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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20569
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
HORNBECK OFFSHORE SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 74-2153030
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(State of Incorporation) (IRS Employer ID No.)
7707 Harborside Drive, Galveston, Texas 77554
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None None
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box:
If this Form relates to the registration of a class of debt securities and is
to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box:
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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(Title of Class)
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Item 1. Description of Securities to be Registered
On June 20, 1995, the Board of Directors of Hornbeck Offshore
Services, Inc. (the "Company") declared a dividend on each outstanding share of
common stock, par value $.10 per share (the "Common Stock"), of the Company of
one right to purchase (individually a "Right" and collectively the "Rights")
Series B Junior Participating Preferred Stock, par value $1.00 per share (the
"Preferred Stock"). The dividend is payable to stockholders of record July 5,
1995 (the "Record Date"). Each Right will, upon the occurrence of events,
described below, that make it exercisable, entitle the registered holder to
purchase from the Company one one- hundredth of one share of the Preferred
Stock at a price of $60.00 (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated
as of June 20, 1995 (the "Rights Agreement"), between the Company and First
Interstate Bank of Texas, N.A., as the rights agent (the "Rights Agent").
Initially, the Rights will be represented by all certificates
representing outstanding shares of Common Stock and no separate certificates
for the Rights will be distributed. Until the Distribution Date (as defined
below) or earlier redemption, exchange, expiration or termination of the
Rights, (a) new certificates representing shares of Common Stock issued after
the Record Date will contain a legend incorporating the Rights Agreement by
reference and (b) the surrender for transfer of any certificates representing
shares of Common Stock outstanding as of the Record Date will constitute the
surrender for transfer of the Rights associated with the shares of Common Stock
represented by such certificate.
The Rights will separate from the Common Stock on the
Distribution Date, which is defined in the Rights Agreement as the earlier of
(i) the tenth business day following the date of 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 Company's Common Stock
(the date of the announcement of such acquisition being the "Stock Acquisition
Date"), or (ii) the tenth business day (or such later date as may be
determined by the Board of Directors before the Distribution Date occurs)
following the commencement or public announcement of a tender or exchange
offer that would, if consummated, result in a person becoming an Acquiring
Person, whether any purchases actually occur pursuant to such offer or not.
The definition of Acquiring Person under the Rights Agreement excludes (A) the
Company, (B) any subsidiary of the Company, (C) any employee benefit plan or
employee stock plan of the Company or of any subsidiary of the Company or any
person organized, appointed, established, or holding Common Stock for or
pursuant to the terms of any such plan or (D) any person whose ownership of
20% or more of the Common Stock of the Company then outstanding results solely
from (i) any action or transaction approved by the Board of Directors before
such person acquires such 20% beneficial ownership or (ii) a reduction in the
number of issued and outstanding shares of Common Stock pursuant to a
transaction or transactions approved by the Board of Directors. Any person
excluded from becoming an Acquiring Person by reason of clause (i) or (ii)
above will nevertheless become an Acquiring Person if it acquires any
additional shares of Common Stock, unless such acquisition of additional
shares of Common Stock occurs by reason of a transaction falling within the
scope of such clause (i) or (ii). As
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soon as practicable following the Distribution Date, the Rights will separate
from the Common Stock, and separate certificates evidencing the Rights will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date. From and after the Distribution Date, such separate
certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on June 20, 2005, unless earlier redeemed,
exchanged or terminated by the Company, in each case as described below.
If a person becomes an Acquiring Person (a "Flip-In Event") in
a manner other than pursuant to a tender or exchange offer for all outstanding
shares of Common Stock at a price and on terms that a majority of the
Continuing Directors (as defined in the Rights Agreement) determines to be fair
to and otherwise in the best interests of the Company and its stockholders (a
"Permitted Offer"), each holder of a Right will thereafter have the right to
receive, upon exercise of such Right and payment of the Purchase Price, that
number of shares of Preferred Stock (or, in certain circumstances, Common
Stock, cash, property or other securities of the Company) having a Current
Market Price (as defined in the Rights Agreement) equal to two times the
exercise price of the Right. Notwithstanding the foregoing, following the
occurrence of any Flip-In Event, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person (or by certain related parties) will be null and void in
the circumstances set forth in the Rights Agreement. Rights do not become
exercisable following the occurrence of a Flip-In Event until they are no
longer redeemable by the Company, as set forth below.
If, at any time on or after the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
(other than certain mergers that follow a Permitted Offer), or (ii) 50% or more
of the assets or earning power of the Company and its subsidiaries (taken as a
whole) is sold or transferred in one or a series of related transactions (each
of the events described in (i) and (ii) above being a "Flip-Over Event"), each
holder of a Right (except Rights that previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, a number of
shares of common stock of the acquiring company having a Current Market Price
equal to two times the exercise price of the Right.
The Purchase Price payable and the number of shares of
Preferred Stock or other securities, including without limitation Common Stock,
or property issuable upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) upon
the grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for or purchase at less than the Current Market Price shares of
Preferred Stock or securities convertible into Preferred Stock or (iii) upon
the distribution to holders of Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends) or of subscription rights or
warrants (other than those referred to above).
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The number of outstanding Rights is also subject to certain
adjustments from time to time in the event of, among other things, a stock
split of the Common Stock or a stock dividend on the Common Stock payable in
shares of Common Stock or subdivisions, consolidations or combinations of the
Common Stock occurring, in any such case, before the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. Fractions of shares of Preferred Stock (other than integral
multiples of one one-hundredth of a share) which would otherwise be issued upon
exercise or redemption of the Rights may, at the election of the Company, be
evidenced by depositary receipts. The Rights Agreement also provides that the
Company may pay cash in lieu of fractional shares.
At any time on or before the close of business on the tenth
business day following a Stock Acquisition Date (or such later date as may be
authorized by the Board of Directors and a majority of the Continuing
Directors), the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"), payable at the election of
the Company in cash or shares of Common Stock. The Rights may be redeemed
after the time that any person has become an Acquiring Person only if such
redemption is approved by a majority of the Continuing Directors. Immediately
upon the action of the Board of Directors of the Company authorizing redemption
of the Rights and without any further action or notice, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price.
After the occurrence of a Flip-In Event and before a person
becomes the beneficial owner of 50% or more of the Common Stock then
outstanding, the Company may, if authorized by the Board of Directors, such
authorization having been approved by a majority of the Continuing Directors,
exchange the Rights (other than Rights owned by an Acquiring Person or an
affiliate or an associate of an Acquiring Person, which will have become void),
in whole or in part, at an exchange ratio per Right of one share of Common
Stock, and/or other equity securities deemed to have the same value as one
share of Common Stock subject to adjustment.
During any such time as the Rights are redeemable, the Company
may amend the Rights in any manner, including without limitation an amendment
to extend the time period during which the Rights may be redeemed, except that
the Company may not, during such time, amend the Rights to decrease the
Redemption Price or move forward the expiration date of the Rights. During any
such time as the Rights are not redeemable, the Company may amend the Rights
Agreement (a) to cure any ambiguity, defect, or inconsistency, (b) to make
changes that do not materially adversely affect the interests of holders of
Rights (excluding the interests of any Acquiring Person) or (c) to shorten or
lengthen any time period under the Rights Agreement, except that the Company
may not amend the Rights Agreement to lengthen the time period governing
redemption during any such time as the Rights are not redeemable. Amendments
to the Rights Agreement from and after the time that any person or other entity
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becomes an Acquiring Person require that at least two Continuing Directors be
then in office and a majority of the Continuing Directors approve such
amendment.
Until a Right is exercised, the holder thereof, as such, will
not have any rights as a stockholder of the Company, including without
limitation rights to vote or receive dividends.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group who attempts to acquire
the Company without the approval of the Company's Board of Directors. As a
result, the overall effect of the Rights may be to render more difficult or
discourage any attempt to acquire the Company even if such acquisition may be
favorable to the interests of the Company's stockholders. Because the
Company's Board of Directors can redeem the Rights or approve a Permitted
Offer, the Rights should not interfere with any merger or other business
combination approved by the Company's Board of Directors.
Because of the method of operation and financing of certain
vessels owned or to be owned by the Company, the Shipping Act, 1916, and the
Merchant Marine Act, 1936, require that the Company limit the ownership of its
capital stock by persons other than citizens of the United States, within the
meaning of such Acts. In accordance with such Acts, the Company's Restated
Certificate of Incorporation contains, among other things, restrictions on
transfers of its capital stock to, and the voting of its capital stock by,
persons other than citizens of the United States. Similarly, the Rights
Agreement generally provides that no Right may be exercised if the Company
determines (prior to the issuance of the Preferred Stock (or other securities
or property) issuable upon exercise of such Right) that (i) (A) the Preferred
Stock (or other securities or property) issuable upon exercise of such Right,
or any interest therein or right thereof, would be owned or controlled by
persons other than United States citizens and (B) after any such exercise,
persons other than United States citizens would own or control an aggregate
percentage of the shares of capital stock of the Company or any interest
therein or right thereof in excess of the Permitted Percentage (as defined in
the Restated Certificate of Incorporation of the Company) or (ii) that the
exercise of such Right would otherwise cause the Company not to be a citizen of
the United States within the meaning of the Shipping Act, 1916.
The form of Rights Agreement between the Company and the
Rights Agent specifying the terms of the Rights, which includes as Exhibit A
the Certificate of Designations of the Preferred Stock specifying the terms of
the Preferred Stock, as Exhibit B the form of Right Certificate, and as Exhibit
C the form of Summary of Rights to Purchase Stock, is attached hereto as
Exhibit 1 and is incorporated herein by reference. The foregoing description
of the Rights does not purport to be complete and is qualified by reference to
such Exhibits, which are incorporated herein by reference.
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Item 2. Exhibits.
4.1 Rights Agreement dated as of June 20, 1995 between
Hornbeck Offshore Services, Inc. and First Interstate
Bank of Texas, N.A., as Rights Agent, which includes
as Exhibit A the Certificate of Designations of the
Series B Junior Participating Preferred Stock, as
Exhibit B the form of Right Certificate, and as
Exhibit C the form of Summary of Rights to Purchase
Stock.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: June 21, 1995
HORNBECK OFFSHORE SERVICES, INC.
By: /s/ ROBERT W. HAMPTON
----------------------------------
Name: Robert W. Hampton
Title: Vice President, Treasurer
and Chief Financial Officer
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Index to Exhibits
Item 2. Exhibits.
4.1 Rights Agreement dated as of June 20, 1995 between
Hornbeck Offshore Services, Inc. and First Interstate
Bank of Texas, N.A., as Rights Agent, which includes
as Exhibit A the Certificate of Designations of the
Series B Junior Participating Preferred Stock, as
Exhibit B the form of Right Certificate, and as
Exhibit C the form of Summary of Rights to Purchase
Stock.
