shares of Common
Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock 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; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions; PROVIDED, HOWEVER, that in any such case,
(x) 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 of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (y) in case such
Person is a Subsidiary, directly or indirectly, or 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 of shares
outstanding.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto (x) the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13, and (y) 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 Section 13(a) and
(b) and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in Section 13(a),
the Principal Party at its own expense will
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
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registration statement to remain effective (with a prospectus that at all
times meets the requirements of the Securities Act) until the Final
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;
(iii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility requirements
for quotation on NASDAQ; and
(iv) 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.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If any Section 13 Event shall occur
at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company shall
not be required to issue fractions of Rights, or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there may be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 14(a), the current market value of one Right
shall be the closing price per Right for the Trading Day immediately prior to
such date on which fractional Rights would have been otherwise issuable. The
closing price for any Trading Day shall be the last sale price, regular way, or,
in case no such sale takes place on such Trading Day, the average of the closing
bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading; or, if not listed or admitted to trading on any
national securities exchange, the last quoted price (or, if not so quoted, the
average of the last quoted 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 Trading Day no bids for the Rights are quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no market maker is making a market
in the Rights the current market value of the Rights on such Trading Day shall
be determined reasonably and with utmost good faith to the holders of the Rights
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the
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Rights Agent and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value per share of
Common Stock. For purposes of this Section 14(b), the current market value per
share of Common Stock shall be the closing price per share of Common Stock
determined pursuant to Section 11(d) hereof for the Trading Day immediately
prior to the date of such exercise.
(c) 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, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Right evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and 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 RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and with the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will be transferable only
simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
offices of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
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(c) subject to Sections 6 and 11, the Company and the Rights Agent may
deem and treat the person in whose name a Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as the result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligations; PROVIDED, HOWEVER, that the Company must use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Common
Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in
Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against any
loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this
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Agreement in reliance upon any Right Certificate or certificate for Common
Stock or other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or in reliance
upon the advice of counsel as set forth in Section 20.
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 shareholder services business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(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
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<PAGE>
identity of any Acquiring Person and the determination of Current Per Share
Market Price) be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any duly
authorized officer of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant to Section 11(a)
hereof) or any 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 Right Certificates after receipt of a certificate describing any
such adjustment furnished in accordance with Section 12 hereof), nor shall it
be responsible for any determination by the Board of Directors of the Company
of current market value of the Rights 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 Common Stock to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Common Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable; nor
shall it be under any obligation to institute any action, suit or legal
proceeding or to take any other action likely to involve expense unless the
Company or one or more of the registered holders of the Rights Certificates
shall furnish the Rights Agent with security and indemnity to its
satisfaction for any costs and expenses which may be incurred; nor shall it
be liable for any failure to perform any duties except as specifically set
forth herein and no implied covenants or obligations shall be read into this
Agreement against the Rights Agent, whose duties and obligations shall be
determined solely by the express provisions hereof.
(f) The Company agrees that it will inform the Rights Agent promptly
upon the Company's determination that a Person has become an Acquiring
Person, and the Rights Agent
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<PAGE>
will not be responsible for making such determination prior to such notice by
the Company. 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 and
certificates delivered pursuant to any provision hereof from any duly
authorized officer 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. Any
application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Agreement and
the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal included
in such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer of
the Company actually receive such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, 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 the 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 vested in it or perform any of its duties hereunder either directly or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorney or agent or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided the Rights Agent exercised
reasonable care in the selection or continued employment of such agent.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause (1) or
clause (2) thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may
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resign and be discharged from its duties under this agreement upon thirty
(30) days notice in writing mailed to the Company, and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent (with or without cause) upon thirty (30)
days notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the incumbent Rights Agent or the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States
or of the State of Colorado (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 Colorado), in good standing, which is authorized
under such laws to exercise shareholder services or corporate trust 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 $50,000,000 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 mail
a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price and the number or kind or class of
shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b)
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<PAGE>
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) no such Right Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the person to whom such Right Certificate would be issued,
and (ii) no such Right Certificate shall be issued if, and to the extent
that, appropriate adjustments shall otherwise have been made in lieu of the
issuance thereof.
