SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
MDU RESOURCES GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 41-0423660
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(State of Incorporation or Organization) (IRS Employer
Identification No.)
Schuchart Building
918 East Divide Avenue
P.O. Box 5650
Bismarck, North Dakota 58506-5650
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(Address of principal executive offices) (Zip Code)
If this form relates to the registration If this form relates to the
of a class of securities pursuant to registration of a class of securities
Section 12(b) of the Exchange Act and pursuant to Section 12(g) of the
is effective pursuant to General Exchange Act and is effective pursuant
Instruction A.(c), please check the to General Instruction A.(d), please
following box. [X] check the following box. [ ]
Securities Act registration statement file number to which this form
relates: ________________
(If applicable)
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Preference Share Purchase Rights New York Stock Exchange
Pacific Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None.
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ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
Introduction
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On November 12, 1998, the Board of Directors of MDU Resources
Group, Inc. (the "Company") declared a dividend of one preference share purchase
right (a "Right") for each outstanding share of common stock, par value $3.33
per share, of the Company (the "Common Shares"). The dividend is payable on
December 1, 1998 (the "Record Date") to the stockholders of record on that date.
The description and terms of the Rights are set forth in an Agreement (the
"Agreement") between the Company and Norwest Bank Minnesota, N.A., as Rights
Agent (the "Rights Agent").
Purchase Price
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Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series B Preference Stock of the
Company, without par value (the "Preference Shares"), at a price of $125 per one
one-thousandth of a Preference Share (the "Purchase Price"), subject to
adjustment.
Flip-In
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In the event that any person or group of affiliated or
associated persons acquires beneficial ownership of 15% or more of the
outstanding Common Shares (an "Acquiring Person"), each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the
Right.
Flip-Over
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If the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, each
holder of a Right (other than Rights beneficially owned by Acquiring Person,
which will be void) will thereafter have the right to receive that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right.
Distribution Date
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The distribution date is the earlier of
(i) 10 days following a public announcement that a person or
group of affiliated or associated persons have acquired beneficial ownership of
15% or more of the outstanding Common Shares; or
(ii) 10 business days (or such later date as may be determined
by action of the Board of Directors of the Company prior to such time as any
person or group of affiliated
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persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the outstanding Common Shares.
Transfer and Detachment
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Until the Distribution Date, the Rights will be evidenced,
with respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate with a copy of the Summary of
Rights to Purchase Preference Shares (the "Summary of Rights") attached thereto.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
the Rights will be transferred with and only with the Common Shares, and
transfer of those certificates will also constitute transfer of these Rights.
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 Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
Exercisability
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The Rights are not exercisable until the Distribution Date.
The Rights will expire on December 31, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case, as described below.
Adjustments
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The Purchase Price payable, and the number of Preference
Shares or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution in the event of
stock dividends, stock splits, reclassifications, or certain distributions with
respect to the Preference Shares. The number of outstanding Rights and the
number of one one-thousandths of a Preference Share issuable upon exercise of
each Right are also subject to adjustment if, prior to the Distribution Date,
there is a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations or combinations
of the Common Shares. 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 Preference Shares will be issued
(other than fractions which are integral multiples of one one-thousandth of a
Preference Share, which may, at 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 Preference Shares on the last trading day prior
to the date of exercise.
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Preference Shares
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Preference Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preference Share will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to
an aggregate dividend of 1000 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preference Shares will be entitled
to a minimum preferential liquidation payment of $1000 per share but will be
entitled to an aggregate payment of 1000 times the payment made per Common
Share. Each Preference Share will have no vote except as otherwise provided by
Delaware Law or the Company's Certificate of Incorporation. Finally, in the
event of any merger, consolidation or other transaction in which Common Shares
are exchanged, each Preference Share will be entitled to receive 1000 times the
amount received per Common Share. These rights are protected by customary
antidilution provisions.
The value of the one one-thousandth interest in a Preference
Share purchasable upon exercise of each Right should, because of the nature of
the Preference Shares' dividend and liquidation rights, approximate the value of
one Common Share.
