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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
New Jersey Resources Corporation
(Exact name of registrant as specified in its charter)
New Jersey 22-2376465
(State of incorporation or (IRS Employer Identification No.)
organization)
1415 Wyckoff Road
Wall, New Jersey 07713
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be so Name of each exchange on which each
registered class is to be registered
Rights to Purchase Series A New York Stock Exchange
Junior Participating Cumulative
Preferred Stock, $.01 par value
per share, of the Registrant
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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ITEM 1. Description of Registrant's Securities to be Registered
On July 31, 1996, the Board of Directors of New Jersey
Resources Corporation (the "Registrant") declared a dividend of one Right for
each outstanding share of Common Stock, $2.50 par value per share (the "Common
Stock") of the Registrant. The Rights will be issued on August 15, 1996 to the
shareholders of record on August 15, 1996 and will expire in ten years, subject
to earlier redemption. Under certain circumstances, each Right entitles the
registered holder to purchase from the Registrant one one-thousandth of a share
of Series A Junior Participating Cumulative Preferred Stock, $.01 par value per
share ("Preferred Stock"), of the Registrant or, in certain circumstances,
either Common Stock or common stock of an acquiring company at one-half the
market price of such Common Stock or common stock, as the case may be. The
Rights are designed to make it more likely that all the Registrant's
shareholders receive fair and equal treatment in the event of any proposed
takeover of the Registrant and to guard against the use of partial tender offers
or other coercive tactics to gain control of the Registrant. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Registrant and The First National Bank of Boston, as Rights Agent
(the "Rights Agent").
Exercise Price
When exercisable, except as set forth below, each Right
entitles the registered holder to purchase from the Registrant one
one-thousandth of a share of Preferred Stock, at a price of $55 per one
one-thousandth of a share (the "Purchase Price"), subject to adjustment in
certain circumstances.
Transfer and Detachment
Until the "Distribution Date," which is the earlier to occur
of (i) ten business days following the time (the "Stock Acquisition Time") of a
public announcement or notice to the Registrant that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership (as defined in the Rights
Agreement) of 10% or more of the outstanding shares of Common Stock of the
Registrant, and (ii) ten business days, or such later date as may be determined
by the Board of Directors of the
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Registrant, after the date of the commencement or announcement by a person of an
intention to make a tender offer or exchange offer for an amount of Common Stock
which, together with the shares of such stock already owned by such person,
constitutes 10% or more of the outstanding shares of such Common Stock, the
Rights will be evidenced, with respect to any of the Registrant's Common Stock
certificates outstanding as of August 15, 1996, by such Common Stock certificate
with a copy of a Summary of Rights attached thereto. The Rights Agreement
provides that, until the Distribution Date, the Rights will be transferred with
and only with the Registrant's Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates
issued after August 15, 1996, upon the transfer or issuance of new shares of
Common Stock, will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any of the Registrant's Common Stock
certificates outstanding as of August 15, 1996, even without a copy of the
Summary of Rights attached thereto, will also 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 ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date, and such separate Right Certificates alone will evidence
the Rights.
Exercisability
The Rights are not exercisable until the Distribution Date.
The Rights will expire on August 14, 2006 unless earlier redeemed by the
Registrant.
Right to Acquire Stock at Half Price
In the event that after the Stock Acquisition Time, the
Registrant is acquired in a merger or other business combination transaction or
50% or more of the Registrant's assets, cash flow or earning power are sold or
otherwise transferred, the Rights Agreement provides that proper provision shall
be made so that each holder of a Right, upon the exercise thereof at the then
current exercise price of the Right, shall thereafter be entitled to receive
that number of shares of common stock of the
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acquiring company which at the time of such transaction would have a market
value (as defined in the Rights Agreement) of two times the exercise price of
the Right. In the event that the Registrant is the surviving corporation of a
merger and its Common Stock is changed or exchanged, proper provision shall be
made so that each holder of a Right will thereafter have the right to receive
upon exercise that number of shares of common stock of the other party to the
transaction having a market value of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring
Person (otherwise than pursuant to a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms which are determined
to be fair and in the best interests of the Registrant and its shareholders by a
majority of the members of the Board of Directors of the Registrant who are not
Acquiring Persons or representatives or nominees of or affiliated or associated
with an Acquiring Person), proper provision shall be made so that each holder of
a Right, other than Rights that were beneficially owned by the Acquiring Person,
which will thereafter be void, will thereafter have the right to receive upon
exercise that number of shares of Common Stock having a market value (as defined
in the Rights Agreement) of two times the exercise price of the Right. A person
or group will not be deemed to be an Acquiring Person if the Board of Directors
of the Registrant determines that such person or group became an Acquiring
Person inadvertently and such person or group promptly divests itself of a
sufficient number of shares of Common Stock so that such person or group is no
longer an Acquiring Person.
Adjustments
The Purchase Price payable and the number of shares of
Preferred Stock or other securities or property issuable upon the 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 shares of Preferred Stock, (ii) upon the fixing of a
record date for the issuance to holders of Preferred Stock of certain rights,
options or warrants to subscribe for shares of Preferred Stock or convertible
securities at less than the current market price of shares of Preferred Stock or
(iii) upon the fixing of a record date for the making of a distribution to
holders of shares of Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends not
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exceeding 125% of the last regular periodic cash dividend or dividends payable
in shares of Preferred Stock) or of subscription rights or warrants (other than
those referred to above). The number of Rights and the number of shares of
Preferred Stock issuable upon exercise of each Right are also subject to
adjustment in the case of a stock split, combination or stock dividend on the
shares of Common Stock prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in the Purchase Price. No fractional shares of Common Stock will be issued
and, in lieu thereof, an adjustment in cash will be made based on the market
value of shares of Common Stock on the last trading date prior to the date of
exercise.
Redemption or Exchange
At any time prior to the earlier of (i) the Stock Acquisition
Time and (ii) August 14, 2006, the Registrant, by resolution of its Board of
Directors, may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"). Immediately upon the action of the Board of
Directors of the Registrant electing to redeem the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person of 50% or more of the outstanding Common
Stock of the Registrant the Board of Directors of the Registrant may exchange
the Rights (other than Rights beneficially owned by such person which have
become void), in whole or in part, for Common Stock of the Registrant at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
The Registrant may at its option substitute shares of Preferred Stock (or other
series of substantially similar preferred stock of the Registrant) for some or
all of the shares of Common Stock exchangeable for Rights, at an exchange ratio
of one one-thousandth of a share of Preferred Stock (or such other series of
preferred stock) for each share of Common Stock to be exchanged.
Preferred Stock
The shares of Preferred Stock purchasable upon exercise of the
Rights will be nonredeemable and junior to
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any other series of preferred stock the Registrant may issue (unless otherwise
provided in the terms of such preferred stock or in the Registrant's Certificate
of Incorporation). Each share of Preferred Stock will be entitled to receive, in
the aggregate, a dividend in an amount equal to 1,000 times the dividend per
share of Common Stock, or, if greater, $10.00 per year. In the event of
liquidation, the holders of shares of Preferred Stock will be entitled to
receive a minimum liquidation payment equal to the greater of $10.00 per share
or an amount equal to 1,000 times the amount to be paid in liquidation per share
of Common Stock. Each share of Preferred Stock will have 1 vote, voting together
with the shares of Common Stock. In addition, if dividends on the Preferred
Stock are in arrears for four consecutive quarterly payment periods, the holders
of the shares of Preferred Stock will have the right, voting as a class, to
elect two members to the Board of Directors of the Registrant. In the event of
any merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each share of Preferred Stock will be entitled to receive 1,000
times the amount and type of consideration received per share of Common Stock.
The rights of the shares of Preferred Stock as to dividends and liquidation, and
in the event of mergers and consolidations, are protected by antidilution
provisions.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Registrant, including, without
limitation, the right to vote or to receive dividends.
Amendment
The Rights and the Rights Agreement can be amended by the
Board of Directors of the Registrant in any respect (including, without
limitation, any extension of the period in which the Right Certificates may be
redeemed) at any time prior to the Stock Acquisition Time. From and after such
time, without the approval of the shareholders of the Registrant or the holders
of the Rights, the Board of Directors may only supplement or amend the Rights
Agreement in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained in the Rights Agreement which may be defective or
inconsistent with any other provision in the Rights Agreement, (iii) to shorten
or lengthen any time period under the Rights Agreement or (iv) to make any
changes or supplements which the Registrant may deem necessary or desirable
which shall not adversely affect the interests of the holders of Right
Certificates
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(other than an Acquiring Person or an affiliate or associate of any such
person), provided that any such action by the Board of Directors must have the
concurrence of a majority of the Continuing Directors (as defined in the Rights
Agreement) and provided that the Continuing Directors constitute a majority of
directors then in office, and provided that the Rights Agreement may not be
supplemented or amended to lengthen (A) a time period relating to when the
Rights may be redeemed or to modify the ability (or inability) of the
Registrant's board of directors to redeem the Rights, in either case 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 or the benefits to the holders of Rights (other than an Acquiring
Person or an affiliate or associate of any such person).