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Hornbeck Offshore Services, Inc.
and
First Interstate Bank of Texas, N.A.
as Rights Agent
____________
Rights Agreement
Dated as of June 20, 1995
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . 10
Section 3. Issuance of Right Certificates . . . . . . . . . . . . . . 10
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . 12
Section 5. Countersignature and Registration . . . . . . . . . . . . 13
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8. Cancellation and Destruction of Right Certificates . . . . 20
Section 9. Reservation and Availability of Preferred Stock . . . . . 20
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . 23
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
and Number of Rights . . . . . . . . . . . . . . . . . . . 23
Section 12. Certification of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . . 38
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . 45
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . 47
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . 48
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . 49
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . 49
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 50
</TABLE>
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<TABLE>
<S> <C> <C>
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . 51
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . 54
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . 56
Section 23. Redemption and Termination . . . . . . . . . . . . . . . . 56
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . 61
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . 64
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 29. Determinations and Actions by the Board of Directors, etc 65
Section 30. Benefits of this Rights Agreement . . . . . . . . . . . . 66
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . 66
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . 67
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 67
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . 67
Exhibit A - Form of Certificate of Designations of Series B Junior
Participating Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
</TABLE>
-ii-
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RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of June 20, 1995, by and between
Hornbeck Offshore Services, Inc., a Delaware corporation (the "Company"), and
First Interstate Bank of Texas, N.A., a national banking association (the
"Rights Agent").
The Board of Directors of the Company authorized and declared a
dividend of one right (a "Right") for each share of Common Stock (as
hereinafter defined) of the Company outstanding as of the close of business on
June 20, 1995 (the "Record Date"), each such Right representing the right to
purchase one one-hundredth (subject to adjustment) of one share of Preferred
Stock (as hereinafter defined), upon the terms and subject to the conditions
hereinafter set forth, and has further authorized and directed the issuance of
one Right with respect to each share of Common Stock that shall become
outstanding between the Record Date and the earliest of the Distribution Date
and the Expiration Date (as such terms are hereinafter defined).
Accordingly, 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 shall have the meanings indicated:
"Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 20% or more of the
shares of the Common Stock of the Company then outstanding, but shall not
include (i) any Exempt Person (as hereinafter defined) or (ii) any Person who
or which, together with all Affiliates and Associates of such Person, would be
an Acquiring Person solely by reason of
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(A) being the Beneficial Owner of shares of Common Stock, the Beneficial
Ownership of which was acquired by such Person pursuant to any action or
transaction or series of related actions or transactions approved by the Board
of Directors (provided that at the time of such approval of the Board of
Directors there are then in office not less than two Continuing Directors (as
such term is hereinafter defined) and such action or transaction or series of
related actions or transactions are approved by a majority of the Continuing
Directors then in office) before such Person otherwise became an Acquiring
Person or (B) a reduction in the number of issued and outstanding shares of
Common Stock pursuant to a transaction or a series of related transactions
approved by the Board of Directors (provided that at the time of such approval
of the Board of Directors there are then in office not less than two
Continuing Directors and such transaction or series of related transactions
are approved by a majority of the Continuing Directors then in office);
provided, however, that if a Person shall become the Beneficial Owner of 20%
or more of the shares of Common Stock of the Company then outstanding by
reason of subclause (A) or (B) of clause (ii) above and shall thereafter
become the Beneficial Owner of any additional shares of the Common Stock of
the Company, then such Person shall be deemed to be an "Acquiring Person"
unless upon consummation of the acquisition of such additional shares such
Person does not own 20% or more of the Common Stock then outstanding.
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" became such inadvertently (including, without limitation, because (i)
such Person was unaware that it beneficially owned a percentage of Common
Stock that would otherwise cause such Person to be an "Acquiring Person" or
(ii) such Person was aware of the extent of its Beneficial Ownership of Common
Stock but had no actual
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knowledge of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, and if such Person as promptly as practicable divested or divests
itself of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would no longer be an "Acquiring Person," then such
Person shall not be deemed to be or to have become an "Acquiring Person" for
any purposes of this Agreement.
"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 Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" and shall be deemed to have "Beneficial
Ownership" of, any securities:
(i) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, is the "beneficial owner" of
(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
Rights Agreement) or otherwise has the right to vote or dispose of,
including pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (i) as a result of any
agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (A) arises solely
from a revocable proxy or consent given in response to a proxy or
consent solicitation made pursuant to, and in accordance
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with, the applicable provisions of the General Rules and Regulations
under the Exchange Act and (B) is not then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report);
(ii) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right or obligation
to acquire (whether such right or obligation is exercisable or
effective immediately or only after the passage of time or the
occurrence of an event or both) pursuant to any agreement,
arrangement, or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, other rights,
warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," (A) securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event; or
(iii) that 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 as set forth in the proviso to subparagraph (i) of
this definition) or disposing of any voting securities of the
Company;
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provided, however, that nothing in this definition shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
"Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of Texas are authorized or
obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M., Houston,
Texas time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., Houston, Texas time, on the next
succeeding Business Day.
"Closing Price" of a security for any day shall mean the last sales
price, regular way, on such day or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, on such
day, in either case as reported in the principal transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange, or, if such security is not listed or admitted to trading on the New
York Stock Exchange, on the principal national securities exchange on which
such security is listed or admitted to trading, or, if such security is not
listed or admitted to trading on any national securities exchange but sales
price information is reported for such security, the last quoted sales price
as reported by Nasdaq or such other self-regulatory organization or registered
securities information processor (as such terms are used under the Exchange
Act) that then reports information concerning such security, or, if sales
price information is not so reported, the average of the high bid and low
asked prices in the over-the-counter market on such day, as
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reported by Nasdaq or such other entity, or, if on such day such security is
not quoted by any such entity, 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 such day no market
maker is making a market in such security, the fair value of such security on
such day as determined in good faith by the Board of Directors of the Company
shall be used.
"Common Stock" when used with reference to the Company shall mean
the shares of the Company's common stock, $.10 par value per share. "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 Person or, if such other person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.
"Continuing Director" shall mean any member of the Board of
Directors, while such person is a member of the Board of Directors, who is not
an Acquiring Person, or a nominee, representative, Affiliate or Associate of
an Acquiring Person, and who either (i) was a member of the Board of Directors
prior to the time that any Person became an Acquiring Person (other than
pursuant to a Permitted Offer) or (ii) subsequently became a member of the
Board of Directors, and whose nomination for election or election to the Board
of Directors was recommended or approved by a majority of the Continuing
Directors then on the Board of Directors.
"Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
"Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth Business Day (or, if such Stock Acquisition Date results
from the consummation of a Permitted
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Offer, such later date as may be determined by the Company's Board of
Directors before the Distribution Date occurs) after the Stock Acquisition
Date or (ii) the Close of Business on the tenth Business Day (or such later
date as may be determined by the Company's Board of Directors before the
Distribution Date occurs) after the date that a tender offer or exchange offer
by any Person (other than any Exempt Person) is first published or sent or
given within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof, such Person would be an
Acquiring Person. The Board of Directors of the Company may, to the extent
set forth in the preceding sentence, defer the date set forth in clause (i) or
(ii) of the preceding sentence to a specified later date or to an unspecified
later date to be determined by a subsequent action or event.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
"Exempt Person" shall mean the Company, any Subsidiary of the
Company, any employee benefit plan or employee stock plan of the Company or of
any Subsidiary of the Company, and any Person organized, appointed,
established or holding Common Stock for or pursuant to the terms of any such
plan.
"Expiration Date" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, (iii) the time at which the Rights expire pursuant to
Section 13(d) hereof and (iv) the time at which all Rights then outstanding
and exercisable are exchanged pursuant to Section 24 hereof.
"Final Expiration Date" shall mean the close of business on June 20,
2005.
"Flip-In Event" shall mean an event described in Section 11(a)(ii)
hereof.
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<PAGE> 11
"Flip-Over Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a) hereof.
"Nasdaq" shall mean The Nasdaq Stock Market.
"Permitted Offer" shall mean a tender offer or an exchange offer for
all outstanding Common Stock at a price and on terms determined by at least a
majority of the members of the Board of Directors (provided that at the time
of such approval of the Board of Directors there are then in office not less
than two Continuing Directors and such offer is approved by a majority of the
Continuing Directors then in office), after receiving advice from one or more
investment banking firms, to be (a) at a price and on terms that are fair to
stockholders (taking into account all factors that such members of the Board
deem relevant including, without limitation, prices that could reasonably be
achieved if the Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best interests of the
Company and its stockholders.
"Person" shall mean any individual, firm, corporation, partnership,
association, trust or other entity, and shall include any successor (by merger
or otherwise) of such entity.
"Preferred Stock" shall mean the Series B Junior Participating
Preferred Stock, par value $1.00 per share, of the Company, having the rights,
powers and preferences set forth in the Form of Certificate of Designations
attached to this Rights Agreement as Exhibit "A" and, to the extent that there
is not a sufficient number of shares of Series B Junior Participating
Preferred Stock authorized to permit the full exercise of the Rights, any
other series of preferred stock, par value $1.00 per share, of the Company
designated for such purpose containing terms substantially similar to the
terms of the Series B Junior Participating Preferred Stock.
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<PAGE> 12
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Sections 4 and
7(b) hereof.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such or such earlier date as a majority of the Board of Directors
shall become aware of the existence of an Acquiring Person.
"Subsidiary" of a Person shall mean any corporation or other entity
of which securities or other ownership interests having voting power
sufficient to elect a majority of the Board of Directors or other persons
performing similar functions are beneficially owned, directly or indirectly,
by such Person or by any corporation or other entity that is otherwise
controlled by such Person.
"Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
"Trading Day" with respect to a security 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 but is quoted by Nasdaq, a day on which Nasdaq reports trades, or, if
such security is not so quoted, a Business Day.
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<PAGE> 13
"Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or regulatory
authority in respect of any transfer of any security, instrument or right,
including Rights, Preferred Stock or Common Stock.
"Triggering Event" shall mean any Flip-In Event or any Flip-Over
Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issuance of Right Certificates.
(a) Until the Distribution Date, (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Stock registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of the underlying
shares of Common Stock. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured postage-prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date,
at the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit "B" hereto (a "Right
Certificate"), evidencing one Right (subject to adjustment as provided herein)
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<PAGE> 14
for each share of Common Stock so held. As of and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, for
informational purposes, the Company will send a copy of a Summary of Rights to
Purchase Stock, in substantially the form of Exhibit "C" hereto (the "Summary
of Rights"), by first-class, postage-prepaid mail, to each record holder of
Common Stock as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates
for Common Stock outstanding as of the Record Date, until the earlier of the
Distribution Date or the Expiration Date, the Rights will be evidenced by such
Common Stock certificates registered in the names of the holders thereof.
Until the earlier of the Distribution Date or the Expiration Date, the
surrender for transfer of any certificate for Common Stock outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Stock represented thereby.