Exchange
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At any time after any person or group becomes an Acquiring
Person, and prior to the acquisition by such person or group of 50% or more of
the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by the Acquiring Person, which will
have become void), in whole or in part, at an exchange ratio of one Common
Share, or one one-thousandth of a Preference Share, per Right (subject to
adjustment).
Redemption
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At any time prior to any person or group becoming an Acquiring
Person, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time on such basis with
such conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of 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.
Amendments
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The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to not less
than the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons and (ii) 10%, except
that from and after such time as any person or group of affiliated or associated
persons becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
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Rights and Holders
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Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
Further Information
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The Agreement is attached hereto as an exhibit and is
incorporated herein by reference. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Agreement.
ITEM 2. EXHIBITS.
4.1. Rights Agreement, dated as of November 12, 1998, between MDU
Resources Group, Inc. and Norwest Bank Minnesota, N.A.,
including the form of Certificate of Designation of the
Preference Stock as Exhibit A, the form of Right Certificate
as Exhibit B and the Summary of Rights as Exhibit C.
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<PAGE>
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, thereunto duly authorized.
Dated: November 12, 1998
MDU RESOURCES GROUP, INC.
By:/s/ Martin A. White
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Martin A. White
President and Chief Executive Officer
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EXHIBIT LIST
Page No.
4.1. Rights Agreement, dated as of November 12, 1998, between MDU
Resources Group, Inc. and Norwest Bank Minnesota, N.A.,
including the form of Certificate of Designation of the
Preference Stock as Exhibit A, the form of Right Certificate
as Exhibit B and the Summary of Rights as Exhibit C.
EXHIBIT 4.1
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MDU RESOURCES GROUP, INC.
and
NORWEST BANK MINNESOTA, N.A
Rights Agent
Agreement
Dated as of November 12, 1998
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<PAGE>
TABLE OF CONTENTS
Page
Number
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Section 1. Definitions............................................ 1
Section 2. Appointment of Rights Agent............................ 6
Section 3. Issue of Right Certificates............................ 7
Section 4. Form of Right Certificates............................. 9
Section 5. Countersignature and Registration...................... 10
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates........................................... 11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights................................................. 12
Section 8. Cancellation and Destruction of Right Certificates..... 14
Section 9. Reservation and Availability of Preference Shares...... 14
Section 10. Preference Shares Record Date.......................... 17
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights.............................................. 17
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares................................................. 29
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.......................................... 30
Section 14. Fractional Rights and Fractional Shares................ 31
Section 15. Rights of Action....................................... 33
Section 16. Agreement of Right Holders............................. 34
Section 17. Right Certificate Holder Not Deemed a Stockholder...... 35
Section 18. Concerning the Rights Agent............................ 36
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.................................................. 36
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Section 20. Duties of Rights Agent................................. 37
Section 21. Change of Rights Agent................................. 40
Section 22. Issuance of New Right Certificates..................... 42
Section 23. Redemption............................................. 42
Section 24. Exchange............................................... 43
Section 25. Notice of Certain Events............................... 46
Section 26. Notices................................................ 47
Section 27. Supplements and Amendments............................. 48
Section 28. Successors............................................. 49
Section 29. Benefits of this Agreement............................. 49
Section 30. Severability........................................... 49
Section 31. Governing Law.......................................... 50
Section 32. Counterparts........................................... 50
Section 33. Descriptive Headings................................... 50
Signatures........................................................... 51
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preference Shares
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<PAGE>
Agreement, dated as of November 12, 1998, between MDU
Resources Group, Inc., a Delaware corporation (the "Company"), and Norwest Bank
Minnesota, N.A., as rights agent (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preference share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding on December 1,
1998 (the "Record Date"), each Right representing the right to purchase one
one-thousandth of a Preference Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding, but shall not include the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of an
<PAGE>
acquisition of Common Shares by the Company which, by reducing the number of
Common Shares of the Company outstanding, increases the proportionate number of
Common Shares of the Company beneficially owned by such Person to 15% or more of
the Common Shares of the Company then outstanding; provided, however, that, if a
Person shall become the Beneficial Owner of 15% or more of the Common Shares of
the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person shall be deemed to
be an "Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
(c) "Associate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
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(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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
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(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B) hereof) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of Minnesota are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., South St. Paul time, on such date; provided, however, that, if such date
is not a Business Day, it shall mean 5:00 P.M., South St. Paul time, on the next
succeeding Business Day.