Section 23. REDEMPTION. (a) The Board of Directors of the Company may,
at its option, at any time prior to such time as a Person becomes an
Acquiring Person, redeem all but not less than all of the then outstanding
Rights at a redemption price of $.001 per Right, as such amount may be
appropriately adjusted, as determined by the Board of Directors, to reflect
any transaction of the kind described in clauses (A) through (D) of Section
11(a)(i) occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). In considering whether to
redeem the Rights, the Board of Directors of the Company may consider the
best long-term and short-term interests of the Company, including, without
limitation, the effects of the redemption of the Rights upon employees,
suppliers and customers of the Company or any Subsidiary of the Company and
communities in which offices or other establishments of the Company or any
Subsidiary of the Company are located and all other pertinent factors. The
redemption of the Rights by the Board of Directors may be effective at such
time, on such basis and with such conditions as such Board of Directors in
its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice to the Rights Agent and 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. 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 is Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 hereof, or in connection with the
purchase, acquisition or redemption of shares of Common Stock prior to the
Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Per Share Market Price of the
Common Stock as of the time of redemption) or any other form of consideration
deemed appropriate by the Board.
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Section 24. EXCHANGE. (a) The Board of Directors of the Company may, at
its option, at any time after any Person shall have become an Acquiring
Person, exchange all or any part of the then outstanding and exercisable
Rights (which shall not include Rights which have become void pursuant to the
provisions of Section 11(a)(ii)) for Common Stock at an exchange rate of one
share of Common Stock per Right, appropriately adjusted to reflect any
transaction specified in clauses (A) through (D), inclusive, of Section 11(a)
(i) occurring after the date hereof (such exchange rate being hereinafter
called the "Exchange Rate"); PROVIDED, HOWEVER, that the Board of Directors
shall not be empowered to effect such an exchange at any time after any
Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, shall have become the Beneficial Owner of 50% or
more of the Common Stock then outstanding.
(b) Immediately after any action by the Board of Directors of the
Company directing the exchange of any Rights pursuant to subsection (a) of
this Section 24, notice of which shall be filed with the Rights Agent, and
without any further action and without any notice, the right to exercise such
Rights shall terminate and each registered holder of such Rights shall
thereafter be entitled to receive only the number of shares of Common Stock
which shall equal the number of Rights held by such registered holder
multiplied by the Exchange Rate. The Company shall give prompt public notice
of any exchange directed pursuant to such subsection (a); PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect
the validity of such exchange. Within 10 days after action by such Board of
Directors directing the exchange of such Rights, the Company shall mail a
notice of exchange to all registered holders of such Rights at their last
addresses appearing upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not received by the registered holder to whom
sent; PROVIDED, HOWEVER, that the failure to give, or any defect in, any such
notice shall not affect the validity of any such exchange. Each such notice
shall state the method by which the exchange 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
among the registered holders of the Rights based upon the number of Rights
held (excluding Rights which have become void pursuant to the provisions of
Section 11(a)(ii)); and in such case, a new Rights Certificate evidencing the
Rights not being exchanged shall be prepared and executed by the Company and
countersigned and delivered by the Rights Agent to the registered holder of
such Rights subject to the provisions of Section 14.
(c) In the event that there shall be an insufficient number of shares
of Common Stock authorized but unissued or issued and held in the treasury of
the Company to permit an exchange of Rights directed by the Board of
Directors of the Company, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for issuance upon
such exchange of the Rights. In any such exchange, the Company may, at its
option, substitute Equivalent Common Stock for some or all of the Common
Stock otherwise exchangeable for the Rights.
(d) The Company shall not be required to issue fractional shares of
Common Stock in
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exchange for Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company shall pay to the registered holders of the Rights with respect to
which such fractional Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the Current Per Share Market value of
Common Stock (as determined as provided in Section 11(d)) for the Trading Day
immediately prior to the date of such exchange.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Common Stock or to make any
other distribution to the holders of Common Stock (other than a regular
periodic cash dividend out of earnings or retained earnings of the Company),
or (ii) to offer to the holders of Common Stock rights or warrants to
subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with, or
to effect any sale, mortgage or other transfer (or to permit one or more of
its Subsidiaries to effect any sale, mortgage or other transfer), in one
transaction or a series of related transactions, of 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to,
any other person (other than a Subsidiary of the Company in one or more
transactions each of which is not prohibited by Section 11(n) hereof), or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right Certificate,
in accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend,
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 Common Stock, if any such date is to
be fixed, and such notice shall be so given, in the case of any action
covered by clause (i) or (ii) above, at least ten (10) days prior to the
record date for determining holders of the shares of Common Stock for
purposes of such action, and in the case of any such other action, at least
ten (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 Common Stock,
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right 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. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the company shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
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Evergreen Resources, Inc.
1512 Larimer Street
Denver, CO 80202
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
Right 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 Securities Transfer & Trust, Inc.