Issuance of Rights
Each outstanding share of Common Stock on August 15, 1996 will
receive one Right. As long as the Rights are attached to the shares of Common
Stock, the Registrant will issue one Right with each share of Common Stock it
issues, so that all such shares have attached Rights. 50,000 shares of Preferred
Stock have been reserved for issuance upon exercise of the Rights.
A copy of the Rights Agreement, which includes as Exhibit B
the form of Right Certificate, is attached hereto as Exhibit 1 and is
incorporated herein by reference. The foregoing description of the Rights is
qualified in its entirety by reference to such Exhibit.
ITEM 2. Exhibits
99.1. Rights Agreement between the Registrant and The First
National Bank of Boston, Rights Agent, dated as of
July 31, 1996, which includes as Exhibit B the form
of Right Certificate.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized.
NEW JERSEY RESOURCES CORPORATION
By /s/ Glenn C. Lockwood
-------------------------------
Glenn C. Lockwood
Senior Vice President and
Chief Financial Officer
DATE: August 2, 1996
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.1. Rights Agreement between the Registrant and The
First National Bank of Boston, Rights Agent, dated
as of July 31, 1996, which includes as Exhibit B
the form of Right Certificate.
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================================================================================
NEW JERSEY RESOURCES CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
-----------------
RIGHTS AGREEMENT
Dated as of July 31, 1996
================================================================================
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TABLE OF CONTENTS
Section Page
- ------- ----
1. Certain Definitions..........................................2
2. Appointment of Rights Agent.................................13
3. Issue of Right Certificates.................................13
4. Form of Right Certificates..................................17
5. Countersignature and Registration...........................19
6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right
Certificates............................................20
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights...............................22
8. Cancellation and Destruction of Right
Certificates............................................27
9. Reservation and Availability of Capital Stock ..............28
10. Preferred Stock Record Date.................................31
11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights...........................32
12. Certificate of Adjusted Purchase Price or
Number of Shares........................................54
13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.................................55
14. Fractional Rights and Fractional Shares.....................62
15. Rights of Action............................................65
16. Agreement of Right Holders..................................66
17. Right Certificate Holder Not Deemed a
Shareholder.............................................68
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18. Concerning the Rights Agent.................................69
19. Merger or Consolidation or Change of Name of
Rights Agent............................................70
20. Duties of Rights Agent......................................71
21. Change of Rights Agent......................................77
22. Issuance of New Right Certificates..........................79
23. Redemption..................................................80
23A. Exchange....................................................81
24. Notice of Certain Events....................................85
25. Notices.....................................................87
26. Supplements and Amendments..................................88
27. Successors..................................................90
28. Determinations and Actions by the Board of
Directors, etc..........................................90
29. Benefits of this Agreement..................................92
30. Severability................................................92
31. Governing Law...............................................94
32. Counterparts................................................94
33. Descriptive Headings........................................94
Exhibit A - Certificate of Amendment
Exhibit B - Form of Right Certificate and Election to
Purchase
Exhibit C - Form of Summary of Rights
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of July 31, 1996 (the
"Agreement"), between New Jersey Resources Corporation, a New Jersey corporation
(the "Company"), and The First National Bank Of Boston (the "Rights Agent"),
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one Right (as herein after defined) for each share of
Common Stock, par value $2.50 per share, of the Company outstanding at the Close
of Business (as hereinafter defined) on August 15, 1996 (the "Record Date"),
each Right representing the right to purchase one one-thousandth (1/1,000th) of
a share of Series A Junior Participating Cumulative Preferred Stock, par value
$100 per share, of the Company having the rights and preferences set forth in
the form of Certificate of Amendment attached hereto as Exhibit A, and has
further authorized the issuance of one Right with respect to each share of
Common Stock of the Company that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Expiration Date and the
Final Expiration Date (as such terms are hereinafter defined);
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NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 10% or more of the shares of Common Stock of
the Company then outstanding, but shall not include any employee
benefit plan of the Company or any Subsidiary of the Company or any
Person organized, appointed or established by the Company or such
Subsidiary for or pursuant to the terms of any such employee benefit
plan. Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person" as the
result of an acquisition of shares of Common Stock by the
Company which, by reducing the number of shares of Common
Stock outstanding, increases the proportionate number of
shares Beneficially Owned by such Person to 10% or more of
the shares of Common Stock of the Company then outstanding,
provided, however, that if a Person shall become the
Beneficial Owner of 10% or more
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of the shares of Common Stock of the Company by reason of
share purchases by the Company and shall, after such share
purchases by the Company, at a time when such Person
Beneficially Owns 10% or more of the Common Stock, become the
Beneficial Owner of any additional shares of Common Stock of
the Company, then such Person shall be deemed to be an
"Acquiring Person";
(ii) if the Board of Directors of the Company determines
in good faith that a Person who would otherwise be an
"Acquiring Person" has be come such inadvertently (including,
without limitation, because (A) such Person was unaware that
he or it Beneficially Owned a percentage of Common Stock that
would otherwise cause such Person to be an "Acquiring Person"
or (B) such Person was aware of the extent of his or its
Beneficial Ownership but had no actual 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 him self or itself
of Beneficial Ownership of a sufficient number of shares of
Common Stock so that such Person would no longer be an
"Acquiring
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Person", then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this
Agreement; and
(iii) no Person shall become an "Acquiring Person" by
virtue of ownership of Common Stock of the Company by any
Affiliate and/or Associate of such Person, which Affiliate
and/or Associate is deemed to be an Affiliate and/or Associate
of such Person solely by reason of such Affiliate and/or
Associate being a director or officer of the Company.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate", when used with reference to
any Person, shall have the respective meanings ascribed to such terms
in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on
the Record Date.
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote
or dispose of,
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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 if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy given to such Person in response
to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report);
(ii) which such Person or any of such Person's Affiliates
or Associates has the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise, provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, (A) securities tendered pursuant to a
tender or exchange offer made by or on behalf of
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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 either a Section
11(a)(ii) Event or a Section 13 Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence
of either a Section 11(a)(ii) Event or a Section 13 Event,
which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any
Original Rights; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in subparagraph (i) of this
paragraph (d)) or disposing of any securi-
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ties of the Company in a manner that relates or is reasonably
likely potentially to relate to influencing the control or
management of the Company;
provided, however, that nothing in this paragraph (d) shall cause a
person engaged in business as an under writer of securities to be the
Beneficial Owner of, or to beneficially own, any securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New
Jersey are authorized or obligated by law or executive order to close.
(f) "Certificate of Amendment" shall mean the Certificate of
Amendment of Junior Participating Cumulative Preferred Stock setting
forth the powers, preferences, rights, qualifications, limitations and
restrictions of such series of preferred stock of the Company, a form
of which is attached hereto as Exhibit A.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Trenton, New Jersey time, on such date; provided, however, that
if such date is not a Business
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Day, it shall mean 5:00 P.M., Trenton, New Jersey time, on the next
succeeding Business Day.
(h) "Common Stock" when used with reference to the Company
shall mean the Common Stock, par value $2.50 per share, of the Company.
"Common Stock" when used with reference to any Person other than the
Company which is organized in corporate form shall mean the capital
stock with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of
such Person, or, if such Person is a Subsidiary of another Person, the
capital stock with the greatest voting power of the Person which
ultimately controls such first-mentioned Person. "Common Stock" when
used with reference to any Person which is not organized in corporate
form shall mean units of beneficial interest which (i) shall represent
the right to participate generally in the profits and losses of such
Person (including, without limitation, any flow-through tax benefits
resulting from an ownership interest in such Person) and which (ii)
shall be entitled to exercise the greatest voting power of such Person
or, in the case of a limited partnership, shall have the power to
remove the general partner or partners.
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(i) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(j) "Company" shall have the meaning set forth in the first
paragraph of this Agreement.