(g) "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $3.33 per share, of the
Company. "Common Shares" when used with reference to any Person other than the
Company shall mean the capital stock (or
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<PAGE>
equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(j) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(k) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(l) "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.
(m) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(n) "Preference Shares" shall mean shares of Series B
Preference Stock, without par value, of the Company having the rights and
preferences set forth in the Form of Certificate of Designations attached to
this Agreement as Exhibit A.
(o) "Purchase Price" shall have the meaning set forth in
Section 4 hereof.
(p) "Record Date" shall have the meaning set forth in the
second paragraph hereof.
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(q) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(s) "Right" shall have the meaning set forth in the second
paragraph hereof.
(t) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(u) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(v) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
(w) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(x) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall, prior to the
Distribution Date, also be the holders of the Common Shares of the Company) in
accordance with the terms and conditions hereof, and the Rights
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<PAGE>
Agent hereby accepts such appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier
of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors of the Company prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares of the
Company for or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares of the Company for
or pursuant to the terms of any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares of the Company aggregating 15% or more of the
then outstanding Common Shares 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 being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares of the Company registered in the names of
the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares of the Company. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign,
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and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares of the Company 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 Common Share so held. 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 Preference
Shares, in substantially the form of Exhibit C hereto (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Shares 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 Shares of
the Company outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached thereto.
Until the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares of the Company 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 Shares of the Company represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date
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or 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 an Agreement between MDU Resources
Group, Inc. and Norwest Bank Minnesota, N.A., dated as of November 12,
1998, as it may be amended from time to time (the "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 MDU Resources
Group, Inc. Under certain circumstances, as set forth in the Agreement,
such Rights (as defined in the Agreement) will be evidenced by separate
certificates and will no longer be evidenced by this certificate. MDU
Resources Group, Inc. will mail to the holder of this certificate a
copy of the Agreement without charge after receipt of a written request
therefor. As set forth in the Agreement, Rights beneficially owned by
any Person (as defined in the Agreement) who becomes an Acquiring
Person (as defined in the Agreement) become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares of the Company
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares of the Company
represented thereby. In the event that the Company purchases or acquires any
Common Shares of the Company after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares of the Company shall be
deemed cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares of the Company which are
no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase Preference Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto, and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may
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<PAGE>
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
applicable rule or regulation made pursuant thereto or with any applicable rule
or regulation of any stock exchange or the National Association of Securities
Dealers, Inc., or to conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-thousandths of a Preference Share as shall be set forth
therein at the price per one one-thousandth of a Preference Share set forth
therein (the "Purchase Price"), but the number of such one one-thousandths of a
Preference Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chief Executive
Officer, its President, its Chief Operating Officer, any Executive Vice
President, Senior Vice President or Vice President, its Treasurer or any
Assistant Treasurer, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof, and shall be attested
by the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the individual 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
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any individual 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 Agreement any such
individual was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates
entitling the registered holder to purchase a like number of one one-thousandths
of a Preference Share 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 or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certifi-
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cate or Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) 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 on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-thousandth of a
Preference Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on December 31, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
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(b) The Purchase Price for each one one-thousandth of a
Preference Share purchasable pursuant to the exercise of a Right shall initially
be $125, and shall be subject to adjustment from time to time as provided in
Section 11 or 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 duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preference Shares certificates for the number of Preference Shares
to be purchased and the Company hereby irrevocably authorizes any such transfer
agent to comply with all such requests, or (B) requisition from the depositary
agent depositary receipts representing such number of one one-thousandths of a
Preference Share as are to be purchased (in which case certificates for the
Preference Shares represented by such receipts shall be deposited by the
transfer agent of the Preference Shares with such depositary agent) and the
Company hereby directs such 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 (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate.
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(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 to registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
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.
Section 9. Reservation and Availability of Preference Shares.
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preference Shares or any Preference
Shares held in its treasury the number of Preference Shares that will be
sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7 hereof.