(c) Certificates issued for Common Stock which becomes outstanding
(including, without limitation, upon the transfer or exchange of outstanding
Common Stock, Common Stock originally issued or delivered from the Company's
treasury or reacquired Common Stock referred to in the last sentence of this
paragraph (c)) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
Hornbeck Offshore Services, Inc. (the "Company") and First
Interstate Bank of Texas, N.A. (the "Rights Agent"), dated as
of June 20, 1995, as it may from time to
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<PAGE> 15
time be supplemented or amended (the "Rights Agreement"),
the terms of which are incorporated herein by reference
and a copy of which is on file at the Company's principal
executive offices. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be
redeemed, may be exchanged, may expire or may be evidenced
by separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the
registered holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written
request therefor. As described in the Rights Agreement,
Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) whether
currently held by or on behalf of such Person or by any
subsequent holder will become null and void and may not be
transferred to any Person.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the expiration or redemption of
the Rights, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and surrender for
transfer of any such certificates shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby. In the
event that the Company purchases or acquires any Common Stock after the Record
Date but prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed cancelled and 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. The Right Certificates (and
the forms of election to purchase and assignment to be printed on the reverse
thereof), shall be substantially in the form set forth in Exhibit "B" hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Rights Agreement, or
as may be required to comply with any applicable law or with any rule or
regulation made
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<PAGE> 16
pursuant thereto or with any rule or regulation of any stock exchange or
interdealer quotation system on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Sections 11, 13
and 22 hereof, Right Certificates shall entitle the holders thereof to
purchase such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price per such one one-hundredth of a share
of Preferred Stock set forth therein (the "Purchase Price"), but the number of
such shares of Preferred Stock and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President, or any of its Vice
Presidents, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested to by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned by the
Rights Agent either manually or by facsimile signature and shall not be valid
for any purpose unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may 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
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<PAGE> 17
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 its principal office or one or more offices designated as
the appropriate place for surrender of Right Certificates upon exercise or
transfer, and in such other locations as may be required by law, 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 Sections 7(e), 7(f), 7(g), 14 and
24 hereof, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the Expiration Date, any Right
Certificate or Right Certificates may be transferred or split up, combined or
exchanged for one or more other Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a share of Preferred
Stock (or, following a Triggering Event, Common Stock, other securities, cash
or other assets, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Right Certificate shall surrender
the Right Certificate at the principal office of the Rights Agent with the
form of certificate and assignment on the reverse side thereof duly endorsed
(or enclose with such Right Certificate a written instrument of transfer in
form satisfactory to the Company and the Rights Agent), duly
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<PAGE> 18
executed by the registered holder thereof or his attorney duly authorized in
writing, and with such signature duly guaranteed. Any registered holder
desiring to split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent
and shall surrender the Right Certificate or Right Certificates to be split
up, combined or exchanged at the principal office of the Rights Agent.
Thereupon, the Rights Agent shall, subject to the provisions hereof,
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any Transfer Tax that may be
imposed in connection with any transfer, split up, combination or exchange of
any Right Certificates.
(b) Subject to the provisions of Section 7(e) hereof, at any time
after the Distribution Date and prior to the Expiration Date, upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will issue and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Except as otherwise provided herein, the registered holder of
any Right Certificate may exercise the Rights evidenced thereby 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
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<PAGE> 19
and the certificate on the reverse side thereof duly executed (with signatures
duly guaranteed), to the Rights Agent at the principal office of the Rights
Agent, together with payment of the Purchase Price for each one one-hundredth
of a share of Preferred Stock (or other securities, cash or other assets, as
the case may be) as to which the surrendered Rights are then being exercised,
at or prior to the Expiration Date.
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock issued pursuant to the exercise of a Right shall initially be
$60.00, shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America, in accordance with paragraph 7(c) below.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the application for purchase duly executed, accompanied by
payment of the aggregate Purchase Price applicable to the number of one one-
hundredths of a share of Preferred Stock (or other securities, cash or other
assets, as the case may be) to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof in cash or by certified check,
cashier's check, bank draft or money order payable to the order of the Company
or the Rights Agent, the Rights Agent shall, subject to Section 20(j) hereof,
thereupon promptly (i)(A) requisition from any transfer agent of the Preferred
Stock certificate(s) representing the total number of one one-hundredths of a
share of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of one one-hundredths
of a share of Preferred Stock issuable upon exercise of the Rights hereunder
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<PAGE> 20
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) as provided in Section
14(b), at the election of the Company, cause depositary receipts to be issued
in lieu of fractional shares of Preferred Stock, (iii) if the election
provided for in the immediately preceding clause (ii) has not been made,
requisition from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares of Preferred Stock in accordance with Section
14(b) hereof, (iv) after receipt of such certificates and/or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder, and (v) when appropriate, after receipt
thereof, deliver such cash to or upon the order of the registered holder of
such Right Certificate; provided, however, that in the case of a purchase of
securities, other than shares of Preferred Stock, pursuant to Section 13
hereof, the Rights Agent shall promptly take the appropriate actions
corresponding in such case to that referred to in the foregoing clauses (i)
through (v) of this Section 7(c). Notwithstanding the foregoing provisions of
this Section 7(c), the Company may suspend the issuance of shares of Preferred
Stock or other securities upon exercise of a Right for a reasonable period,
not in excess of 90 days, during which the Company seeks to register under the
Securities Act and any applicable securities law of any other jurisdiction,
the shares of Preferred Stock or such other securities to be issued pursuant
to the Rights; provided, however, that nothing contained in this Section 7(c)
shall relieve the Company of its obligations under Section 9(c) hereof.
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<PAGE> 21
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the
exercisable Rights remaining unexercised shall be issued by the Rights Agent
to the registered holder of such Right Certificate or his duly authorized
assign, subject to the provisions of Section 14 hereof.
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the first occurrence of a Flip-In Event, any Rights
that are beneficially owned by (i) an Acquiring Person (or an Associate or
Affiliate of an Acquiring Person), (ii) a direct or indirect transferee of
such Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a direct or
indirect transferee of such Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person's 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 such Affiliate or
Associate) or to any Person with whom such Acquiring Person (or such Affiliate
or Associate) has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board of Directors
has determined is part of a plan, arrangement or understanding that has as a
primary purpose or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Rights Agreement or otherwise. The Company shall use all
reasonable effort to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or any other Person
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<PAGE> 22
as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder. No
Right Certificate shall be issued pursuant to Section 3 hereof that represents
Rights beneficially owned by an Acquiring Person (or any Associate or
Affiliate thereof) and no Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person (or any Associate or
Affiliate thereof) or to any nominee of such Acquiring Person, Associate or
Affiliate. Any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person (or any Associate or Affiliate thereof) shall be
canceled.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the 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.
(g) Notwithstanding anything in this Rights Agreement to the
contrary, no Right may be exercised (and any attempt to so exercise shall be
void and of no effect) if the Company determines (prior to the issuance of the
Preferred Stock (or other securities or property) issuable upon exercise of
such Right) that (i) (A) the Preferred Stock (or other securities or property)
issuable upon exercise of such Right, or any interest therein or right
thereof, would be owned or controlled by one or more Aliens (as defined in the
Restated Certificate of Incorporation of
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<PAGE> 23
the Company) and (B) after any such exercise, Aliens would own or control an
aggregate percentage of the shares of capital stock of the Company or any
interest therein or right thereof in excess of the Permitted Percentage (as
defined in the Restated Certificate of Incorporation of the Company) or (ii)
that the exercise of such Right would otherwise cause the Company not to be a
citizen of the United States within the meaning of the Shipping Act, 1916.
The Board of Directors is hereby authorized to take such action as it may deem
necessary or desirable to fulfill the purpose and implement the provisions set
forth in the immediately preceding sentence, including without limitation,
requiring, as a condition to exercise of any Right, representations and other
proof as to the identity of prospective stockholders and persons on whose
behalf shares of stock of the Company or any interest therein or right thereof
are to be held and as to whether or not such persons are Aliens.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in 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 Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other 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.
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<PAGE> 24
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or any shares of Preferred Stock held in its treasury, a
number of shares of Preferred Stock as will from time to time be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange, or quoted on Nasdaq, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange, or quoted on Nasdaq, upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to (i) prepare and file,
as soon as practicable following the first occurrence of a Flip-In Event, a
registration statement on an appropriate form under the Securities Act with
respect to the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable after
such filing and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company
will also take such action as may be appropriate under or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection
with the exercise of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 90 days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the
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<PAGE> 25
exercisability of the Rights in order to prepare and file a registration
statement and permit it to become effective. In addition, if the Company
shall determine that the Securities Act requires an effective registration
statement under the Securities Act following the Distribution Date, the
Company may temporarily suspend the exercisability of the Rights until such
time as such a registration statement has been declared effective. Upon any
such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or any required registration statement shall
not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery
of the certificates therefor (subject to payment of the Purchase Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any Transfer Tax which may be payable with respect to the
issuance or delivery of the Right Certificates and of any certificates for a
number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any Transfer Tax which may be
payable in respect of any transfer or delivery of a Right Certificate to a
person
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other than, or the issuance or delivery of certificates or depositary receipts
for the Preferred Stock (or Common Stock and/or other securities, as the case
may be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of any
Rights until any such Transfer Tax shall have been paid (any such Transfer 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 Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name
any certificate for Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares (fractional or otherwise) of Preferred Stock represented thereby on,
and such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable Transfer Taxes) was made; provided, however, that, if the
date of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares (fractional or otherwise) of Preferred
Stock on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, shall not be entitled to any rights of a holder of
shares of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or
other
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<PAGE> 27
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
and Number of Rights. The Purchase Price, the number and kind of shares or
other securities subject to purchase upon the exercise of 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 Preferred Stock payable in shares
of Preferred Stock, (B) subdivide or split the outstanding Preferred Stock
into a greater number of shares of Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or the effective date
of such subdivision, combination or reclassification, and the number and kind
of shares of capital stock issuable upon exercise of a Right on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the Purchase
Price then in effect, the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at
a time when the Preferred Stock transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
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exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Sections 23(a) and 24 of this Rights Agreement and
except as otherwise provided in this Section 11, in the event that any Person
shall become an Acquiring Person (the first occurrence of such event being
referred to herein as a "Flip-In Event"), unless the event causing such Person
to become an Acquiring Person is (1) a transaction set forth in Section 13(a)
hereof or (2) an acquisition of shares of Common Stock pursuant to a Permitted
Offer, then, promptly following the occurrence of such event, (A) the Purchase
Price shall be adjusted to be the Purchase Price in effect immediately prior
to the Flip-In Event multiplied by the number of one one-hundredths of a share
of Preferred Stock for which a Right was exercisable immediately prior to such
Flip-In Event, whether or not such Right was then exercisable, and (B) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive upon exercise thereof at a price equal to the then
current Purchase Price (as so adjusted), in accordance with the terms of this
Rights Agreement and in lieu of a number of one one-hundredths of a share of
Preferred Stock, such number of shares of Common Stock of the Company as shall
equal the result obtained by dividing the Purchase Price (as so adjusted) by
50% of the Current Market Price per share of Common Stock on the date such
Person became an Acquiring Person (such number of shares being referred to
herein as the "Adjustment Shares"); provided, however, that the Purchase Price
(as so adjusted) and
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the number of Adjustment Shares so receivable upon exercise of a Right shall
following the date such Person became an Acquiring Person be subject to
further adjustment as appropriate in accordance with Section 11(f) of this
Rights Agreement to reflect any events occurring after the date of such first
occurrence.