(k) "Continuing Director" shall mean any member of the Board
of Directors of the Company (while such person is a member of such
Board of Directors) who either (i) was a member of such Board of
Directors prior to the Stock Acquisition Time or (ii) is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, or
a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and subsequently became a member of such Board
of Directors, and whose nomination for election or election thereto
was recommended or approved by a majority of the Continuing Directors
then on such Board of Directors.
(l) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(m) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning specified in
Section 3(a) hereof.
(o) "Equivalent Preference Stock" shall have the meaning set
forth in Section 11(b) hereof.
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(p) "Expiration Date" shall have the meaning specified in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning specified
in Section 7(a) hereof.
(r) "NASDAQ" shall have the meaning set forth in Section 11(d)
hereof.
(s) "Outside Directors" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(t) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(u) "Preferred Stock" shall mean shares of Series A Junior
Participating Cumulative Preferred Stock, par value $100 per share, of
the Company, having the rights, preferences and limitations set forth
in the form of Certificate of Amendment attached to this Agreement as
Exhibit A, and, to the extent there are not a sufficient number of
shares of Junior Participating Cumulative Preferred Stock authorized
to permit the full exercise of the then outstanding Rights, any other
series of preferred stock of the Company designated for such purpose
by the Board of Directors of the Company containing terms substantially
similar to the
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terms of the Series A Junior Participating Cumulative
Preferred Stock.
(v) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(w) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(x) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(y) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(z) "Right" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(aa) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(bb) "Rights Agent" shall have the meaning set forth in the
first paragraph of this Agreement.
(cc) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(dd) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(ee) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(ff) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
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(gg) "Stock Acquisition Time" shall mean the time of
occurrence of whichever of the following first occurs: (i) the first
public announcement by the Company or an Acquiring Person that the
Acquiring Person has become such, or (ii) the communication to the
Company (including, without limitation, to the directors of the
Company) of any notice (including, without limitation, any written
consent or notice related thereto) from an Acquiring Person indicating
or reflecting that the Acquiring Person has become such.
(hh) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions are at the time beneficially
owned, directly or indirectly, by such Person or otherwise controlled
by such Person.
(ii) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(jj) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(kk) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
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Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company 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. Any actions which may be taken by the Rights
Agent pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent.
Section 3. Issue of Right Certificates. (a) Until the earlier of
the Close of Business on (i) the tenth Business Day after the Stock Acquisition
Time, or (ii) the tenth Business Day, or such specified or unspecified later
date as may be determined by action of the Board of Directors of the Company,
after the date of the commencement of (as determined by reference to Rule
14d-2(a), as in effect under the Exchange Act on the Record Date), or first
public announcement of the intent of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or established by
the Company or such Subsidiary as a fiduciary pursuant to the terms of any such
employee benefit plan) to commence (which intention to commence remains in
effect for five Business Days after such announcement), a tender or exchange
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<PAGE> 17
offer for an amount of Common Stock of the Company which, together with the
shares of such stock already owned by such Person, constitutes 10% or more of
the outstanding Common Stock of the Company (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights) (the
earlier of such dates described in clauses (i) and (ii) above being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for shares of Common Stock registered in the names of the holders
of Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) 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 Common Stock. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first class, insured,
postage-prepaid mail, to each record holder of 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 for each share of
Common Stock so held, subject to adjustment as provided herein and to the
provisions of Section 14(a) here-
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<PAGE> 18
of. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit C (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 certificates for
Common Stock registered in the names of the holders of Common Stock with a copy
of the Summary of Rights attached thereto. Until the earliest of the
Distribution Date, the Expiration Date and the Final Expiration Date, the
surrender for transfer of any of the certificates for Common Stock outstanding
on the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
(c) Certificates for Common Stock issued (or delivered from the
Company's treasury) after the Record Date but prior to the earliest of the
Distribution Date, the
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<PAGE> 19
Expiration Date and the Final Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between New Jersey
Resources Corporation (the "Corporation") and The First National Bank
of Boston, dated as of July 31, 1996 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Corporation will
mail to the holder of this certificate a copy of the Rights Agreement
without charge promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
issued to an Acquiring Person or any Associate or Affiliate thereof (as
such terms are defined in the Rights Agreement) may be null and void.
The Rights shall not be exercisable, and shall be void so long as held,
by a holder in any jurisdiction where the requisite qualification for
the issuance to such holder, or the exercise by such holder of the
Rights in such jurisdiction, shall not have been obtained or be
obtainable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
16
<PAGE> 20
Section 4. Form of Right Certificates. (a) The Right Certificates
(and the forms of election to purchase shares, certification 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 Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 22 hereof, the Right
Certificates, whenever distributed, which are distributed in respect of shares
of Common Stock which were issued and outstanding as of the Record Date, shall
be dated as of the Record Date, and all Right Certificates which are distributed
in respect of other shares of Common Stock shall be dated as of the respective
dates of issuance of such Common Stock, and in each such case on their face
shall entitle the holders thereof to purchase such number of one one-thousandths
of a share of Preferred Stock as shall be set forth therein at the price per one
one-thousandth of a share of Preferred Stock set forth therein (the "Purchase
Price"), but the number and type of
17
<PAGE> 21
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided in this Agreement.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding (whether or not in
writing) which has as a primary purpose or effect the avoidance of the
provisions of Section 7(e), Section 11(a)(ii) or of Section 13 hereof with
respect to the limitation of the Rights beneficially owned by an Acquiring
Person (or any Associate or Affiliate thereof), and any
18
<PAGE> 22
Right Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend modified as necessary to apply to such Person:
The Rights represented by this Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights
Agreement). Accordingly, this Certificate and the Rights represented
hereby may become null and void in the circumstances specified in
Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company manually or by facsimile
signature by the Chairman of the Board, the President or any Vice President and
have affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or any Assistant Secretary, either manually or by
facsimile signature. The Right Certificates shall be countersigned by the Rights
Agent manually and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered
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<PAGE> 23
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right 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 in Boston, Massachusetts, 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 and certificate number 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 4(b) and 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Expiration Date and the Final Expiration Date,
any Right Certificate or Right Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certifi-
20
<PAGE> 24
cates, entitling the registered holder to purchase a like number of shares of
Preferred Stock (or other securities, cash, and/or 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, split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged, with the
form of assignment and certificate appropriately executed, at the principal
office of the Rights Agent in Boston, Massachusetts. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate or Right Certificates
until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate or Right Certificates and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall 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
21
<PAGE> 25
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of any Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will execute and deliver a new
Right Certificate of like tenor to the Rights Agent for counter-signature and
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) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent in Boston, Massa-
22
<PAGE> 26
chusetts, together with payment of the Purchase Price for each one
one-thousandth of a share of Preferred Stock as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of Business on August
14, 2006 (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
are exchanged as provided in Section 23A hereof, or (iv) the time at which the
Rights expire pursuant to Section 13(d) hereof (the earliest of such times being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock issued pursuant to the exercise of a Right shall initially be
$55, 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 (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and certificate duly executed,
accompanied by payment (by certified check or bank draft payable to the order of
the Company) of the Purchase Price for the Preferred Stock (or other shares,
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
23
<PAGE> 27
the Rights pursuant hereto in cash, or by certified check or bank draft payable
to the order of the Company, the Rights Agent shall, subject to Section 20(k)
hereof, (i)(A) promptly requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the number of shares of Preferred Stock to be purchased (and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests), or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-thousandth 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 hereby directs the
depositary agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and
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<PAGE> 28
(iv) when appropriate, after receipt, promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the event that the
Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of any such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after such Acquiring Person
becomes such, or (iii) a transferee of any such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior
25
<PAGE> 29
to or concurrently with such Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
such Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or any other Person
as a result of its failure to make any determination with respect to an
Acquiring Person or any of its respective Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of any Right Certificate upon the
occurrence of any purported transfer or exercise as set forth in this
26
<PAGE> 30
Section 7 unless such registered holder shall have (i) completed and signed the
certificate following the form of assignment or election to purchase set forth
on the reverse side of the Right Certificate surrendered for such assignment or
exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in
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<PAGE> 31
such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock or any
authorized and issued shares of Preferred Stock held in its treasury (and will
use its best efforts, following the occurrence of a Section 11(a)(ii) Event, to
cause to be reserved and kept available out of its authorized and unissued
shares of Common Stock and/or other securities or out of its authorized and
issued shares of Common Stock and/or other securities held in its treasury), the
number of shares of Preferred Stock (and, following the occurrence of a Section
11(a)(ii) Event, Common Stock and/or other securities) that will be sufficient
to permit the exercise in full of all outstanding Rights.