The Company shall use its best efforts, as soon as practicable
following the earliest date after the first occurrence of an event described in
Sections 7(a), 11(a)(ii) or 24 on which
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the consideration to be delivered by the Company upon exercise of the Rights has
been determined pursuant to this Agreement, to obtain such regulatory approvals
as may be necessary for it to issue and/or sell securities purchasable upon the
exercise of the Right.
If, within 90 days after the date of exercise or the date of
the order of exchange (as the case may be, the "Trigger Date") of any Right or
such longer period of time as the Board of Directors has determined in good
faith (the "Approval Period"), the Company is unable to obtain any required
regulatory approval for the issuance of the Preference Shares, or if the Company
is otherwise unable to issue the Preference Shares under the terms of its
Certificate of Incorporation or for any other reason, then the Company shall,
subject to compliance with applicable laws, substitute for the Preference Shares
otherwise issuable upon exercise of the Right (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares or other equity securities of the Company
(including without limitation shares or units of shares of preferred stock
and/or preference stock), except to the extent that the Company has not obtained
any necessary regulatory approval for such issuance, (4) debt securities of the
Company, except to the extent that the Company has not obtained any necessary
regulatory approval for such issuance, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the "current per share
market price" (as determined pursuant to Section 11(d)(ii) hereof) of the
Preference Shares for which such Right is otherwise exercisable or exchangeable,
where such aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company.
Notwithstanding any provision of this Agreement to the
contrary, the Rights (a) shall not be exercisable pursuant to Section 7 or
Section 11(a)(ii) or exchanged pursuant to Sec-
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tion 24 until any regulatory approvals required for the issuance and/or sale of
securities upon such exercise have been obtained (except, in accordance with the
previous paragraph, to the extent the Board of Directors can no longer determine
in good faith the appropriateness of further extension of the Approval Period
and, in such case, only to the extent permitted by applicable laws), and (b)
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained or the exercise thereof shall not
be permitted under applicable law.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preference Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
Preference Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
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 Preference Shares (or other assets, cash or other debt or equity
securities (as the case may be, "Other Securities") if any) 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 the Preference Shares (or Other Securities, if any)
in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Preference Shares (or Other Securities,
as the case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such
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Right Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is due.
Section 10. Preference Shares Record Date. Each Person in
whose name any certificate for Preference Shares (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 the Preference Shares (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 Preference Shares (or Other Securities, as
the case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preference Shares (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 shall not be entitled to any rights of a holder of
Preference Shares (or Other Securities, as the case may be) for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preference Shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
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(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preference Shares payable
in Preference Shares, (B) subdivide the outstanding Preference Shares, (C)
combine the outstanding Preference Shares into a smaller number of Preference
Shares or (D) issue any shares of its capital stock in a reclassification of the
Preference Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preference Shares transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 hereof, in the event any Person
becomes an Acquiring Person, each holder of a Right, except as provided below,
shall thereafter have a right to receive, upon exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one
one-thousandths of a Preference Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preference Shares,
such number of
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Common Shares of the Company as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-thousandths
of a Preference Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares of the Company (determined pursuant to Section 11(d) hereof) on the date
of the occurrence of such event. In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company shall not
take any action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
Notwithstanding the foregoing, from and after the occurrence
of such event, any Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall
be void, and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Right Certificate
shall be issued pursuant to Section 3 hereof that represents Rights beneficially
owned by an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the Rights Agent
for transfer to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with subparagraph (ii) or, if any
regulatory approvals necessary for the issuance of such
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Common Shares have not been obtained by the Company, the Company shall, with
respect to each Right, in accordance with Section 9, make adequate provision to
substitute, upon exercise of the Rights, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares or other equity securities of the Company
(including without limitation shares or units of shares of preferred stock
and/or preference stock), except to the extent that the Company has not obtained
any necessary regulatory approval for such issuance, (4) debt securities of the
Company, except to the extent that the Company has not obtained any necessary
regulatory approval for such issuance, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the current per share
market price (as determined pursuant to Section 11(d) hereof) of the Common
Shares for which such Right is otherwise exercisable, where such aggregate value