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon exercise of Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a) such number or fractions of shares of
Preferred Stock having an aggregate current market value equal to the Current
Market Price per share of Common Stock. In the event that the number of
shares of Common Stock that are authorized by the Company's Restated
Certificate of Incorporation 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 the foregoing
subparagraph (ii) of this Section 11(a), the Company shall, to the extent
permitted by applicable law and regulation and material agreements then in
effect to which the Company is a party, (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right (computed
using the Current Market Price used to determine the number of Adjustment
Shares) (the "Current Value") over (2) the Purchase Price, as adjusted in
accordance with the foregoing subparagraph (ii) (such excess is herein
referred to as the "Spread"), and (B) with respect to each Right (other than
Rights which have become void under this Agreement), make adequate provision
to substitute for the Adjustment Shares, upon the exercise of the Rights and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) shares of Preferred Stock or other equity securities of
the Company (including, without limitation, shares or fractions of shares, or
units of shares, of preferred stock
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that the Board of Directors of the Company has determined to have the same
value as shares of Common Stock (such shares of preferred stock and shares or
fractions of shares of preferred stock are herein referred to as "Share
Equivalents")), (4) debt securities of the Company, (5) other assets or
(6) any combination of the foregoing, having a value which when added to the
value of the shares of Common Stock actually issued upon exercise of such
Right, shall have an aggregate value equal to the Current Value (less the
amount of any reduction in such Purchase Price), where such aggregate value
has been determined by the Board of Directors of the Company based upon the
advice of a nationally or industry recognized investment banking firm selected
by the Board of Directors of the Company; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to clause (B)
above within 30 days following the later of (x) the first occurrence of a
Flip-In Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Flip-In Trigger Date"), then the Company shall be obligated to
deliver, to the extent permitted by applicable law and any material agreements
then in effect to which the Company is a party, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then, if necessary, such
number or fractions of shares of Preferred Stock (to the extent available) and
then, if necessary, cash, which shares of Preferred Stock and/or cash have an
aggregate value equal to the Spread. If, upon the occurrence of a Flip-in
Event, the Board of Directors of the Company 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 30-day period
set forth above may be extended to the extent necessary, but not more than 90
days after
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the Flip-In Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period, as it
may be extended, the "Substitution Period"). To the extent that the Company
determines that some action need to be taken pursuant to the second and/or
third sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization
of additional shares and/or to decide the appropriate form of distribution to
be made pursuant to such second sentence and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price per share of
the Common Stock on the Flip-In Trigger Date and the value of any Share
Equivalent shall be deemed to have the same value as the Common Stock on such
date. The Board of Directors of the Company may, but shall not be required
to, establish procedures to allocate the right to receive Common Stock upon
the exercise of the Rights among holders of Rights pursuant to this Section
11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("equivalent preferred
shares")) or securities convertible into Preferred Stock or equivalent
preferred shares at a price
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per share of Preferred Stock or equivalent preferred shares (or having a
conversion price per share, if a security convertible into shares of Preferred
Stock or equivalent preferred shares) less than the Current Market Price per
share of the Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock and
equivalent preferred shares outstanding on such record date plus the number of
shares of Preferred Stock and equivalent preferred shares which the aggregate
offering price of the total number of shares of Preferred Stock and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be
the number of shares of Preferred Stock and equivalent preferred shares
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Shares of Preferred Stock and
equivalent preferred shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made
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successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash or other assets (other than a regular quarterly cash
dividend not in excess of 150% of the next previous regular quarterly cash
dividend or a dividend payable in Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Market Price per
share of Preferred Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent)
of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one share
of Preferred Stock and the denominator of which shall be such Current Market
Price per share of the Preferred Stock; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall
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again be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "Current
Market Price" per share of any security (a "Security" for the purpose of this
Section 11(d)) on any date shall be determined as provided in this
Section 11(d). In the case of a publicly traded stock or other security, the
Current Market Price on any date shall be deemed to be the average of the
daily Closing Prices per share of such Security for the 30 consecutive Trading
Days immediately prior to such date; provided, however, that in the event that
the Current Market Price per share of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares or (B) any subdivision,
combination, consolidation, or reclassification of such Security and prior to
the expiration of 30 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall
be appropriately adjusted to take into account ex-dividend trading. For the
purpose of any computation hereunder, if the Preferred Stock is not publicly
traded but the shares of Common Stock are publicly traded, the "Current Market
Price" per share of the Preferred Stock shall be conclusively deemed to be the
Current Market Price per share of Common Stock multiplied by 100
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof. If the Security is not publicly
held or not so listed or traded (or in the case of Preferred Stock, if neither
the Preferred Stock nor the Common Stock are publicly traded), "Current Market
Price" per share shall mean the fair value per share as determined in
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good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% of the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a share of Preferred Stock or Common Stock or any other share or security,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
(b), (c), (e), (h), (i) and (m), as applicable, and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a share of Preferred Stock purchasable
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from time to time hereunder upon exercise of the Rights, each subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a share of Preferred Stock (calculated to
the nearest one ten-thousandth of a share of Preferred Stock) obtained by (i)
multiplying (x) the number of one one-hundredths of a share of Preferred Stock
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust
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the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If the 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 shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-hundredths of a share of Preferred Stock which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number of
one one-hundredths of a share
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of Preferred Stock or of the number of shares of Common Stock or other
securities issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a share of Preferred Stock or other such
number of shares of Common Stock or other securities at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the shares of Preferred Stock, cash and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the shares
of Preferred Stock, cash and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional or
otherwise) of Preferred Stock, Common Stock or other capital stock or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be advisable
in order that any (i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at less than
the Current Market Price, (iii) issuance wholly for cash of Preferred Stock or
securities which by their terms
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are convertible into or exchangeable for Preferred Stock, (iv) dividends on
Preferred Stock payable in shares of Preferred Stock or (v) issuance of
rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such holders.
(n) The Company covenants and agrees that it shall not, at any time
after the earlier of the Distribution Date or the Stock Acquisition Date,
(i) consolidate with any other Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(o) hereof), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof) or (iii) sell, lease or transfer (or
permit one or more Subsidiaries to sell, lease or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which complies (and all of which together comply) with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger, sale,
lease or transfer there are any rights, warrants or other instruments or
securities of the Company or any other Person outstanding or agreements,
arrangements or understandings in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights,
(y) prior to, simultaneously with or immediately after such consolidation,
merger, sale, lease or transfer, the shareholders or other equity owners of
the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or
(z) the identity,
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form or nature of organization of the Principal Party (including, without
limitation, the selection of the Person that will be the Principal Party as a
result of the Company's entering into one or more consolidations, mergers,
sales, leases, transfers or transactions with more than one party) would
preclude or limit the exercise of Rights or otherwise diminish substantially
or eliminate the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Section 23, 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if the purpose of such action is to, or if at
the time such action is taken it is reasonably foreseeable that such action
will, diminish substantially or eliminate the benefits intended to be afforded
by the Rights.
(p) Anything in this Rights Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Record Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, (iii) combine the
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue any shares of its capital stock in a reclassification of
the outstanding shares of Common Stock, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior
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to the occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certification of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11, 13 or
23(c) hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Preferred Stock and 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 26. Notwithstanding the foregoing sentence, the
failure of the Company to make such certification or give such notice shall
not affect the validity of or the force or effect of the requirement for such
adjustment. Any adjustment to be made pursuant to Sections 11, 13 or 23(c) of
this Rights Agreement shall be effective as of the date of the event giving
rise to such adjustment. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, on or after the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person or Persons and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person or Persons shall consolidate with, or merge with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
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consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other Person or
cash or any other property or (z) the Company shall sell, lease or otherwise
transfer (or one or more of its Subsidiaries shall sell, lease or otherwise
transfer) in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than to the Company or any Subsidiary of the Company (any event
described in (x), (y) or (z) a "Flip-Over Event")), then, and in such case,
proper provision shall be made so that (i) each holder of record of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) in accordance with the
terms of this Rights Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of shares of validly issued, fully
paid and nonassessable and freely tradeable shares of Common Stock of the
Principal Party (as defined herein), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the
result obtained by dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the Current Market Price
per share of the Common Stock of such Principal Party on the date of
consummation of such Flip-Over Event; provided that the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the
number of shares of Common Stock of such Principal Party so receivable upon
exercise of each Right shall be further adjusted as provided in this Agreement
to reflect any events occurring after the date of the first occurrence of a
Flip-
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Over Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Flip-Over Event, all the obligations and
duties of the Company pursuant to this Rights Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Flip-
Over Event; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; provided, however,
that, upon the subsequent occurrence of any merger, consolidation, sale of all
or substantially all of the assets, recapitalization, reclassification of
shares, reorganization or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price, such
cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had it, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of
a Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of its stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Flip-Over Event.
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(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which shares of Common Stock of the Company
are converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer the outstanding Common Stock of which has the
greatest aggregate market value or (B) if no securities are so issued,
(x) the Person that survives such consolidation or is the other party to
the merger and survives such merger or, if there is more than one such
Person, the Person the Common Stock of which has the greatest aggregate
market value, (y) if the Person that is the other party to the merger
does not survive the merger, the Person that does survive the merger
(including the Company if it survives), or (z) the Person resulting from
the consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence in 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, or, if each Person that is
a party to such transaction or transactions receives the same portion of
the assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined, the
Person the outstanding Common Stock of which has the greatest aggregate
market value;
provided, however, that in any such case described in Section 13(b)(i) or
(b)(ii) above, if the Common Stock of such Person is not at such time and has
not been continuously over the preceding twelve-month period registered under
Section 12 of the Exchange Act, and if (1) such
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Person is a direct or indirect Subsidiary of another Person the Common Stock
of which are and have been so registered, the term "Principal Party" shall
refer to such other Person; (2) such Person is a Subsidiary, directly or
indirectly, of more than one Person, the shares of Common Stock of all of
which are and have been so registered, the term "Principal Party" shall refer
to whichever of such Persons is the issuer whose outstanding Common Stock has
the greatest aggregate market value; and (3) such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in (1)
and (2) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "Subsidiary" of both or
all of such joint venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any Flip-Over Event unless
each Principal Party (or Person that may become a Principal Party as a result
of such Flip-Over Event) shall have a sufficient number of authorized shares
of its Common Stock that have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and each Principal Party involved therein
shall have executed and delivered to the Rights Agent an agreement confirming
that the Principal Party shall, upon consummation of such consolidation,
merger or sale or transfer of assets or earning power, assume this Rights
Agreement in accordance with Sections 13(a) and (b) hereof, that the
requirements of Section 13(a) or (b) shall be promptly performed in accordance
with these terms, that all rights of first refusal or preemptive rights in
respect of the
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issuance of shares of Common Stock of the Principal Party upon exercise of
outstanding Rights have been waived and that such Flip-Over Event shall not
result in a default by the Principal Party under this Rights Agreement, and
further providing that, as soon as practicable after the date of such Flip-
Over Event, 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, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date;
(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, if the Common Stock of the
Principal Party is or shall become listed on a national securities
exchange, to list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on such securities
exchange and, if the Common Stock of the Principal Party shall not be
listed on a national securities exchange, to cause the Rights and the
securities purchasable upon exercise of the Rights to be reported by
Nasdaq or such other transaction reporting system then in use; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the
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requirements for registration on Form 10 (or any successor form) under
the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Flip-Over
Event shall occur at any time after the occurrence of a Flip-In Event, the
Rights that have not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable in the manner
described in Section 13(a).