(b) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act of 1933, as
28
<PAGE> 32
amended (the "Act"), with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The Company
may, acting by resolution of its Board of Directors, temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(b), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction
29
<PAGE> 33
unless the requisite qualification in such jurisdiction shall have been
obtained.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-thousandths of a share of
Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event,
Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any shares of Preferred Stock (or shares of 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 Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts for a
number of one one-hundredths of a share of Preferred Stock (or shares of Common
Stock and/or other securities, as the case may be), in a name other than that
of, the registered holder of the
30
<PAGE> 34
Right Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates for shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) or depositary receipts for Preferred Stock
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificate for a number of one one-thousandths of a share of Preferred
Stock (or shares of Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of shares of Preferred Stock (or shares of Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the 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 (or
shares of Common Stock and/or other securities, as the case may be) transfer
books of the Company are closed, such person shall be deemed to have become
31
<PAGE> 35
the record holder of such shares (fractional and otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or shares of Common Stock and/or other securities, as the case
may be) transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate, as such, shall not
be entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
meetings or other proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares,
or fractions thereof, covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock into a
greater number of shares, (C) combine or consolidate the outstanding
32
<PAGE> 36
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 Section 7(e) hereof and this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification.
If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i)
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<PAGE> 37
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that any Person, alone
or together with its Affiliates and Associates, shall become an Acquiring
Person, unless the event causing such Person to become an Acquiring Person is a
Section 13 Event or is an acquisition of Common Stock of the Company pursuant to
a tender or exchange offer for all outstanding Common Stock of the Company at a
price and on terms determined by at least a majority of the members of the Board
of Directors of the Company who are not Acquiring Persons or representatives,
nominees, Affiliates or Associates of an Acquiring Person (the "Outside
Directors"), after receiving advice from one or more investment banking firms,
to be (A) at a price which is fair to shareholders (taking into account all
factors which such Outside Directors deem relevant, including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were to be sold on an orderly basis designed to realize maximum value)
and (B) otherwise in the best interests of the Company and its shareholders,
then proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof), shall thereafter have the right to
receive, upon exercise thereof following the Distribution Date at the then
current Purchase Price in accor-
34
<PAGE> 38
dance with the terms of this Agreement, in lieu of a number of one-thousandths
of a share of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of such Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the Current Market Price
per share of the Common Stock of the Company (determined pursuant to Section
11(d) hereof) on the date of the occurrence of such Section 11(a)(ii) Event
(such number of shares being hereinafter referred to as the "Adjustment
Shares"). The Company shall notify the Rights Agent as to any Persons who are
deemed by the Company to be Acquiring Persons or Associates, Affiliates or
transferees (as described in subparagraphs (ii) and (iii) of Section 7(e)
hereof) of such Persons and shall identify any Rights pertaining thereto.
(iii) In lieu of issuing shares of Common Stock of the Company in
accordance with Section 11(a)(ii) hereof, the Company, acting by resolution of
its Board of Directors (which resolution shall be effective only with the
concur-
35
<PAGE> 39
rence of a majority of the Continuing Directors), may (and, in the event that
the number of shares of Common Stock which are authorized by the Company's
Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof, the
Company, acting by resolution of its Board of Directors (which resolution shall
be effective only with the concurrence of a majority of the Continuing
Directors), shall): (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value"), over (2) the
Purchase Price attributable to each Right (such excess, the "Spread") and (B)
with respect to each Right (subject to Section 7(e) hereof), make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the Board of
Directors of the Company (with the concurrence of a majority of the Continuing
Directors) has deemed to have the same value as shares of Common Stock of the
Company (such shares or units of preferred stock hereinafter called "Common
Stock Equivalents")), (4) debt securities of the Company, (5) other
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<PAGE> 40
assets, or (6) any combination of the foregoing having an aggregate value equal
to the Current Value, where such aggregate value has been determined by action
of the Board of Directors of the Company (with the concurrence of a majority of
the Continuing Directors) based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the Company which
has theretofore performed no services for the Company or any Subsidiary of the
Company in the past five years; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the first date that the right to redeem the Rights
pursuant to Section 23 hereof, as such date may be amended pursuant to Section
26 hereof, shall expire (the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock of the Company (to the
extent available) and then, if necessary, cash, securities and/or assets, that
in the aggregate have a value equal to the Spread. If, after the occurrence of a
Section 11(a)(ii) Event, the number of shares of Common Stock that are
authorized by the Company's Certificate of Incorporation
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<PAGE> 41
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit exercise in full of the
Rights in accordance with Section 11(a)(ii) hereof and the Company, acting by
resolution of its Board of Directors (which resolution shall be effective only
with the concurrence of a majority of the Continuing Directors), shall determine
in good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek shareholder approval for the authorization of
such additional shares (such period as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some action is to be
taken pursuant to the terms of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek such
shareholder approval for the authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to the first sentence
of this Section 11(a)(iii) and to determine the value thereof.
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<PAGE> 42
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 Common Stock (as
determined pursuant to Section 11(d) hereof) on the date of the first occurrence
of the Section 11(a)(ii) Event, and the per share or per unit value of any
Common Stock Equivalents shall be deemed to equal the Current Market Price per
share of the Common Stock of the Company on such date.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of shares 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 shares of Preferred Stock
("Equivalent Preference Stock")) or securities convertible into shares of
Preferred Stock or Equivalent Preference Stock at a price per share of Preferred
Stock or Equivalent Preference Stock (or having a conversion price per share, if
a security convertible into shares of Preferred Stock or Equivalent Preference
Stock) less than the Current Market Price per share of the
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<PAGE> 43
Preferred Stock (as defined in Section 11(d) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preference Stock which the aggregate offering
price of the total number of such 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 outstanding on such record date plus the
number of additional shares of Preferred Stock and/or Equivalent Preference
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid 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 (with the
concurrence of a majority of the Continuing Directors), whose determination
shall be described in a statement filed with the Rights Agent. Preferred Stock
owned by or held for the account of the Company shall not be
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<PAGE> 44
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price 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 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
or assets (other than a regular periodic cash dividend at a rate not in excess
of 125% of the rate of the last regular periodic cash dividend theretofore paid
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 (as defined in Section 11(d) hereof) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, with the concurrence of a majority of the Continuing Directors, whose
determination shall be described
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<PAGE> 45
in a statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Preferred Stock, and the denominator of
which shall be such Current Market Price per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the "Current
Market Price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the Current Market Price
per share of Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (a) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into such Common Stock or (b) any subdivision,
combination or reclassification of such Common Stock, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such
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<PAGE> 46
subdivision, combination or reclassification, as the case may be, then, and in
each such case, the "Current Market Price" shall be appropriately adjusted to
take into account the ex-dividend trading. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
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<PAGE> 47
shares of Common Stock selected by the Company, acting by resolution of the
Board of Directors of the Company (which resolution shall be effective only with
the concurrence of a majority of the Continuing Directors). If on any such date
no market maker is making a market in shares of Common Stock, the fair value of
such shares on such date as determined in good faith by the Company, acting by
resolution of the Board of Directors of the Company (which resolution shall be
effective only with the concurrence of a majority of the Continuing Directors),
shall be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange but are quoted on NASDAQ, a day on which NASDAQ is in operation or if
the shares of Common Stock are neither listed or admitted to trading on any
national securities exchange nor quoted on NASDAQ, a Business Day. If the
current per share market price of the Common Stock cannot be determined in the
manner provided above, or if the Common Stock is not publicly held or not so
listed or traded, "Current Market Price" per share of Common Stock shall mean
the fair value per share as determined in good faith by the Company, acting by
resolution of the Board of
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<PAGE> 48
Directors of the Company (which resolution shall be effective only with the
concurrence of a majority of the Continuing Directors), whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share of Preferred Stock shall be determined in the same
manner as set forth for the Common Stock in Section 11(d)(i) hereof (other than
the last sentence thereof). If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described in Section
11(d)(i) hereof, the "Current Market Price" per share of Preferred Stock shall
be conclusively deemed to be an amount equal to 1,000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement) multiplied by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is publicly held or
so listed or traded, the "Current Market Price" per share of Preferred Stock
shall mean the fair value per share as determined in good faith by the Company,
acting by resolution of its Board of Directors (which resolution shall be
effective only with
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<PAGE> 49
the concurrence of a majority of the Continuing Directors), whose determination
shall be described in a statement filed with Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the "Current
Market Price" of one one-thousandth of a share of Preferred Stock shall be equal
to the "Current Market Price" of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or other share or the
nearest one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of 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) hereof, the holder of any Right thereafter exercised shall
become entitled to receive
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<PAGE> 50
any shares of capital stock of the Company other than Preferred Stock,
thereafter the Purchase Price and the number of such other shares so receivable
upon exercise of any Right and the number of Rights outstanding shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock
shall apply on like terms to any such other shares, provided, however, that the
Company shall not be liable for its inability or failure to reserve and keep
available for issuance upon exercise of the Rights pursuant to Section 11(a)(ii)
a number of shares of Common Stock greater than the number then authorized by
the Certificate of Incorporation of the Company but not outstanding or reserved
for any other purpose.