has been determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by the Board
of Directors of the Company. To the extent that the Board of Directors of the
Company determines that alternative provisions need be made pursuant to the
first sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to the second paragraph of Section 11(a)(ii) hereof, that such action
shall apply uniformly to all outstanding Rights (or to Rights pro rata or such
other reasonable method of allocation as shall be determined by the Board of
Directors of the Company, to the extent that such action applies to less than
all the Rights), and (y) may suspend the exercisability of the Rights until the
expiration of the Approval Period in order to seek any authorization of
additional shares, to take any action to obtain any required regulatory approval
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as
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the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) per share of the Common Stock on
the Trigger Date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preference Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preference Shares (or shares having the same
rights, privileges and preferences as the Preference Shares ("equivalent
preference shares")) or securities convertible into Preference Shares or
equivalent preference shares at a price per Preference Share or equivalent
preference share (or having a conversion price per share, if a security
convertible into Preference Shares or equivalent preference shares) less than
the then current per share market price of the Preference Shares (as defined in
Section 11(d)) 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 Preference Shares outstanding on such record date plus
the number of Preference Shares which the aggregate offering price of the total
number of Preference Shares and/or equivalent preference 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 Preference Shares outstanding on such record
date plus the number of additional Preference Shares and/or equivalent
preference shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
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stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and holders of the Rights. Preference
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and, in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preference Shares (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 quarterly cash dividend or a dividend payable in
Preference Shares) 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 then current per share market price of the Preference Shares on
such record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and holders of the Rights) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights
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or warrants applicable to one Preference Share and the denominator of which
shall be such then-current per share market price of the Preference Shares;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed;
and, in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days immediately prior to such date; provided, however, that, in the event that
the current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or Securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. 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 Se-
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curity is 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
Security is listed or admitted to trading or, if the Security is 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 Security is 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 Security selected by the Board of Directors
of the Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business, or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preference Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preference
Shares are not publicly traded, the "current per share market price" of the
Preference Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i)
hereof (appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by one
thousand. If neither the Common Shares nor the Preference Shares are publicly
held or so listed or traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent.
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(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one one-millionth
of a Preference Share or one ten-thousandth of any other share or security as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If, as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preference
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preference Shares contained in Section 11(a) through (c) hereof, inclusive, and
the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preference
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
Preference Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
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(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 Sections 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 Preference Share (calculated to the nearest one
one-millionth of a Preference Share) obtained by (A) multiplying (x) the number
of one one-thousandths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (B) 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 Preference Share
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 Preference Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
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date of the public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein, and 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 in the number of one one-thousandths of a Preference Share issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-thousandths of a Preference Share 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 one one-thousandth of the then par value, if
any, of the Preference Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preference Shares 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 of
the Preference Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preference Shares 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 upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it, in its sole discretion, shall
determine to be advisable in order that any consolidation or subdivision of the
Preference Shares, issuance wholly for cash of any Preference Shares at less
than the current market price, issuance wholly for cash of Preference Shares or
securities which by their terms are convertible into or exchangeable for
Preference Shares, dividends on Preference Shares payable in Preference Shares
or issuance of rights, options or warrants referred to in Section 11(b) hereof,
hereafter made by the Company to holders of the Preference Shares shall not be
taxable to such stockholders.