(d) Notwithstanding anything in this Rights Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons (or a wholly owned subsidiary of any such
Person or Persons) who acquired shares of Common Stock of the Company pursuant
to a Permitted Offer, (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased pursuant to such
Permitted Offer, and (iii) the form of consideration being offered to the
remaining holders of shares of Common Stock pursuant to such transaction is
the same as the form of consideration paid to holders of shares of Common
Stock pursuant to such Permitted Offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
(e) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate or Articles of Incorporation or
By-laws or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a
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consequence of, the consummation of a transaction referred to in this Section
13, Common Stock of such Principal Party at less than the then Current Market
Price per share or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then Current Market Price
(other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection
with the issuance of the shares of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the
Company shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(f) The Company covenants and agrees that it shall not, at any time
after the occurrence of a Flip-In Event, enter into any transaction that would
constitute a Flip-Over Event if (i) at the time of or immediately after such
Flip-Over Event there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after such Flip-Over
Event, the stockholders of the Person who constitutes, or would constitute,
the Principal Party for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
Current Market Price of a whole Right. For the purposes of this Section
14(a), the then-Current Market Price of a Right shall be the Closing Price of
the Rights for the Trading Day immediately prior to the date on which
fractional Rights would have been issuable, determined in the same manner as
the Current Market Price of a share of Common Stock shall be determined
pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock or other securities of the Company upon exercise of the
Rights (other than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock) or to distribute certificates which evidence
interests in fractional shares (other than fractions of shares which are
integral multiples of one one-hundredth of a share of Preferred Stock);
provided that in lieu of issuing fractions of shares of Preferred Stock, the
Company may, at its election, issue depositary receipts evidencing fractions
of shares pursuant to an appropriate agreement between the Company and a
depositary selected by it, but only if such agreement shall provide that the
holders of such depositary receipts shall have all of the rights, privileges
and preferences to which they would be entitled as beneficial owners of the
Preferred Stock. With respect to fractional shares that are not integral
multiples of one one-hundredth of a share of Preferred Stock, if the Company
does not issue such fractional shares or depositary receipts in lieu thereof,
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there shall be paid to the holders of record of Right Certificates at the time
such Right Certificates are exercised as herein provided an amount in cash
equal to the same fraction of the then Current Market Price of a share of
Preferred Stock or other securities of the Company. For purposes of this
Section 14(b), the then Current Market Price of a share of Preferred Stock or
other securities of the Company shall be the closing price thereof for the
Trading Day immediately prior to the date of such exercise, as determined
pursuant to Section 11(d) hereof.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the Current Market Price of one share of Common Stock. For
purposes of this Section 14(c), the Current Market Price of one share of
Common Stock shall be the closing price of one share of Common Stock (as
determined pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares of
Preferred Stock or other securities of the Company upon exercise of a Right,
except as provided by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Rights Agreement, except the rights of action given to the Rights Agent
in 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 in their capacity as holders of Rights); and any
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registered holder of any Right Certificate (or, prior to the Distribution
Date, any holder of record of the Common Stock, in its capacity as a holder of
Rights), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, any holder of record of
Common Stock in its capacity as a holder of Rights), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right
Certificate (or, prior to the Distribution Date, evidenced by such Common
Stock) in the manner provided therein and in this Rights 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 Rights Agreement and,
accordingly, that they will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Rights Agreement.
Section 16. Agreement of Right Holders. Each holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced
by the certificates for Common Stock registered in the name of the holders of
the Common Stock and not by separate Right Certificates, and each Right shall
be transferable only simultaneously and together with the transfer of Common
Stock;
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(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the designated office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent or the
transfer agent of the Common Stock) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock, Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
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Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Rights 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 Rights Agreement, including the cost and
expenses of defending against any claim of liability relating to the Rights or
this Rights Agreement.
(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 Rights Agreement in reliance upon
any Right Certificate or certificate for Preferred Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, guaranteed, verified or
acknowledged, by the proper Person or Persons or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
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Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights 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 Rights Agreement any
of the Right Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights 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 such Right Certificates so
countersigned; in case at that time any of the Right Certificates shall not
have been
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countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Rights 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 (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 Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board, the President, any Senior Vice
President, any Vice President, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Rights Agreement in reliance upon
such certificate.
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(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 Rights 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 Rights 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 Rights Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Sections 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
actual written notice that such change or adjustment is required); nor shall
it by any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Preferred Stock or Common
Stock to be issued pursuant to this Rights Agreement or any Right Certificate
or as to whether any shares of Preferred Stock or Common Stock will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts,
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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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken suffered to be taken by it in good
faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to
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purchase, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Preferred Stock and the Common Stock by registered
or certified mail and to the holders, if any, of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent (with or without cause) upon 30 days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Preferred Stock and the Common Stock by registered or
certified mail and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. Notwithstanding the foregoing provisions of this Section 21, in
no event shall the resignation or removal of a Rights Agent be effective until
a successor Rights Agent shall have been appointed and have accepted such
appointment. 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,
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shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of Texas or of any other state of the United
States (so long as such corporation is authorized to conduct a stock transfer
or corporate trust business), in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination in the conduct of its corporate trust or stock
transfer business by federal or state authorities 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 controlled by 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 Preferred Stock and 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. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Company shall have the authority to act as the Rights Agent until a
successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
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Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares of stock or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this Rights
Agreement.
Section 23. Redemption and Termination.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, at any time prior to the earlier of (i)
the Close of Business on the tenth Business Day following the Close of
Business on the Stock Acquisition Date, subject to extension by the Company as
provided in Section 27 hereof or (ii) the close of business on the Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, subject to adjustments as provided in
subsection (c) below (the "Redemption Price"); provided, however, that from
and after the time that any Person shall become an Acquiring Person (other
than pursuant to a Permitted Offer), the Company may redeem the Rights only if
at the time of the action of the Board of Directors there are then in office
not less than two Continuing Directors and such redemption is approved by a
majority of the Continuing Directors then in office. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be
exercisable pursuant to Section 11(a)(ii) prior to the expiration of the
Company's right of redemption hereunder.
(b) Immediately upon the effectiveness of the action of the Board
of Directors of the Company ordering the redemption of the Rights (which
action may be conditioned on the
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occurrence of one or more events or on the existence of one or more facts or
may be effective at some future time), evidence of which shall have been filed
with the Rights Agent, and without any further action and without any notice,
the right to exercise the Rights will terminate, and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the effectiveness of the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing
such notice to each such holder at its last address as such appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each notice of redemption will state the
effective time of the redemption, the method by which the payment of the
Redemption Price will be made and the time for such payment. The failure to
give notice required by this Section 23(b) or any defect therein shall not
affect the legality or validity of the action taken by the Company. At the
option of the Board of Directors, the Redemption Price may be paid in cash to
each Rights holder or by the issuance of shares of Common Stock (and, at the
Company's election pursuant to Section 14(b) hereof, cash or depositary
receipts in lieu of fractions of shares) having a Current Market Price equal
to such cash payment.
(c) In the event the Company shall at any time after the Record
Date (A) pay any dividend on the Common Stock in shares of Common Stock, (B)
subdivide or split the outstanding shares of Common Stock into a greater
number of shares or (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares of
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Common Stock or effect a reverse split of the outstanding shares of Common
Stock, then and in such event the Redemption Price shall be appropriately
adjusted to reflect such event.
Section 24. Exchange.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, at any time and from time to time after
the first occurrence of a Flip-In Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"); provided, however, that the
Company may exchange the Rights only if at the time of the action of the Board
of Directors there are then in office not less than two Continuing Directors
and such exchange is approved by a majority of the Continuing Directors then
in office. Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the effectiveness of the action of the Board
of Directors of the Company ordering the exchange of any Rights pursuant to
and in accordance with subsection (a) of this Section 24 (which action may be
conditioned upon the occurrence of one or more events or on the existence of
one or more facts or may be effective at some time in the future) and without
any further action and without any notice, the right to exercise such Rights
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shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice for exchange will state the
method by which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on
the number of Rights (other than rights which have become void pursuant to the
provisions of Sections 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock which
are authorized by the Company's restated certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 24, the Company shall take all such action as
may be necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights.
(d) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute shares of Preferred Stock (or equivalent preferred
shares, for shares of Common Stock exchangeable for Rights, at the initial
rate of one one-hundredth of a share of Preferred Stock
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(or equivalent preferred shares) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(e) The Company shall not be required to issue fractions of shares
of Common Stock (or pursuant to Section 24(d) fractional shares of Preferred
Stock (in other than integral multiples of one one-hundredth of a share) or to
distribute certificates which evidence fractional shares of Common Stock (or
nonintegral multiples of one one-hundredth of a share of Preferred Stock). In
lieu thereof, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock (or
nonintegral multiples of one one-hundredth of a share of Preferred Stock)
would otherwise be issuable an amount in cash equal to the same fraction of
the Current Market Price of a whole share of Common Stock or Preferred Stock.
For the purposes of this Section 24(e), the applicable Current Market Price of
a whole share of Common Stock or Preferred Stock shall be determined pursuant
to Section 11(d) hereof for the Trading Day immediately prior to the effective
date of exchange pursuant to Section 24(b) hereof.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
earlier of the Distribution Date or the Stock Acquisition Date, (i) to effect
any of the transactions referred to in Section 11(a)(i) hereof or to pay any
dividend to the holders of record of its Preferred Stock payable in stock of
any class or to make any other distribution to the holders of record of its
Preferred Stock (other than a regular quarterly cash dividend), (ii) to offer
to the holders of
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record of its Preferred Stock, options, warrants or other rights to subscribe
for or to purchase (including any security convertible into or exchangeable
for Preferred Stock) any shares of Preferred Stock or shares of stock of any
class or any other securities, options, warrants, convertible or exchangeable
securities or other rights, or (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), or (iv) to effect any consolidation
or merger with or into, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person or
Persons, or (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the shares of Common Stock
payable in shares of Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in shares of Common Stock), then, in each such case, the
Company shall give to each holder of record of a Right Certificate, in
accordance with Section 26, a notice of such proposed action, which shall
specify the record date for the purposes of such dividend or distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, lease, transfer, liquidation, dissolution, or winding up is to
take place and the record date for determining participation therein by the
holders of record of the Common Stock and/or Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to
the date of the taking of such proposed
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action or the date of participation therein by the holders of record of the
Common Stock and/or Preferred Stock, whichever shall be the earlier. The
failure to give notice required by this Section 25 or any defect therein shall
not affect the legality or validity of the action taken by the Company or the
vote upon any such action.
(b) In case any Flip-In Event shall occur, then, (i) the Company
shall as soon as practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of the occurrence
of such event, which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references
in the preceding paragraph to Preferred Stock shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record
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:
Hornbeck Offshore Services, Inc.
7707 Harborside Drive
Galveston, Texas 77554
Attention: Larry D. Hornbeck, President
Subject to the provisions of Section 21, any notice or demand authorized by
this Rights Agreement to be given or made by the Company or by the holder of
record 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:
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First Interstate Bank of Texas, N.A.
1000 Louisiana
2nd Floor
Houston, Texas 77002
Attention: Margaret Mata
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right
Certificate or Right (or, if prior to the Distribution Date, to the holder of
certificates representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. For as long as the Rights
are then redeemable and except as provided in the last sentence of this
Section 27, the Company may in its sole and absolute discretion and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of any holders of the
Rights or the shares of Common Stock. At any time when the Rights are not
then redeemable and except as provided in the last sentence of this Section
27, the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights Certificates in order (a) to cure any ambiguity, (b) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (c) to shorten or lengthen any
time period hereunder or (d) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and that shall
not materially adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of
any Acquiring Person); provided, that this Agreement may not be supplemented
or amended to
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lengthen, pursuant to clause (c) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than any Acquiring Person and its
Affiliates and Associates). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Rights Agreement to the contrary, no supplement or amendment
shall be made which decreases the Redemption Price or shortens the Final
Expiration Date and supplements or amendments may be made after the time that
any Person becomes an Acquiring Person (other than pursuant to a Permitted
Offer) only if at the time of the action of the Board of Directors approving
such supplement or amendment there are then in office not less than two
Continuing Directors and such supplement or amendment is approved by a
majority of the Continuing Directors then in office.