(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-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
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<PAGE> 51
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Section 11(b) and (c) hereof, 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-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth of a share of Preferred Stock) obtained by (i) multiplying (A) the
number of one one-thousandths of a share covered by a Right immediately prior to
such adjustment of the Purchase Price by (B) 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-thousandths 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-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right
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<PAGE> 52
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidenc-
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<PAGE> 53
ing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock, or fraction thereof, issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the one
one-thousandth of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Preferred Stock at such adjusted Purchase
Price.
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(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Stock, or a fraction thereof, and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company, acting by resolution of its Board of Directors
(which resolution shall be effective only with the concurrence of a majority of
the Continuing Directors), shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
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Stock, any issuance wholly for cash of any Preferred Stock at less than the
current market price, any issuance wholly for cash of Preferred Stock or
securities which by their terms are convertible into or exchangeable for
Preferred Stock, any stock dividends or any issuance of rights, options or
warrants referred to herein above in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with 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 or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or in a series of related transactions, assets, cash flow or earning
power aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or
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securities outstanding or agreements in effect that would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time after the date of
this Agreement and prior to the Distribution Date (i) declare or pay any
dividend on the Common Stock of the Company payable in such Common Stock or (ii)
subdivide the outstanding Common Stock of the Company into a greater number of
shares (by reclassification or otherwise than by payment of dividends in such
Common Stock) or (iii) combine or consolidate the outstanding Common Stock
53
<PAGE> 57
of the Company into a smaller number of shares, then in any such case, (x) the
number of one one-thousandths of a share of Preferred Stock purchasable after
such event upon proper exercise of each Right shall be determined by multiplying
the number of one one-thousandth of a share of Preferred Stock so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of shares of Common Stock of the Company outstanding immediately before
such event and the denominator of which is the number of shares of such Common
Stock outstanding immediately after such event and (y) action shall be taken
such that each share of Common Stock of the Company outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each share of such Common Stock outstanding immediately prior to such
event had issued with respect to it. The adjustments provided for in this
Section 11(p) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected. If an
event occurs which would require an adjustment under Section 11(a)(ii) hereof
and this Section 11(p), the adjustments provided for in this Section 11(p) shall
be in addition and prior to any adjustment required pursuant to Section
11(a)(ii) hereof.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made
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as provided in Sections 11 and 13 hereof, the Company shall (a) promptly prepare
a certificate setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Common Stock and Preferred Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25
of this Agreement. Notwithstanding the foregoing sentence, the failure of the
Company to make such certificates or give such notice shall not affect the
validity or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained. Any adjustment to be made pursuant to Sections
11 and 13 hereof shall be effective as of the date of the event giving rise to
such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event (a "Section 13 Event") that, following
the Stock Acquisition Time, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) and the Company shall
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<PAGE> 59
not be the surviving or continuing corporation of such merger, consolidation or
combination, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate with the
Company, or merge with and into the Company, and the Company shall be the
surviving or continuing corporation of such merger or consolidation and, in
connection therewith, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of the Company or of any Person or cash
or any other property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets, cash flow or earning power aggregating more than 50%
of the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole and calculated on the basis of the Company's most recent
regularly prepared financial statement) to any other Person or Persons (other
than the Company or any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(o) hereof), then, and in each such case
(except as provided in Section 13(d) hereof), proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided in Section 7(e)
hereof) shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance
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with the terms of this Agreement, such number of validly authorized and issued,
fully paid, nonassessable and freely tradable shares of Common Stock of the
Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of call, rights of first refusal or other adverse claims,
as shall be equal to the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
one one-thousandth of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by (B) 50% of the Current Market Price
per share of Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such merger, consolidation,
sale or transfer; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
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duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock in accordance
with Section 9 hereof) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be possible, in relation to its Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any
Section 13 Event. The Company shall not consummate any such merger,
consolidation, sale or transfer unless prior thereto the Company and such issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
containing the provisions required by this Section 13.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof, the Person that is
the issuer of any securities into which shares of Common Stock of the
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Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets, cash flow or earning
power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at any time and has not been continuously over the preceding twelve month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stock of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of shares of
authorized Common Stock which have
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<PAGE> 63
not been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement containing the provisions set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any such Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii)
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Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, this Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) hereof if (i) such transaction is
consummated with a Person or Persons who acquired Common Stock of the Company
pursuant to a tender offer or exchange offer for all outstanding Common Stock of
the Company which complies with the provisions of Section 11(a)(ii) hereof (or a
wholly owned Subsidiary of any such Person or Persons), (ii) the price per share
of Common Stock of the Company offered in such transaction is not less than the
price per share of Common Stock of the Company paid to all holders of Common
Stock of the Company whose shares were purchased pursuant to such tender offer
or exchange offer and (iii) the form of consideration being offered to the
remaining holders of Common Stock of the Company pursuant to such transaction is
the same as the form of consideration paid pursuant to such tender offer or
exchange offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
(e) The Company covenants and agrees that it will not, after
the Stock Acquisition Time, engage in any Sec-
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tion 13 Event if at the time of or after such event there are any charter or
by-law provisions or any rights, warrants or other instruments outstanding or
any other action taken which would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractions of Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York
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Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights (selected by the
Company, acting by resolution of its Board of Directors, which resolution shall
be effective only with the concurrence of a majority of the Continuing
Directors). If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Company, acting by resolution of its Board of Directors (which resolution
shall be effective only with the concurrence of a majority of the Continuing
Directors), shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandths of a share of Preferred Stock) upon exercise of the Rights
or to
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distribute certificates which evidence fractional shares (other than
fractions which are integral multiples of one one-thousandths of a share of
Preferred Stock). Fractions of Preferred Stock in integral multiples of one
one-thousandths of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock. In lieu of fractional shares which are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company may pay to the registered holders 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 current market value of one share of Preferred Stock.
For purposes of this Section 14(b), the current market value of a share of
Preferred Stock shall be the closing price of a share of Preferred Stock (as
determined pursuant to the second sentence of Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Section 11(a)(ii) Event or a
Section 13 Event, the Company
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shall not be required to issue fractions of shares of its Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of its Common Stock. In lieu of fractional shares of its Common Stock,
the Company may pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of its Common Stock. For
purposes of this Section 14(c), the current market value of one share of Common
Stock of the Company shall be the closing price of one share of Common Stock of
the Company (as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, except the rights of action vested in the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of Common Stock), without the consent of
the
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Rights Agent or of any holder of any other Right Certificate (or, prior to the
Distribution Date, of Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations hereunder, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting such Right consents and agrees with the Company and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for shares of Common Stock registered in
the name of the holders of such shares (which certificates for shares
of Common Stock shall also constitute certificates for Rights)
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and each Right will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates duly completed and fully executed;
(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) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason
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of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use
its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right or Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of one one-thousandth
of a share of Preferred Stock or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right or Right Certificate, as such, any of the
rights of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
24 hereof), or to
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receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Stock or Common Stock or for other
securities of the Company, instrument of assign-
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ment or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. The purchase of all or substantially all of the
Rights Agent's assets employed in the performance of transfer agent activities
shall be deemed a merger or consolidation for purposes of this Section 19. In
case at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have been countersigned
but not
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delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of
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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
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of an
Acquiring Person and the determination of the Current Market Price per
share of Preferred Stock and Common Stock) be proved or established by
the Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by
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it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except as to its countersignature
thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any adjustment required under the provisions of Sections 11 or 13
hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would
require any such
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adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment), nor
shall it be responsible for any determination by the Board of Directors
of the Company (with the concurrence of a majority of the Continuing
Directors) of the Current Market Price of the Rights or Preferred Stock
or Common Stock, nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock or other securities to
be issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Preferred Stock or Common Stock or other
securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman
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of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity, except it may not act for an
Acquiring Person in an investment banking capacity, or otherwise assist
an Acquiring Person in ways hostile to the Company, without the consent
of the Company.