938 Quail Street Suite 101
Lakewood, CO 80215
Notices or demands authorized by this Agreement to be given or made by the
company or the Rights Agent to the holder of any Right Certificate (or, prior
to the Distribution Date, to the holder of any certificate representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date,
the Company and the Rights Agent shall, if so directed by the Company,
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holder of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect, as determined solely by the
Company, the interests of the holders of the Rights or the Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person); PROVIDED, HOWEVER, that this Agreement may not be
supplemented or amended pursuant to clause (iii) of this sentence (A) to
lengthen any time period unless (1) approved by a majority of the
Disinterested Directors then in office and (2) such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, registered holders of the Rights, or (B) to lengthen any time
period relating to when the Rights may be redeemed if at such time the Rights
are not then redeemable. 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 thresholds set forth in Sections 1(a) and 3(a) to
not less than the greater of (i) the sum of .001% and the largest percentage
of the outstanding Common Shares then known by the Company to be Beneficially
Owned by any Person (other than an Exempt Person) and (ii) 10%. Upon the
delivery of such certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment.
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Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made on or after the Distribution Date which
changes the Redemption Price, the Final Expiration Date, the Exercise Price
or the number of shares (or portions thereof) of Common Stock for which a
Right is exercisable prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company (with, where specifically
provided for herein, the approval of a majority of the Disinterested Directors)
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board (with, where
specifically provided for herein, the approval of a majority of the
Disinterested Directors) or to the Company, or as may be necessary or advisable
in the administration of this Agreement, including without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors (or,
where specifically provided for herein, by a majority of the Disinterested
Directors) in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject any member of the Board of Directors or any of the Disinterested
Directors to any liability to the holders of the Rights or to any other person.
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 Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
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;
provided,
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<PAGE>
however, that notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of
the Company (including, if at the time of such determination, there is an
Acquiring Person, a majority of the Disinterested Directors then in office)
determines in its good faith judgment that severing the invalid language from
the Agreement would adversely affect the purpose or effect of the Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated
and shall not expire until the Close of Business on the tenth day following
the date of such determination by the Board of Directors.
Section 32. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Colorado 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 Colorado.
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ATTEST: EVERGREEN RESOURCES, INC.
By: /s/ J. Keither Martin By: /s/ Mark S. Sexton
--------------------------- ----------------------------------
J. Keither Martin Mark S. Sexton
Secretary President
ATTEST: AMERICAN SECURITIES TRANSFER
& TRUST, INC.
By: /s/ Lori Zimmerman By: /s/ Kathleen Heagerty
--------------------------- ----------------------------------
Lori Zimmerman Kathleen Heagerty
Assistant Secretary Operations Officer
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EXHIBIT A
[Form of Right Certificate]
Certificate No. R-_______________ ____________________ Rights
NOT EXERCISABLE AFTER JULY 22, 2007 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.] [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN SECTION 11(a) OF THE
RIGHTS AGREEMENT.]
RIGHT CERTIFICATE
Evergreen Resources, Inc.
This certifies that_________________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Shareholder Rights Agreement dated as of July 7, 1997 (the "Rights Agreement")
between Evergreen Resources, Inc. (the "Company"), and American Securities
Transfer & Trust, Inc. (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to the Close of Business on June 22, 2007, at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one fully paid and nonassessable share of common stock, no par
value per share (the "Common Stock"), of the Company, at an exercise price of
$42.50 per share (the "Exercise Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase and the related
Certificate duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above and the Exercise Price per share set forth above, are
the number and Exercise Price as of _______________ based on the Common Stock as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
Beneficially Owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Affiliate or Associate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
Person who, after
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such transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Right shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Common Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal offices of the
Company and the Rights Agent and are also available upon written request to the
Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption price of $.001 per Right (payable in cash, Common Stock
or other consideration deemed appropriate by the Board of Directors), or may be
exchanged, in whole or in part, for Common Stock.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder, as such, of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any
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corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in
the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _________, 19__.
ATTEST: Evergreen Resources, Inc.
By: By:
---------------------- -----------------------------------
Secretary President
Countersigned:
American Securities Transfer & Trust, Inc., as Rights Agent
- - ---------------------------
Operations Officer
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<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers unto
_____________ (please print name and address of transferee) this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ____________ Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: 19
------------- -- ------------------------------
Signature
Signature Guaranteed:
-----------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ______ are ________ are
not being transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did ____ did not ____ directly or indirectly acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: 19
------------- -- ------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights represented by the Right Certificate.)