Section 28. Successors. All of the covenants and provisions of
this Rights 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. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Rights Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time, including
without limitation 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
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the General Rules and Regulations under the Exchange Act as in effect on the
date hereof. The Board of Directors of the Company (or, as set forth herein,
certain specified members thereof) shall have the exclusive power and
authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including, without limitation, a determination to redeem or
not redeem the Rights or to amend this Rights Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done
or made by the Board of Directors of the Company in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Rights Agreement. Nothing in this
Rights 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, the registered holders of
the shares of Common Stock) any legal or equitable right, remedy or claim
under this Rights Agreement; but this Rights Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of shares of Common Stock in their capacity as holders of
Rights).
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Section 31. Severability. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; provided, however, that notwithstanding
anything in this Rights 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
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth day following the
date of such determination by the Board of Directors of the Company. Without
limiting the foregoing, if any provision requiring that a determination be
made by less than the entire Board of Directors of the Company is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the entire Board of
Directors of the Company.
Section 32. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
Section 33. Counterparts. This Rights Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
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Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have cause this Rights
Agreement to be duly executed, all as of the day and year first above written.
HORNBECK OFFSHORE SERVICES, INC.
By: /s/ ROBERT W. HAMPTON
---------------------------------------------
Robert W. Hampton
Vice President, Treasurer, and Chief
Financial Officer
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ CHRISTINA FAITH
---------------------------------------------
Name: Christina Faith
-------------------------------------------
Title: Corporate Trust Officer
------------------------------------------
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EXHIBIT A
CERTIFICATE OF DESIGNATIONS
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
HORNBECK OFFSHORE SERVICES, INC.
Pursuant to Section 151 of the Delaware
General Corporation Law
Hornbeck Offshore Services, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), DOES HEREBY CERTIFY:
1. That by resolution of the Board of Directors of the Company dated
June 20, 1995, and by a Certificate of Designations filed in the office of the
Secretary of State of Delaware on June 20, 1995, the Company authorized the
issuance of a series of 500,000 shares of Series B Junior Participating
Preferred Stock of the Company (the "Series B Preferred Stock") and
established the voting powers, designations, preferences and relative,
participating and other rights, and the qualifications, limitations or
restrictions thereof.
2. That as of the date hereof no shares of such Series B Preferred
Stock are outstanding and no shares of such Series B Preferred Stock have been
issued.
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors of the Company by its Restated Certificate of Incorporation and by
the provisions of Section 151(g) of the General Corporation Law of the State
of Delaware, the voting powers, preferences and relative participating,
optional or other special rights of the Series B Preferred Stock of the
Company, and the qualifications, limitations or restrictions thereof, be and
the same hereby are, established in their entireties to be as follows:
<PAGE> 73
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series B Junior Participating Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting such series shall be
five hundred thousand (500,000).
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set
forth, the holders of shares of Series B Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, (i) cash dividends in an amount per share
(rounded to the nearest cent) equal to 100 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, $0.10 par
value per share, of the Company (the "Common Stock") and (ii) a preferential
cash dividend (the "Preferential Dividends"), if any, on the first day of
April, July, October and January of each year (each a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series B Preferred
Stock, in an amount equal to $1.00 per share of Series B Preferred Stock less
the per share amount of all cash dividends declared on the Series B Preferred
Stock pursuant to clause (i) of this sentence since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series B Preferred Stock. In the event the Company shall, at any
time after the issuance of any share or fraction of a share of Series B
Preferred Stock, make any distribution on the shares of Common Stock of the
Company, whether by way of a dividend or a reclassification of stock, a
recapitalization, reorganization or partial liquidation of the Company or
otherwise, which is payable in cash or any debt security, debt instrument,
real or personal property or any other
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property (other than cash dividends subject to the immediately preceding
sentence, a distribution of shares of Common Stock or other capital stock of
the Company or a distribution of rights or warrants to acquire any such share,
including any debt security convertible into or exchangeable for any such
share, at a price less than the Fair Market Value of such share), then and in
each such event the Company shall simultaneously pay on each then outstanding
share of Series B Preferred Stock of the Company a distribution, in like kind,
of 100 times such distribution paid on a share of Common Stock (subject to the
provisions for adjustment hereinafter set forth). The dividends and
distributions on the Series B Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter referred to
as "Participating Dividends" and the multiple of such cash and non-cash
dividends on the Common Stock applicable to the determination of the
Participating Dividends, which shall be 100 initially but shall be adjusted
from time to time as hereinafter provided, is hereinafter referred to as the
"Dividend Multiple". In the event the Company shall at any time after
June 20, 1995 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of
Common Stock into a greater or lesser number of shares of Common Stock, then
in each such case the Dividend Multiple thereafter applicable to the
determination of the amount of Participating Dividends which holders of shares
of Series B Preferred Stock shall be entitled to receive shall be the Dividend
Multiple applicable immediately prior to such event multiplied by a fraction
the numerator of which is the number of shares of Common Stock outstanding
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immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare each Participating Dividend at the
same time it declares any cash or non-cash dividend or distribution on the
Common Stock in respect of which a Participating Dividend is required to be
paid. No cash or non-cash dividend or distribution on the Common Stock in
respect of which a Participating Dividend is required to be paid shall be paid
or set aside for payment on the Common Stock unless a Participating Dividend
in respect of such dividend or distribution on the Common Stock shall be
simultaneously paid, or set aside for payment, on the Series B Preferred
Stock.
(C) Preferential Dividends shall begin to accrue on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issuance of any shares of Series B Preferred Stock.
Accrued but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential Dividends paid on the shares of Series B Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Company.
The number of votes which a holder of Series B Preferred Stock is entitled to
cast, as the same may be adjusted from time to time as hereinafter
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provided, is hereinafter referred to as the "Vote Multiple". In the event the
Company shall at any time after June 20, 1995 declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, then in each such case the Vote Multiple thereafter applicable to the
determination of the number of votes per share to which holders of shares of
Series B Preferred Stock shall be entitled after such event shall be the Vote
Multiple immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Restated
Certificate of Incorporation or By-laws, the holders of shares of Series B
Preferred Stock and the holders of shares of Common Stock shall vote together
as one class on all matters submitted to a vote of stockholders of the
Company.
(C) In the event that the Preferential Dividends accrued on the
Series B Preferred Stock for four or more quarterly dividend periods, whether
consecutive or not, shall not have been declared and paid or set apart for
payment, the holders of record of Preferred Stock of the Company of all series
(including the Series B Preferred Stock), other than any series in respect of
which such right is expressly withheld by the Amended and Restated Certificate
of Incorporation or the authorizing resolutions included in the certificate of
designations therefor, shall have the right, at the next meeting of
stockholders called for the election of directors, to elect two members to the
Board of Directors, which directors shall be in addition
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to the number required by the By-laws prior to such event, to serve until the
next Annual Meeting and until their successors are elected and qualified or
their earlier resignation, removal or incapacity or until such earlier time as
all accrued and unpaid Preferential Dividends upon the outstanding shares of
Series B Preferred Stock shall have been paid (or set aside for payment) in
full. The holders of shares of Series B Preferred Stock shall continue to
have the right to elect directors as provided by the immediately preceding
sentence until all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series B Preferred Stock shall have been paid (or set
aside for payment) in full. Such directors may be removed and replaced by
such stockholders, and vacancies in such directorships may be filled only by
such stockholders (or by the remaining director elected by such stockholders,
if there be one) in the manner permitted by law; provided, however, that any
such action by stockholders shall be taken at a meeting of stockholders and
shall not be taken by written consent thereto.
(D) Except as otherwise required by the Restated Certificate of
Incorporation or By-laws or set forth herein, holders of Series B Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for the taking of any corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Participating Dividends
are in arrears or the Company shall be in default of payment thereof, thereafter
and until all accrued and unpaid Preferential Dividends and Participating
Dividends, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid or set aside for payment in full,
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and in addition to any and all other rights which any holder of shares of
Series B Preferred Stock may have in such circumstances, the Company shall
not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series B Preferred Stock, unless dividends are
paid ratably on the Series B Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled if the full dividends accrued thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 4(A), redeem or purchase orotherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Preferred Stock, provided that the Company may at any time
redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Company ranking
junior (both as to dividends and upon liquidation, dissolution or
winding up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock, or any shares of stock ranking
on a parity with the
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Series B Preferred Stock (either as to dividends or upon liquidation,
dissolution or winding up), except in accordance with a purchase offer
made to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Company shall not permit any Subsidiary (as hereinafter
defined) of the Company to purchase or otherwise acquire for consideration any
shares of stock of the Company unless the Company could, under paragraph (A)
of this Section 4, purchase or otherwise acquire such shares at such time and
in such manner. A "Subsidiary" of the Company shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of Directors or other
persons performing similar functions are beneficially owned, directly or
indirectly, by the Company or by any corporation or other entity that is
otherwise controlled by the Company.
(C) The Company shall not issue any shares of Series B Preferred
Stock except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of June 20, 1995 between the Company and First Interstate
Bank of Texas, N.A., as Rights Agent, a copy of which is on file with the
Secretary of the Company at its principal executive office and shall be made
available to stockholders of record without charge upon written request
therefor addressed to said Secretary. Notwithstanding the foregoing sentence,
nothing contained in the provisions hereof shall prohibit or restrict the
Company from issuing for any purpose any series
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of Preferred Stock with rights and privileges similar to, different from, or
greater than, those of the Series B Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof. All such
shares upon their retirement and cancellation shall become authorized but
unissued shares of Preferred Stock, without designation as to series, and such
shares may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Company, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock unless the holders of shares of
Series B Preferred Stock shall have received, subject to adjustment as
hereinafter provided, (A) $100.00 per share plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment, or (B) if greater than the amount specified in
clause (i)(A) of this sentence, an amount equal to 100 times the aggregate
amount to be distributed per share to holders of Common Stock, as the same may
be adjusted as hereinafter provided, and (ii) to the holders of stock ranking
on a parity upon liquidation, dissolution or winding up with the Series B
Preferred Stock, unless simultaneously therewith distributions are made
ratably on the Series B Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of shares of
Series B Preferred Stock are entitled under clause (i)(A) of this sentence and
to which the holders of such parity
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shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series B Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant
to clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant to said clause to
the determination of the Participating Liquidation Amount, as said multiple
may be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Liquidation Multiple". In the event the Company shall at
any time after June 20, 1995 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of
Common Stock into a greater or lesser number of shares of Common Stock, then
in each such case the Liquidation Multiple thereafter applicable to the
determination of the Participating Liquidation Amount to which holders of
Series A Preferred Stock shall be entitled after such event shall be the
Liquidation Multiple applicable immediately prior to such event multiplied by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. Certain Reclassifications and Other Events.