(i) The Rights Agent may execute and exercise any of the
rights and powers hereby vested in it or perform any duty hereunder
either itself or by or through its
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attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or to
holders of the Rights resulting from any such act, omission, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer
without first consulting with the Company.
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Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and Preferred Stock by registered, certified
or express mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock and
Preferred Stock by registered, certified or express mail, and to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or
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by such a court, shall be a corporation organized and doing business under the
laws of the United States or of any state of the United States, in good
standing, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and Preferred Stock, and mail a
notice thereof in writing to the registered 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.
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Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by resolution of its Board of
Directors (which resolution shall, if adopted after the Stock Acquisition Time,
be effective only with the concurrence of a majority of the Continuing
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 Agreement. In addition, in connection with the issuance or sale of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures hereinafter issued by the Company,
and (b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company (with the concurrence of a majority of the
Continuing Directors), issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no
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such Right Certificates shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificates would be issued, and (ii) no such Right
Certificates shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption (a) The Company may, by resolution of
its Board of Directors, at its option, at any time prior to the earlier of (x)
the Stock Acquisition Time or (y) the Close of Business on the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right (payable in cash, shares of Common Stock
(based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors of the Company), appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights (or at such time subsequent to
such action as the Board of Directors may determine), and without any further
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action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase any Rights
at any time in any manner other than that specifically set forth in this Section
23, and other than in connection with the repurchase of Common Stock of the
Company prior to the Distribution Date.
Section 23A. Exchange. (a) The Board of Directors of
the Company may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
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provisions of Section 7(e)) for Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
wholly owned Subsidiary of the Company, any employee benefit plan of the Company
or any such Subsidiary, or any entity holding Common Stock as a fiduciary for or
pursuant to the terms of any such employee benefit plan), 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 action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 23A, evidence of which shall have been filed with the Rights Agent,
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of
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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
shall promptly mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 23A, the Company,
at its option, may substitute shares of Preferred Stock (or any other series of
preferred stock of the Company containing terms substantially similar to the
terms of the Preferred Stock) for some or all of the shares of Common Stock
exchangeable for Rights, at the initial rate of one one-thousandth of a share of
Preferred Stock (or of such other series of preferred stock of the Company) for
each share of Common Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Stock
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pursuant to the terms thereof, so that the fraction of a share of Preferred
Stock (or of such other series of preferred stock of the Company) delivered in
lieu of each share of Common Stock shall have the same voting rights as one
share of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock or Preferred Stock (or any other series of preferred stock of the
Company containing terms substantially similar to the terms of the Preferred
Stock) issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 23A, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock or Preferred Stock (or such other series of preferred
stock of the Company) for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Stock or to distribute certificates which evidence fractional Common
Stock. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For
the purposes of this paragraph (d), the current market value of a whole share of
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Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
23A.
Section 24. Notice of Certain Events. (a) In case the Company
shall propose (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Stock or to make any other distribution to the holders
of its Preferred Stock (other than a regular quarterly dividend out of earnings
on retained earnings of the Company at a rate not in excess of 125% of the rate
of the last regular quarterly cash dividend theretofore paid), or (ii) to offer
to the holders of Preferred Stock options, rights or warrants to subscribe for
or to purchase any additional Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (iii) to effect any reclassification
of the Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
merger, consolidation or other combination into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets, cash flow or earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person, or (v) to
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effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right, in accordance with
Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, merger, consolidation,
combination, sale, transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of 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 twenty days prior to the record date for determining holders of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of Common Stock and/or Preferred
Stock, whichever shall be the earlier. The failure to give notice required by
this Section 24 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 of the events set forth in Section 11(a)(ii)
or Section 13(a) of this Agreement shall occur, then, in any such case, (i) the
Company shall as soon
86
<PAGE> 90
as practicable thereafter give to each holder of a Right Certificate, to the
extent feasible and in accordance with Section 25, 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) or Section 13(a) hereof, and (ii) all
references in Section 24(a) hereof to Preferred Stock shall be deemed thereafter
to refer also to Common Stock or other securities issuable in respect of the
Rights.
Section 25. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the holder of any
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:
New Jersey Resources Corporation
1415 Wyckoff Road
Wall, New Jersey 07719
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
87
<PAGE> 91
(until another address is filed in writing with the Company) as follows:
The First National Bank of Boston
150 Royall Street
Mail Stop 45-02-62
Canton, MA 02021
Attention: Valerie Gray, Shareholders Services Division
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or if prior
to the Distribution Date to each holder of a certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such Right holder (or if prior to the Distribution
Date to such holder of Common Stock) at the address of such holder as shown on
the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Stock
Acquisition Time and subject to the penultimate sentence of this Section 26, the
Company may, by resolution of its Board of Directors, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect whatsoever (including, without limitation, any
extension of the period in which the Rights may be redeemed) without the
approval of any holders of certificates representing shares of Common Stock of
the Company. From and after the Stock Acquisition Time and subject to the
penultimate sentence of this Section 26, without the approval of any holders of
certificates representing shares of Common Stock of the Com-
88
<PAGE> 92
pany or of Right Certificates, the Company may, by resolution of its Board of
Directors (which resolution shall be effective only with the concurrence of a
majority of the Continuing Directors, and only if the Continuing Directors
constitute a majority of the number of directors then in office), and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement in
order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement or make any other provisions in any manner which
the Company may deem necessary or desirable, which shall not adversely affect
the interests of, or diminish substantially or eliminate the benefits intended
to be afforded by the Rights to, the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of any such Person); provided,
however, that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed or to modify the ability (or inability) of the Board
of Directors of the Com-
89
<PAGE> 93
pany to redeem the Rights, in either case 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 or the benefits to
the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of any such Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of one one-thousandth of a share of Preferred Stock for
which a Right is exercisable. Prior to the Stock Acquisition Time, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock."
Section 27. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
90
<PAGE> 94
Section 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
(with, where specifically provided for herein, the concurrence of the Continuing
Directors or the Outside Directors) shall have the exclusive power, authority
and discretion to administer this Agreement and to exercise all rights and
powers specifically granted to such Board of Directors (with, where specifically
provided for herein, the concurrence of the Continuing Directors or the Outside
Directors), or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including, but
not limited to, a determination to redeem or not redeem the Rights, to amend the
Agreement or to find or to announce publicly that any Person has become an
Acquiring Person). All such actions, calculations,
91
<PAGE> 95
interpretations and determinations (including, for purposes of clauses (i)
and (iii) below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors of the Company (with, where specifically provided
for herein, the concurrence of the Continuing Directors or the Outside
Directors), the Outside Directors or the Company (i) shall be within the
discretion of the Board of Directors or the Outside Directors, (ii) shall be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and (iii) shall not subject the
Board of Directors of the Company, the Continuing Directors or the Outside
Directors to any liability to the holders of the Rights and Right Certificates.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
92
<PAGE> 96
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company (with the concurrence of a majority of the Continuing
Directors) 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
Business Day following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provision of this Agreement requiring
that a determination be made by the Board of Directors with the concurrence of a
majority of the Continuing Directors or Outside Directors or by the Outside
Directors is held by a court of competent jurisdiction or other authority to be
invalid, void, or unenforceable, such determination shall then
93
<PAGE> 97
be made by the Board of Directors in accordance with applicable law and the
Company's certificate of incorporation and by-laws.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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<PAGE> 98
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
NEW JERSEY RESOURCES
CORPORATION
By /s/ Glenn C. Lockwood
-------------------------------
Name: Glenn C. Lockwood
Title: Senior Vice President
and Chief Financial Officer
THE FIRST NATIONAL BANK
OF BOSTON
By /s/ James J. Robinson
-------------------------------
Name: James J. Robinson
Title: Managing Director
95
<PAGE> 99
Exhibit A
NEW JERSEY RESOURCES CORPORATION
CERTIFICATE OF AMENDMENT
OF RESTATED CERTIFICATE OF INCORPORATION
Pursuant to the provisions of Section 14A:7-2(2) of the New Jersey
Business Corporation Act, the undersigned Corporation executes the following
Certificate of Amendment to its Restated Certificate of Incorporation.
1. The name of the Corporation is NEW JERSEY RESOURCES CORPORATION.
2. The following resolution, establishing and designating a series of
shares and fixing and determining the relative rights and preferences thereof
was duly adopted by the Board of Directors of the Corporation on the 31st day of
July, 1996, pursuant to authority vested in it by the Restated Certificate of
Incorporation:
"RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of
its Restated Certificate of Incorporation (the "Restated Certificate"),
a series of Preferred Stock of the Corporation be, and it hereby is,
created, and that the designation and amount thereof and the voting
powers, preferences and relative participating, optional and other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount.