(n) In the event that, at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Shares payable in Common Shares, or (ii) effect a
subdivision, combination or consolidation of the
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Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares) into a greater or lesser number of Common Shares, then, in any
such case, (A) the number of one one-thousandths of a Preference Share
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-thousandths of a Preference
Share so purchasable immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding immediately before
such event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each Common Share outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preference Shares and the Securities and Exchange Commission a
copy of such certificate and (c) if such adjustment occurs at any time after the
Distribution Date, mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or indirectly, at any time after
a Person has become an Acquiring
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Person, (a) the Company shall consolidate with, or merge with and into, any
other Person, (b) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (c) 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 or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person other
than the Company or one or more of its wholly-owned Subsidiaries, then, and in
each such case, proper provision shall be made so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-thousandths of a Preference Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preference Shares, such number of Common Shares of such
other Person (including the Company as successor thereto or as the surviving
corporation) as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-thousandths of a Preference
Share for which a Right is then exercisable and dividing that product by (B) 50%
of the then current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including,
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but not limited to, the reservation of a sufficient number of its Common Shares
in accordance with Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common Shares of
the Company thereafter deliverable upon the exercise of the Rights. The Company
shall not consummate any such consolidation, merger, sale or transfer unless,
prior thereto, the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement so providing. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market 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 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
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reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
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 Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of
Preference Shares (other than fractions which are integral multiples of one
one-thousandth of a Preference Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preference Shares (other than
fractions which are integral multiples of one one-thousandth of a Preference
Share). Fractions of Preference Shares in integral multiples of one
one-thousandth of a Preference Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preference Shares represented by such depositary receipts. In lieu of
fractional Preference Shares that are
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not integral multiples of one one-thousandth of a Preference Share, the Company
shall 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 Preference Share. For the purposes
of this Section 14(b), the current market value of a Preference Share shall be
the closing price of a Preference Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right, by the acceptance of the Right,
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in such holder's own behalf
and for such holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's 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 under, and
in-
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junctive 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 the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(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;
(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 Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
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.
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any
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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 Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preference Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder, and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and 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
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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.
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 the Preference Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. 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 stock transfer or corporate trust powers of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall
have been counter-
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signed but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and, in all such cases, such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and, in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and, in all such cases, such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (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.
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(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 be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chief Executive Officer,
the President, the Chief Operating Officer, any Executive Vice President, Senior
Vice President or Vice President, the Treasurer, the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be re-
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sponsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 9, 11, 13, 23 or 24 hereof, or the ascertaining of
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preference Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preference Shares
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
any one of the Chief Executive Officer, the President, the Chief Operating
Officer, any Executive Vice President, Senior Vice President or Vice President,
the Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary
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 by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions.
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(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided that reasonable care was exercised
in the selection and continued employment thereof.
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 Shares or Preference Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent 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 Shares or
Preference Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appoint-
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ment 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 (which
holder shall, with such notice, submit such holder's 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 by
such a court, shall be a corporation organized and doing business under the laws
of the United States or of the State of Minnesota (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of Minnesota), in good standing, having an
office in the State of Minnesota, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. 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 Shares
or Preference Shares, 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 the Board of Directors of
the Company to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to such time as any Person becomes
an Acquiring Person, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, 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"). The redemption of the Rights by the Board of Directors of
the Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Company, in its sole discretion, may
establish.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after the effective date of the action of the
Board of Directors of the Company ordering the redemption of the Rights, the
Company shall mail a notice of redemption to all the holders of the
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then outstanding Rights 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 Shares. 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 for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option but subject to the provisions of Section 9, 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 provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any adjustment in the number of Rights pursuant to Section
11(i) (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
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(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 24 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 Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares 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 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, or, if
any regulatory approvals necessary for the issuance of such Common Shares has
not been obtained by the Company, the Company shall, with respect to each Right,
in accordance with Section 9, make adequate provision to substitute, upon
exchange of the Rights, (1) cash, (2) Common Shares or other equity securities
of the Company (including without limitation shares or units of shares of
preferred stock and/or preference stock), except to
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the extent that the Company has not obtained any necessary regulatory approval
for such issuance, (3) debt securities of the Company, except to the extent that
the Company has not obtained any necessary regulatory approval for such
issuance, (4) other assets, or (5) any combination of the foregoing, having an
aggregate value equal to the current per share market price (as determined
pursuant to Section 11(d) hereof) of the Common Shares for which such Right is
otherwise exchangeable, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company. To the extent that the Board of Directors of the Company determines
that some action need be taken pursuant to the first sentence of this Section
24(c), the Company (x) shall provide, subject to the second paragraph of Section
11(a)(ii) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exchange of the Rights until the expiration of
the Approval Period in order to seek any authorization of additional shares, to
take any action to obtain any required regulatory approval and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exchange 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 24(c), the value
of the Common Shares shall be the current per share market price (as determined
pursuant to Section 11(d) hereof) per share of the Common Stock on the Trigger
Date.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional
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Common Shares, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of a whole Common Share. For the purposes of this paragraph (d), the
current market value of a whole Common Share shall be the closing price of a
Common Share (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company
shall, at any time after the Distribution Date, propose (i) to pay any dividend
payable in stock of any class to the holders of the Preference Shares or to make
any other distribution to the holders of the Preference Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of the Preference
Shares rights or warrants to subscribe for or to purchase any additional
Preference Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of the Preference Shares
(other than a reclassification involving only the subdivision of outstanding
Preference Shares), (iv) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Cer-
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tificate, as promptly as reasonably practicable, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preference
Shares, if any such date is to be fixed.