To: Evergreen Resources, Inc.:
The undersigned hereby irrevocably elects to exercise Rights represented by
this Right Certificate to purchase the shares of Common Stock issuable upon the
exercise of the Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of:
- - ----------------------------------------------------------------
(Please print name and address)
- - ---------------------------------
(Please insert social security
or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
- - ----------------------------------------------------------------
(Please print name and address)
- - ----------------------------------
(Please insert social security
or other identifying number)
-----------------------------------
Signature
Signature Guaranteed:
-------------------------------
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<PAGE>
EXHIBIT B
EVERGREEN RESOURCES, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On July 7, 1997, the Board of Directors of Evergreen Resources, Inc.
(the "Company") declared a dividend distribution to stockholders of record at
the close of business on July 22, 1997 of one Common Stock Purchase Right for
each outstanding share of Company's Common Stock. Each Right entitles the
registered holder to purchase from the Company one share of Common Stock, no
par value per share (the "Common Stock"), at a cash exercise price of
$42.50), subject to adjustment. The description and terms of the Rights are
set forth in a Shareholder Rights Agreement between the Company and American
Securities Transfer & Trust, Inc., as Rights Agent.
Initially, the Rights will not be exercisable and will be attached to
all outstanding shares of Common Stock. No separate Right Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earliest of (i) 10 days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired Beneficial Ownership of 20% or
more of the outstanding shares of Common Stock (the date of said announcement
being referred to as the "Share Acquisition Date") and (ii) 10 business days
following the commencement (or the public announcement of the commencement)
of a tender offer or exchange offer that would result in a Person or group
owning 20% or more of the outstanding shares of Common Stock. Persons
currently beneficially owning more the 20% of the outstanding Common Stock
will not be considered an Acquiring Person unless such Person's ownership
interest increases to 30%.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (a) the Rights will be evidenced by the Common Stock certificates
and will be transferred with and only with such Common Stock certificates,
(b) new Common Stock certificates issued after July 22, 1997 will contain a
notation incorporating the Shareholder Rights Agreement by reference, and (c)
the surrender for transfer of any certificates for Common Stock will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on July 22, 2007, unless previously redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise determined
by the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
ln the event that a Person becomes an Acquiring Person, proper provision
will be made so
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<PAGE>
that each holder of a Right will thereafter have the right to receive upon
exercise thereof at the then current exercise price, that number of shares of
Common Stock (or in certain circumstances, cash, property, or other
securities of the Company) having a market value of two times such exercise
price. However, the Rights are not exercisable following the occurrence of
any of the events set forth above until such time as the Rights are no longer
redeemable as set forth below. Notwithstanding any of the foregoing, rights
that are or were Beneficially Owned by an Acquiring Person shall become null
and void.
In the event that, at any time following the Share Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
or (ii) 50% or more of the Company's assets or earning power is sold, each
holder of a Right shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a market value equal to two
times the exercise price of the Right.
At any time after any person becomes an Acquiring Person and prior to
such the time such Person, together with its Affiliates and Associates,
becomes the Beneficial Owner of 50% or more of the outstanding Common Stock,
the Board of Directors of the Company may exchange the Rights (other than
Rights which have become void), in whole or in part, at the exchange rate of
one share of Common Stock per Right, subject to adjustment as provided in the
Rights Agreement.
The exercise price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification of,
the Common Stock, (ii) if holders of the Common Stock are granted certain
rights or warrants to subscribe for Common Stock or securities convertible
into Common Stock at less than the current market price of the Common Stock,
or (iii) upon the distribution to holders of the Common Stock of evidence of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
No fractional shares of Common Stock will be issued and, in lieu
thereof, an adjustment, in cash will be made based on the fair market value
of the Common Stock on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of
$.001 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors) by the Board of Directors, at its
option, at any time prior to such time as a Person becomes an Acquiring
Person. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and thereafter the only
right of the holders of Rights will be to receive the redemption price.
Until a Right is exercised, the holder will have no rights as a
stockholder of the Company (beyond those as an existing stockholder),
including the right to vote or to receive dividends. While
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<PAGE>
the distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of an
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement, other than those
relating to the principal economic terms of the Rights, may be amended by the
Board to cure any ambiguity, defect or inconsistency, to make changes which
do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement. Amendments adjusting time periods may, under
certain circumstances, require the approval of a majority of Disinterested
Directors, or otherwise be limited.
A copy of the Shareholder Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form
8-K. A copy of the Shareholder Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Shareholder
Rights Agreement.
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