The shares of such series shall be designated as Series A
Junior Participating Cumulative Preferred Stock, par value $100 per
<PAGE> 100
share (the "Junior Preferred Stock") and the number of shares
constituting such series shall be 50,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Junior
Preferred Stock to a number less than the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants
or upon the conversion of any outstanding securities issued by the
Corporation convertible into Junior Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and
superior to the Junior Preferred Stock with respect to dividends, the
holders of shares of Junior Preferred Stock, in preference to the
holders of Common Stock, and of any other junior stock which may be
outstanding, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of January, April,
July and October in each year (each such date being referred to herein
as 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 Junior Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $2.50 per
share ($10.00 per annum), or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock 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 Junior Preferred Stock. In the
event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect
2
<PAGE> 101
a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which
holders of shares of Junior Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount 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) The Corporation shall declare a dividend or distribution
on the Junior Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $2.50 per share ($10.00 per annum) on the
Junior Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Junior Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends or such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for
the determination of holders of shares of Junior Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall accu-
3
<PAGE> 102
mulate but shall not bear interest. Dividends paid on the shares of
Junior 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. The Board of Directors may fix a record date for
the determination of holders of shares of Junior Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights.
The holders of shares of Junior Preferred Stock shall have the
following voting rights.
(A) Each share of Junior Preferred Stock shall entitle the
holder thereof to 1 vote on all matters submitted to a vote of the
shareholders of the Corporation.
(B) Except as otherwise provided herein, in the Restated
Certificate, in any other certificate of amendment creating a series of
preferred stock or any similar stock, or by law, the holders of shares
of Junior Preferred Stock and the holders of shares of Common Stock and
any other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) If at any time the Corporation shall not have declared and
paid all accrued and unpaid dividends on the Junior Preferred Stock as
provided in Section 2 hereof for four consecutive Quarterly Dividend
Payment Dates, then, in addition to any voting rights provided for in
paragraphs (A) and (B), the holders of the Junior Preferred Stock shall
have the exclusive right, voting separately as class, to elect two
directors on the Board of Directors of the Corporation (such directors,
the "Preferred Directors"). The right of the holders of the Junior
Preferred Stock to elect the Preferred Directors shall continue until
4
<PAGE> 103
all such accrued and unpaid dividends shall have been paid. At such
time, the terms of any of the Preferred Directors shall terminate. At
any time when the holders of the Junior Preferred Stock shall have thus
become entitled to elect Preferred Directors, a special meeting of
shareholders shall be called for the purpose of electing such Preferred
Directors, to be held within 30 days after the right of the holders of
the Junior Preferred Stock to elect such Preferred Directors shall
arise, upon notice given in the manner provided by law or the by-laws
of the Corporation for giving notice of a special meeting of
shareholders (provided, however, that such a special meeting shall not
be called if the annual meeting of shareholders is to convene within
said 30 days). At any such special meeting or at any annual meeting at
which the holders of the Junior Preferred Stock shall be entitled to
elect Preferred Directors, the holders of a majority of the then
outstanding Junior Preferred Stock present in person or by proxy shall
be sufficient to constitute a quorum for the election of such
directors. The persons elected by the holders of the Junior Preferred
Stock at any meeting in accordance with the terms of the preceding
sentence shall become directors on the date of such election.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Junior Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends or, make any other distributions
on any shares or stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding-up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding-up) with
5
<PAGE> 104
the Junior Preferred Stock except dividends paid ratably on the Junior
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;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding-up) with the
Junior Preferred Stock, provided that the corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding-up)
to the Junior Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Junior Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding-up) with the Junior Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by
the Board of Directors) 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 classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares.
Any shares of Junior Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever, shall be retired
and cancelled promptly after the acquisition thereof.
6
<PAGE> 105
All such shares shall upon their cancellation become authorized but
unissued shares of preferred stock, without designation as to series,
and may be reissued as part of a new series of preferred stock to be
created by resolution or resolutions of the Board of Directors, subject
to the conditions and restrictions on issuance set forth herein, in the
Restated Certificate, in any other certificate of amendment creating a
series of preferred stock or any similar stock or as otherwise required
by law.
Section 6. Liquidation, Dissolution or Winding-Up.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, no distribution shall be made (A) to the
holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding-up) to the Junior Preferred
Stock unless prior thereto, the holders of shares of Junior Preferred
Stock shall have received the higher of (i) $10.00 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 (ii) an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount to be
distributed per share to holders of Common Stock; nor shall any
distribution be made (B) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding-up)
with the Junior Preferred Stock, except distributions made ratably on
the Junior Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding-up. In the
event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which
holders of shares of Junior Preferred Stock are enti-
7
<PAGE> 106
tled immediately prior to such event under the provision in clause (A)
of the preceding sentence shall be adjusted by multiplying such amount
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. Consolidation, Merger, etc.
In case the Corporation 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, or otherwise changed, then in any such case
each share of Junior Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times
the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
Junior Preferred Stock shall be adjusted by multiplying such amount 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 8. No Redemption.
The shares of Junior Preferred Stock shall not be redeemable.
Section 9. Rank.
8
<PAGE> 107
Unless otherwise provided in the Restated Certificate or a
certificate of amendment relating to a subsequent series of preferred
stock of the Corporation, the Junior Preferred Stock shall rank junior
to all other series of the Corporation'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 of the
Corporation.
Section 10. Amendment.
The Restated Certificate, as amended and restated, shall not
be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Junior Preferred Stock so
as to affect them adversely without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Junior Preferred
Stock, voting together as a single series.
Section 11. Fractional Shares.
Junior Preferred Stock may be issued in fractions of a share
(in one one-thousandth (1/1,000) of a share and integral multiples
thereof) which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other
rights of holders of Junior Preferred Stock."
3. The resolution was adopted by the Board of Directors at a
meeting duly called and held on July 31, 1996, at which a quorum was present
throughout.
4. The Restated Certificate of Incorporation of the
Corporation is amended so that the designation and number of shares of the class
and series acted upon in the resolution, and the relative rights, preferences
and limi-
9
<PAGE> 108
tations of such class and series are as stated in the resolution.
IN WITNESS WHEREOF, this Certificate of Amendment is executed on behalf
of the Corporation by its President and attested by its Secretary this 31st day
of July 1996.
NEW JERSEY RESOURCES CORPORATION
By
----------------------------------
Laurence M. Downes
President
ATTEST:
By
--------------------------
Oleta J. Harden
Secretary
10
<PAGE> 109
Exhibit B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER AUGUST 14, 2006 OR EARLIER IF THE BOARD OF DIRECTORS
ORDERS THE REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS
HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH
JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
NEW JERSEY RESOURCES CORPORATION
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 July 31, 1996 (the "Rights Agreement"), between New
Jersey Resources Corporation, a New Jersey corporation (the "Company"), and The
First National Bank of Boston, a national banking association (the "Rights
- ------------------------
1. The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
<PAGE> 110
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Trenton, New Jersey time) on August 14, 2006, at the principal office of the
Rights Agent, or its successors as Rights Agent, one one-thousandth of a fully
paid nonassessable share of Series A Junior Participating Cumulative Preferred
Stock, par value $100 per share of the Company (the "Preferred Stock"), at a
purchase price of $55 per one one-thousandth of a share of Preferred Stock (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase and the Certificate contained therein duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of one-thousandths of a share of Preferred Stock which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per one
one-thousandth of a share of Preferred Stock set forth above, are the number and
Purchase Price as of August 15, 1996, based on the shares of Preferred Stock as
constituted at such date.
From and after the first occurrence of a Section 11(a)(ii)
Event (as defined in the Rights Agreement), if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
2
<PAGE> 111
Agreement), (ii) a transferee of any such Acquiring Person (or of any Associate
or Affiliate thereof) who becomes a transferee after such Acquiring Person (or
any Associate or Affiliate thereof) becomes such or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of such Acquiring
Person (or of any Associate or Affiliate thereof) who becomes a transferee prior
to or concurrently with such Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii) Event.
The Rights evidenced by this Right Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall not have been
obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-thousandth of a share of Preferred Stock or the number and
kind of other securities which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events, including Section 11(a)(ii) Events and
Section 13 Events (as defined in the Rights Agreement).