(A) In the event that holders of shares of Common Stock of the
Company receive after June 20, 1995 in respect of their shares of Common Stock
any share of capital stock of the Company (other than any share of Common
Stock of the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or
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otherwise (a "Transaction"), then and in each such event the dividend rights,
voting rights and rights upon the liquidation, dissolution or winding up of
the Company of the shares of Series B Preferred Stock shall be adjusted so
that after such event the holders of Series B Preferred Stock shall be
entitled, in respect of each share of Series B Preferred Stock held, in
addition to such rights in respect thereof to which such holder was entitled
immediately prior to such adjustment, to (i) such additional dividends as
equal the Dividend Multiple in effect immediately prior to such Transaction
multiplied by the additional dividends which the holder of a share of Common
Stock shall be entitled to receive by virtue of the receipt in the Transaction
of such capital stock, (ii) such additional voting rights as equal the Vote
Multiple in effect immediately prior to such Transaction multiplied by the
additional voting rights which the holder of a share of Common Stock shall be
entitled to receive by virtue of the receipt in the Transaction of such
capital stock and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such Transaction multiplied by the additional
amount which the holder of a share of Common Stock shall be entitled to
receive upon liquidation, dissolution or winding up of the Company by virtue
of the receipt in the Transaction of such capital stock, as the case may be,
all as provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the
Company receive after June 20, 1995 in respect of their shares of Common Stock
any right or warrant to purchase Common Stock (including as such a right, for
all purposes of this paragraph, any security convertible into or exchangeable
for Common Stock) at a purchase price per share less than the Fair Market
Value (as hereinafter defined) of a share of Common Stock on the date of
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issuance of such right or warrant, then and in each such event the dividend
rights, voting rights and rights upon the liquidation, dissolution or winding
up of the Company of the shares of Series B Preferred Stock shall each be
adjusted so that after such event the Dividend Multiple, the Vote Multiple and
the Liquidation Multiple shall each be the product of the Dividend Multiple,
the Vote Multiple and the Liquidation Multiple, as the case may be, in effect
immediately prior to such event multiplied by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding immediately
before such issuance of rights or warrants plus the maximum number of shares
of Common Stock which could be acquired upon exercise in full of all such
rights or warrants and the denominator of which shall be the number of shares
of Common Stock outstanding immediately before such issuance of rights or
warrants plus the number of shares of Common Stock which could be purchased,
at the Fair Market Value of the Common Stock at the time of such issuance, by
the maximum aggregate consideration payable upon exercise in full of all such
rights or warrants.
(C) In the event that holders of shares of Common Stock of the
Company receive after June 20, 1995 in respect of their shares of Common Stock
any right or warrant to purchase capital stock of the Company (other than
shares of Common Stock), including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for capital stock of
the Company (other than Common Stock), at a purchase price per share less than
the Fair Market Value of such shares of capital stock on the date of issuance
of such right or warrant, then and in each such event the dividend rights,
voting rights and rights upon liquidation, dissolution or winding up of the
Company of the shares of Series B Preferred Stock shall each be adjusted so
that after such event each holder of a share of Series B Preferred Stock
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<PAGE> 84
shall be entitled, in respect of each share of Series B Preferred Stock held,
in addition to such rights in respect thereof to which such holder was
entitled immediately prior to such event, to receive (i) such additional
dividends as equal the Dividend Multiple in effect immediately prior to such
event multiplied, first, by the additional dividends to which the holder of a
share of Common Stock shall be entitled upon exercise of such right or warrant
by virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction (as hereinafter defined) and
(ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such event multiplied, first, by the additional voting
rights to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could
be acquired upon such exercise and multiplied again by the Discount Fraction
and (iii) such additional distributions upon liquidation, dissolution or
winding up of the Company as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares
of Common Stock of the Company as contemplated by this paragraph immediately
after the distribution thereof and the purchase price per share for such
share of capital stock pursuant to such right or warrant and the denominator
of which shall be
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<PAGE> 85
the Fair Market Value of a share of such capital stock immediately after the
distribution of such right or warrant.
(D) For purposes of this Section 7, the "Fair Market Value" of a
share of capital stock of the Company (including a share of Common Stock) on
any date shall be deemed to be the average of the daily closing price per
share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that,
in the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then,
and in each such case, the Fair Market Value shall be appropriately adjusted
by the Board of Directors of the Company to take into account ex-dividend or
post-effective date trading. The closing price for any day shall be the last
sale price, regular way, or, in case, no such sale takes place on such day,
the average of the closing bid and asked prices, regular way (in either case,
as reported in the applicable transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange), or,
if the shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the applicable transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the shares are listed or admitted to trading or, if the shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the
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<PAGE> 86
National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") or such other system then in use, or if on any such date the shares
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a Professional market maker making a market in
the shares selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or admitted to
trading on any national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be selected by the
Board of Directors of the Company is open. If the shares are not publicly
held or not so listed or traded on any day within the period of 30 Trading
Days applicable to the determination of Fair Market Value thereof as
aforesaid, "Fair Market Value" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors of the Company.
In either case referred to in the foregoing sentence, the determination of
Fair Market Value shall be described in a statement filed with the Secretary
of the Company.
Section 8. Consolidation, Merger, etc. In case the Company shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each
outstanding share of Series B Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
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<PAGE> 87
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series B Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each holder of
a share of Series B Preferred Stock of the effect of any adjustment to the
voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Company of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Company to give
such notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment.
Section 10. No Redemption. The shares of Series B Preferred Stock
shall not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may
acquire shares of Series B Preferred Stock in any other manner permitted by
law, the provisions hereof and the Restated Certificate of Incorporation of
the Company.
Section 11. Ranking. Unless otherwise provided in the Restated
Certificate of Incorporation of the Company or a Certificate of Designations
relating to a subsequent series of preferred stock of the Company, the Series
B Preferred Stock shall rank junior to all other series of the Company's
preferred stock as to the payment of dividends and the distribution of assets
on liquidation, dissolution or winding up and senior to the Common Stock.
Section 12. Amendment. The provisions hereof and the Restated
Certificate of Incorporation of the Company shall not be amended in any manner
which would adversely affect the rights, privileges or powers of the Series B
Preferred Stock without, in addition to any other
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<PAGE> 88
vote of stockholders required by law, the affirmative vote of the holders of
two-thirds or more of the outstanding shares of Series B Preferred Stock,
voting together as a single class.
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<PAGE> 89
IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designations and do affirm the foregoing as true under the penalties of
perjury this 20th day of June, 1995.
By:
---------------------------------------------
Title:
------------------------------------------
ATTEST:
- ------------------------------
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<PAGE> 90
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER JUNE 20, 2005 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY
AT $.01 PER RIGHT, AND TO EXCHANGE, ON THE TERMS SET FORTH OR REFERRED TO IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
ADDITIONALLY, UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY AN ALIEN (AS DEFINED IN THE FORM OF ELECTION TO
PURCHASE ON THE REVERSE SIDE HEREOF) SHALL NOT BE EXERCISABLE.
RIGHT CERTIFICATE
HORNBECK OFFSHORE SERVICES, INC.
This certifies that _______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of June 20, 1995, as the same may
be supplemented or amended from time to time (the "Rights Agreement") between
Hornbeck Offshore Services, Inc., a Delaware corporation (the "Company"), and
First Interstate Bank of Texas, N.A., a national banking association (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 20, 2005 at the designated office of the
Rights Agent, or its successors as Rights Agent, one one-hundredth of a fully
paid nonassessable share of the Company's Series B Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Stock") at a
purchase price of $60.00 per one one-hundredth of a share of Preferred Stock
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate
B-1
<PAGE> 91
with the Form of Election to Purchase and related certificate set forth on the
reverse side hereof duly executed.
As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredth of a share of Preferred Stock which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events and, upon the happening of certain events, securities other than shares
of Preferred Stock, or other property, may be acquired upon exercise of the
Rights evidenced by this Right Certificate, as provided by the Rights
Agreement.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and may not be transferred to any person and the
holder of any such Right (including any purported transferee or subsequent
holder) shall not have any right to exercise or transfer any such Right.
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 of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
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 Right
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $.01 per Right (payable, at the election of the
Company, in cash or in shares of the Company's common stock, $.10 par value
per share ("Common Stock")) or (ii) may be exchanged in whole or in part for
shares of Common Stock or for shares of Preferred Stock.
No fractional shares of Preferred Stock are required to be issued
upon the exercise or redemption of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock), and in lieu thereof the Company may cause depository
receipts to be issued and/or a cash payment may be made, as provided in the
Rights Agreement.
B-2
<PAGE> 92
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action or
to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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 _____________, 199__.
ATTEST: HORNBECK OFFSHORE SERVICES, INC.
By:
- ------------------------- ----------------------------------------
Secretary Name:
--------------------------------------
Title:
-------------------------------------
COUNTERSIGNED:
FIRST INTERSTATE BANK OF
TEXAS, N.A., as Rights Agent
By:
----------------------
Authorized Signature
B-3
<PAGE> 93
[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)
______________________________________________________________________________
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
____________________________ Attorney to transfer the within Rights on the
books of the within-named Company, with full power of substitution.
Dated: ____________, 199__.
___________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
B-4
<PAGE> 94
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
or transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or an Associate thereof (as such terms are defined pursuant to
the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined
pursuant to the Rights Agreement) or who is a direct or indirect transferee of
an Acquiring Person or of an Affiliate or Associate of an Acquiring Person.
Dated: _____________, 199__.
-------------------------------------------
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.
B-5
<PAGE> 95
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
exercise the Rights represented by this Right Certificate.)
To: Hornbeck Offshore Services, Inc.:
The Rights represented by this Right Certificate may be exercised
only if the person specified below in whose name the certificate representing
the shares of Preferred Stock (or other securities) issuable upon the exercise
of such Rights is to be issued has executed the application for purchase set
forth below.
Because of the method of operation and financing of certain vessels
owned or to be owned by the Company, the Shipping Act, 1916, and the Merchant
Marine Act, 1936, require that the Company limit the ownership of its capital
stock by Aliens, as that term is defined below. The Rights Agreement provides
that no Right may be exercised (and any attempt to so exercise shall be void
and of no effect) if the Company determines (prior to the issuance of the
Preferred Stock (or other securities or property) issuable upon exercise of
such Right) that (i)(A) the Preferred Stock (or other securities or property)
issuable upon exercise of such Right, or any interest therein or right
thereof, would be owned or controlled by one or more Aliens and (B) after any
such exercise, Aliens would own or control an aggregate percentage of the
shares of capital stock of the Company or any interest therein or right
thereof in excess of the Permitted Percentage (as defined in the Restated
Certificate of Incorporation of the Company) or (ii) that the exercise of such
Right would otherwise cause the Company not to be a citizen of the United
States within the meaning of the Shipping Act, 1916.
The Company will furnish to any holder of Right, upon written
request and without charge, copies of the pertinent provisions of its Restated
Certificate of Incorporation and Rights Agreement. Any such request may be
addressed to the Company at its principal place of business or registered
office.
B-6
<PAGE> 96
Application for Purchase
The undersigned (the "Applicant") hereby applies for issuance to the
name of the Applicant of the number of shares of Preferred Stock (or other
securities) issuable upon the exercise of the Rights represented by this Right
Certificate and hereby certifies to the Company that:
The Applicant [ ] IS [ ] IS NOT an "Alien."*
The Applicant [ ] WILL [ ] WILL NOT hold the shares applied for,
or any of them, for or on behalf of an "Alien."*
The Applicant hereby agrees that, on request of the Company, the
Applicant will furnish proof in support of this certification.
The Applicant hereby approves and agrees to be bound by the
provisions of the Restated Certificate of Incorporation of the Company, which
among other things imposes restrictions on the transferability and voting of
the Preferred Stock (and other securities) designed to limit foreign ownership
and control of such stock.
Sign Here:
---------------------------------
Dated: ____________, 199__.
-------------------------------------------
Signature(s) of Applicant(s)
(If the Applicant is a corporation or a
fiduciary, the title of the person signing
on behalf of the Applicant must be stated.)