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This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, as it may be amended from
time to time, which terms, provisions and conditions are hereby incorporated
herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Right Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of one one-thousandth of a share 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
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<PAGE> 113
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at a
redemption price of $.01 per Right at any time prior to the earlier of (i) the
Stock Acquisition Time (as defined in the Rights Agreement) and (ii) the close
of business on the Expiration Date (as defined in the Rights Agreement). Subject
to the provisions of the Rights Agreement, the rights evidenced by this Right
Certificate may be exchanged in whole or part for shares of Common Stock or
fractional shares of Preferred Stock (or any other substantially similar series
of preferred stock of the Company).
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company in any respect whatsoever up
until the
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<PAGE> 114
Stock Acquisition Time and thereafter in certain respects which do not adversely
affect the interests of holders of Right Certificates (other than an Acquiring
Person or the Affiliates or Associates thereof).
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in 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.
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WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of __________, ____.
ATTEST: NEW JERSEY RESOURCES
CORPORATION
_________________________
Secretary By_________________________
Title:
Countersigned:
[Rights Agent]
By_______________________
Authorized Signatory
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<PAGE> 116
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________ hereby sells,
assigns and transfers unto ________________
_________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________________ Attorney,
to transfer the within Right Certificate on the books of the within named
Company, with full power of substitution. Dated:_____________, ____
___________________________
Signature
Signatures Guaranteed:
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
___________________________
Signature
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NOTICE
The signature to the foregoing Assignment 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.
9
<PAGE> 118
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To New Jersey Resources Corporation:
The undersigned hereby irrevocably elects to exercise
_______________ Rights represented by this Right Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of such Rights and requests
that certificates for such shares be issued in the name of:
Please insert social security or other identifying number
__________________________________________________________
(Please print name and address)
__________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
__________________________________________________________
(Please print name and address)
__________________________________________________________
Dated:__________________, ____
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<PAGE> 119
[Form of Election to Purchase -- continued]
___________________________
Signature
(Signature must conform in
all respects to name of
holder as specified on the
face of this Right
Certificate.)
Signature Guaranteed:
__________________________________________________________
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
___________________________
Signature
__________________________________________________________
NOTICE
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Rights Certificate.
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Exhibit C
NEW JERSEY RESOURCES CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 31, 1996, the Board of Directors of New Jersey
Resources Corporation (the "Company") declared a dividend distribution of one
Preferred Share Purchase Right (a "Right") for each outstanding share of Common
Stock, par value $2.50 per share, of the Company (the "Common Stock"). The
following is a summary of the terms of the Rights.
Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior Participating
Cumulative Preferred Stock, par value $100 per share, of the Company (the
"Preferred Stock") at a price of $55 per one one-thousandth of a share of
Preferred Stock, subject to adjustment (the "Purchase Price"). The description
and terms of the Rights are set forth in a Rights Agreement, dated as of July
31, 1996 (the "Rights Agreement"), between the Company and The First National
Bank of Boston, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate certificates
representing the Rights ("Right Certificates") will be distributed. The Rights
will separate from the Common Stock and a "Distribution Date" will occur upon
the earlier to occur of (i) ten days following the time (the "Stock Acquisition
Time") of a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") acquired, or obtained the right to
acquire, beneficial ownership of 10% or more of the outstanding Common Stock of
the Company and (ii) ten business days (or, if determined by the Board of
Directors (with the concurrence of a majority of the Continuing Directors (as
hereinafter defined)), a specified or unspecified later date) following the
commencement or announcement of an intention to make a tender offer or exchange
offer which, if successful, would cause the bidder to own 10% of more of the
outstanding Common Stock.
The Rights Agreement provides that, until the Distribution
Date, (i) the Rights will be transferred with and only with the Common Stock,
(ii) new Common Stock certificates issued after August 15, upon transfer or new
issuance of the Common Stock, will contain a notation incorporating
<PAGE> 121
the Rights Agreement by reference and (iii) the surrender for transfer of any of
the Common Stock certificates outstanding will also 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
Right Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on August 14, 2006, unless earlier redeemed or exchanged
by the Company as described below.
In the event that, after the Stock Acquisition Time, the
Company is acquired in a merger or other business combination transaction
(except certain transactions with a person who became an Acquiring Person as a
result of a tender offer described in the next succeeding paragraph) or 50% or
more of its assets, cash flow or earning power is sold, proper provision shall
be made so that each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction would have a market value (as defined in the Rights
Agreement) of two times the Purchase Price of the Right. In the event that,
after the Stock Acquisition Time, the Company were the surviving corporation of
a merger and its Common Stock were changed or exchanged, proper provision shall
be made so that each holder of a Right will thereafter have the right to receive
upon exercise that number of shares of common stock of the Company having a
market value of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring
Person (except pursuant to a tender offer for all outstanding Common Stock
determined to be at a fair price and otherwise in the best interests of the
Company and its shareholders by a majority of the Outside Directors), proper
provision shall be made so that each holder of a Right (other than the Acquiring
Person) will thereafter have the right to receive upon exercise that number of
shares of Common Stock (or, in certain circumstances, cash, a reduction in the
Purchase Price, Common Stock, other equity secu-
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<PAGE> 122
rities of the Company, debt securities of the Company, other property or a
combination thereof) having a market value (as defined in the Rights Agreement)
of two times the Purchase Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person (or an
affiliate, associate or transferee thereof) will be null and void. A person will
not be an Acquiring Person if the Board of Directors of the Company determines
that such person or group became an Acquiring Person inadvertently and such
person or group promptly divests itself of a sufficient number of shares of
Common Stock so that such person or group is no longer an Acquiring Person.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
Preferred Stock of certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of Preferred
Stock or (iii) upon the distribution to holders of Preferred Stock of evidences
of indebtedness or assets (excluding regular periodic cash dividends or
dividends payable in Preferred Stock) or of subscription rights or warrants
(other than those referred to above). The number of Rights and number of shares
of Preferred Stock issuable upon the exercise of each Right are also subject to
adjustment in the event of a stock split, combination or stock dividend on the
Common Stock.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock which may, upon the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time prior to the earlier of the Stock Acquisition Time
and the Expiration Date (as defined in the Rights Agreement), the Board of
Directors may redeem the
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<PAGE> 123
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 Redemption Price.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such Person of 50% or more of the outstanding shares
of Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights beneficially owned by such Person which have become void), in
whole or part, at an exchange ratio of one share of Common Stock per Right
(subject to adjustment). The Company, at its option, may substitute one
one-thousandth of a share of Preferred Stock (or other series of substantially
similar preferred stock of the Company) for each share of Common Stock to be
exchanged.
Each share of Preferred Stock purchasable upon exercise of the
Rights will have a minimum preferential dividend of $10 per year, but will be
entitled to receive, in the aggregate, a dividend of 1,000 times the dividend
declared on the shares of Common Stock. In the event of liquidation, the holders
of the shares of Preferred Stock will be entitled to receive a minimum
liquidation payment of $10 per share, but will be entitled to receive an
aggregate liquidation payment equal to 1,000 times the payment made per share of
Common Stock. Each share of Preferred Stock will have one vote, voting together
with the shares of Common Stock. In the event of any merger, consolidation or
other transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount and type of
consideration received per share of Common Stock. The rights of the shares of
Preferred Stock as to dividends and liquidation, and in the event of mergers and
consolidations, are protected by anti-dilution provisions.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, other than rights resulting from
such holder's ownership of shares of Common Stock, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to shareholders or to the Company, shareholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or other consideration) of
the Company or for common stock of the acquiring company as set forth above.
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<PAGE> 124
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors prior to the Stock Acquisition Time. After
such time, the provisions of the Rights Agreement may be amended by the Board of
Directors (only with the concurrence of a majority of the Continuing Directors)
in order to cure any ambiguity, to correct or supplement defective or
inconsistent provisions, to shorten or lengthen any time period under the Rights
Agreement, to make changes which do not adversely affect the interests of the
holders of Rights (excluding the interests of any Acquiring Person) or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
The term "Continuing Director" means (i) any member of the
Board of Directors of the Company who was a member of the Board prior to the
Stock Acquisition Time, and (ii) any person who is subsequently elected to the
Board, if such person is recommended or approved by a majority of the Continuing
Directors then on the Board of Directors, and such person is not an Acquiring
Person or an affiliate, associate, representative or nominee of an Acquiring
Person.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Form 8-A dated August 2,
1996. Copies of the Rights Agreement are available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, as it may
be amended from time to time, which is hereby incorporated herein by reference.
5