* DEFINITION OF "ALIEN"
An "Alien" is:
(1) any person (including an individual, a partnership, a corporation or
an association) who is not a United States citizen or is the
representative of or fiduciary for any person who is an Alien;
(2) any foreign government or representative thereof;
(3) any corporation, the president, chief executive officer or chairman
of the board of directors of which (or any officer who automatically
succeeds to any of such offices) is an Alien, or of which more than
a minority of its directors necessary to constitute a quorum are
Aliens;
B-7
<PAGE> 97
(4) any corporation organized under the laws of any foreign government;
(5) any corporation of which a majority of its stock is owned
beneficially or of record, or may be voted by, Aliens, or which by
any other means whatsoever is controlled by or in which control is
permitted to be exercised by Aliens;
(6) any partnership or association of which a majority interest is owned
beneficially or of record by Aliens, or which by any other means is
controlled by Aliens; or
(7) any corporation, partnership or association of which a 25% or
greater interest is owned beneficially or of record by Aliens and
which owns more than 1% of the outstanding shares of the
Corporation.
NOTICE: This certificate constitutes a basis for the Company's
representation to the United States Government that it is a
citizen within the meaning of the Shipping Act, 1916, as
amended, and the Merchant Marine Act, 1936, as amended. Any
person making a statement herein which he knows to be false may
be proceeded against under Title 18, United States Code,
Section 1001, which section provides penalties of up to five
years imprisonment or a fine of up to $10,000.
The undersigned hereby irrevocably elects to exercise _______________
_ Rights represented by this Right Certificate to purchase the shares of
Preferred Stock (or other securities or property) issuable upon the exercise
of such Rights and requests that certificates for such share(s) of Preferred
Stock (or such other securities) be issued in the name:
______________________________________________________________________________
(Please insert social security or other identifying number)
______________________________________________________________________________
______________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
______________________________________________________________________________
(Please insert social security or other identifying number)
______________________________________________________________________________
______________________________________________________________________________
(Please print name and address)
Dated: ____________, 199__.
___________________________________________
Signature
B-8
<PAGE> 98
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
NOTICE
The signature to the foregoing Form of Election 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.
B-9
<PAGE> 99
PRIVILEGED & CONFIDENTIAL EXHIBIT C
ATTORNEYS' WORK PRODUCT
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT
(DEFINED BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
HORNBECK OFFSHORE SERVICES, INC.
SUMMARY OF RIGHTS TO PURCHASE STOCK
On June 20, 1995, the Board of Directors of Hornbeck Offshore
Services, Inc. (the "Company") declared a dividend on each outstanding share
of common stock, $.10 par value per share (the "Common Stock") of one right to
purchase (individually a "Right" and collectively the "Rights") Series B
Junior Participating Preferred Stock, par value $1.00 per share (the
"Preferred Stock"). The dividend is payable as of July 5, 1995 (the "Record
Date"), to stockholders of record on that date. Each Right will, upon the
occurrence of events, described below, that make it exercisable, entitle the
registered holder to purchase from the Company one one-hundredth of one share
of the Preferred Stock at a price of $60.00 (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (as amended from time to time, the "Rights Agreement") between the
Company and First Interstate Bank of Texas, N.A. as the rights agent (the
"Rights Agent").
Initially, the Rights will be represented by all certificates
representing outstanding shares of Common Stock, and no separate certificates
for the Rights will be distributed. The Rights will separate from the Common
Stock on the Distribution Date, which is defined in the Rights Agreement as
the earlier of (i) the tenth business day following the date of 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
Company's Common Stock (the date of the announcement of such acquisition being
the "Stock Acquisition Date") or (ii) the tenth business day (or such later
date as may be determined by the Board of Directors before the Distribution
Date occurs) after the commencement of public announcement of a tender or
exchange offer that would, if consummated, result in a person or group
becoming an Acquiring Person, whether any purchases actually occur pursuant to
such offer or not. The definition of Acquiring Person under the Rights
Agreement excludes (A) the Company, (B) any subsidiary of the Company, (C) any
employee benefit plan or employee stock plan of the Company or of
<PAGE> 100
any subsidiary of the Company or any person organized, appointed, established
or holding Common Stock for or pursuant to the terms of any such plan or
(D) any person whose ownership of 20% or more of the Common Stock of the
Company then outstanding results solely from (i) any action or transaction
approved by the Board of Directors before such person acquires such 20%
beneficial ownership or (ii) a reduction in the number of issued and
outstanding shares of Common Stock pursuant to a transaction or transactions
approved by the Board of Directors. Any person excluded from becoming an
Acquiring Person by reason of clause (i) or (ii) above will nevertheless
become an Acquiring Person if it acquires any additional shares of Common
Stock, unless such acquisition of additional shares of Common Stock occurs by
reason of a transaction falling within the scope of such clause (i) or (ii).
The Rights Agreement provides that, until the Distribution Date, the
Rights will be represented by and transferred with, and only with, the shares
of Common Stock. Until the Distribution Date or earlier redemption, exchange,
expiration or termination of the Rights, new certificates representing shares
of Common Stock issued after the Record Date will contain a legend
incorporating the Rights Agreement by reference and the surrender for transfer
of any certificates representing shares of Common Stock outstanding as of the
Record Date, with or without a copy of this Summary of Rights, will constitute
the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights will be mailed
to holders of record of the Common Stock as of the close of business on the
Distribution Date. From and after the Distribution Date, such separate
certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on June 20, 2005, unless earlier
redeemed or exchanged by the Company or are terminated, in each case as
described below.
The Purchase Price payable and the number of shares of Preferred
Stock or other securities, including without limitation Common Stock, or
property issuable upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock,
(ii) upon the grant to holders of the Preferred Stock of certain rights or
warrants to subscribe for or purchase Preferred Stock or securities
convertible into Preferred Stock at less than the Current Market Price (as
such term is defined in the Rights Agreement) or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights is also subject to certain
adjustments from time to time in the event of, among other things, a stock
split of the Common Stock or a stock dividend on the Common Stock payable in
shares of Common Stock, or subdivisions, consolidations or combinations of the
Common Stock occurring, in any such case, before the Distribution Date.
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<PAGE> 101
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled, when,
as and if declared, to a minimum preferential quarterly dividend payment of
$1.00 per share but will be entitled to an aggregate dividend of 100 times the
dividend declared per share of Common Stock. In the event of liquidation, the
holders of the Preferred Stock will be entitled to a minimum preferential
liquidation payment of $100.00 per share (plus any accrued but unpaid
dividends) but will be entitled to an aggregate payment of 100 times the
payment made per share of Common Stock. Each share of Preferred Stock will
have 100 votes, voting together with the Common Stock. Finally, in the event
of any merger, consolidation or other transaction in which shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 100 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
If, at any time on or after a Stock Acquisition Date (i) the Company
is acquired in a merger or other business combination transaction (in which
any shares of Common Stock are changed into or exchanged for other securities
or assets) other than certain mergers that follow a Permitted Offer or
(ii) 50% or more of the assets or earning power of the Company and its
subsidiaries (taken as a whole) is sold or transferred in one or a series of
related transactions (each of the events described in (i) and (ii) above being
a "Flip-Over Event"), each holder of a Right (except Rights that have
previously been voided) will thereafter have the right to receive, upon
exercise of such Right and payment of the Purchase Price, that number of
shares of common stock of the acquiring company having a market value at the
time of such transaction equal to two times the Purchase Price. If a person
becomes an Acquiring Person (a "Flip-In Event") in a manner other than
pursuant to a tender or exchange offer for all outstanding shares of Common
Stock at a price and on terms that a majority of Continuing Directors (as such
term is defined in the Rights Agreement) determines to be fair to and in the
best interests of the Company and its stockholders (a "Permitted Offer"), each
holder of a Right who is not an Acquiring Person or related thereto as
specified in the Rights Agreement will, if the Rights are not earlier
redeemed, thereafter have the right to receive, upon exercise of such Right
and payment of the Purchase Price, that number of shares of Preferred Stock
(or, in certain circumstances, Common Stock, cash, property or other
securities) having a Current Market Price equal to two times the Purchase
Price.
Fractions of shares of Preferred Stock (other than integral
multiples of one one-hundredth of a share) which would otherwise be issued
upon exercise or redemption of the Rights may, at the election of the Company,
be evidenced by depositary receipts. The Rights Agreement also provides that
the Company may pay cash in lieu of fractional shares.
At any time on or before the close of business on the tenth business
day following a Stock Acquisition Date (or such later date as may be
authorized by the Board of Directors and
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a majority of the Continuing Directors), the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price"),
payable at the election of the Company in cash or shares of Common Stock. The
Rights may be redeemed after the time that any Person has become an Acquiring
Person only if approved by a majority of the Continuing Directors. Immediately
upon the action of the Board of Directors of the Company authorizing
redemption of the Rights and without any further action or notice, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
After the occurrence of a Flip-In Event and before a person becomes
the beneficial owner of 50% or more of the Common Stock then outstanding, the
Company may, if authorized by the Board of Directors, such authorization
having been approved by a majority of the Continuing Directors, exchange the
Rights (other than Rights owned by an Acquiring Person or an affiliate or an
associate of an Acquiring Person, which will have become void), in whole or in
part, at an exchange ratio per Right of one share of Common Stock, and/or
other equity securities deemed to have the same value as one share of Common
Stock, subject to adjustment.
During any such time as the Rights are redeemable, the Company may
amend the Rights in any manner, including without limitation an amendment to
extend the time period during which the Rights may be redeemed, except that
the Company may not, during such time, amend the Rights to decrease the
Redemption Price or move forward the expiration date of the Rights. During
any such time as the Rights are not redeemable, the Company may amend the
Rights Agreement (a) to cure any ambiguity, defect, or inconsistency, (b) to
make changes that do not materially adversely affect the interests of holders
of the Rights (excluding the interests of any Acquiring Person), or (c) to
shorten or lengthen any time period under the Rights Agreement, except that
the Company may not amend the Rights Agreement to lengthen the time period
governing redemption during any such time as the rights are not redeemable.
Amendments to the Rights Agreement from and after the time that any person or
other entity becomes an Acquiring Person require that at least two Continuing
Directors be then in office and a majority of the Continuing Directors approve
such amendment.
Until a Right is exercised, the holder thereof, as such, will not
have any rights as a stockholder of the Company, including without limitation
the right to vote or to receive dividends.
Because of the method of operation and financing of certain vessels
owned or to be owned by the Company, the Shipping Act, 1916, and the Merchant
Marine Act, 1936, require that the Company limit the ownership of its capital
stock by persons other than citizens of the United States, within the meaning
of such Acts. In accordance with such Acts, the Company's Restated
Certificate of Incorporation contains, among other things, restrictions on
transfers of its capital stock to, and the voting of its capital stock by,
persons other than citizens of the United States. Similarly, the Rights
Agreement generally provides that no Right may be exercised if the Company
determines (prior to the issuance of the Preferred Stock (or other
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securities or property) issuable upon exercise of such Right) that (i) (A) the
Preferred Stock (or other securities or property) issuable upon exercise of
such Right, or any interest therein or right thereof, would be owned or
controlled by persons other than United States citizens and (B) after any such
exercise, persons other than United States citizens would own or control an
aggregate percentage of the shares of capital stock of the Company or any
interest therein or right thereof in excess of the Permitted Percentage (as
defined in the Restated Certificate of Incorporation of the Company) or
(ii) that the exercise of such Right would otherwise cause the Company not to
be a citizen of the United States within the meaning of the Shipping Act,
1916.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated June 21, 1995. A copy of the 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
Rights Agreement, which is incorporated in this summary description herein by
reference.
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