(b) In case the event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall, as soon as practicable thereafter, give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
By Mail:
MDU Resources Group, Inc.
P.O. Box 5650
Bismarck, North Dakota 58506-5650
Attention: Corporate Secretary
By Courier:
MDU Resources Group, Inc.
Schuchart Building
918 East Divide Avenue
Bismarck, North Dakota 58501
Attention: Corporate Secretary
-47-
<PAGE>
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 (until another address
is filed in writing with the Company) as follows:
Norwest Bank Minnesota, N.A.
161 North Concord Exchange
South St. Paul, Minnesota 55075
Attention: Stock Transfer Administrator
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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from
time to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions with respect
to the Rights which the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that, from and after such time as any
Person becomes an Acquiring Person, this Agreement shall not be amended in any
manner which would adversely affect the interests of the holders of Rights.
Without limiting the foregoing, the Company may at any time prior to such time
as any Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof to not less than the
greater of (a)
-48-
<PAGE>
the sum of .001% and the largest percentage of the outstanding Common Shares
then known by the Company to be beneficially owned by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan) and (b) 10%.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. 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, the Common Shares) 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, the Common Shares).
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.
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 Delaware
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<PAGE>
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.
-50-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
Attest: MDU RESOURCES GROUP, INC.
By /s/ Lester H. Loble, II By /s/ Martin A. White
-------------------------------- -----------------------------------
Lester H. Loble, II Martin A. White
Secretary President
Attest: NORWEST BANK MINNESOTA, N.A.
By /s/ Suzanne M. Swits By /s/ Kenneth P. Swanson
-------------------------------- -----------------------------------
Suzanne M. Swits Kenneth P. Swanson
Assistant Secretary Vice President
-51-
<PAGE>
Exhibit A
---------
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES B PREFERENCE STOCK
of
MDU RESOURCES GROUP, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-----------------------------
MDU Resources Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by Section 151
of the General Corporation Law at a meeting duly called and held on November 12,
1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preference
Stock, without par value, of the Corporation (the "Preference Stock"), and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series B Preference Stock:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series B Preference Stock" (the "Series B Preference
Stock") and the number of shares constituting the Series B Preference Stock
shall be 60,000. 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 Series B Preference Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of out-
A-1
<PAGE>
standing options, rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series B Preference Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock or Preferred Stock A (or any similar stock)
ranking prior and superior to the Series B Preference Stock with
respect to dividends, the holders of shares of Series B Preference
Stock, equally with holders of all other series of Preference Stock and
in preference to the holders of Common Stock, par value $3.33 per share
(the "Common Stock"), of the Corporation, and of any other junior
stock, 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 Series B Preference Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1 or
(b) subject to the provision for adjustment hereinafter set forth, 1000
times the aggregate per share amount of all cash dividends, and 1000
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 Series B
Preference Stock. In the event the Corporation shall at any time
declare or pay any dividend on the 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 to which holders of shares of Series B Preference 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 Series B Preference 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 $1 per share on the Series B Preference
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
A-2
<PAGE>
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preference Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
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 on
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 Series B Preference 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 not bear interest. Dividends paid on the shares
of Series B Preference 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 Series B Preference 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 Series B
Preference Stock shall have no voting rights except as otherwise provided by law
or as set forth in the Corporation's Certificate of Incorporation.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preference 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
Series B Preference 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 of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preference 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 the Series B Preference Stock, except
dividends paid ratably on the Series B Preference 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 junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series B Preference Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
A-3
<PAGE>
dividends or upon dissolution, liquidation or winding up) to
the Series B Preference Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preference Stock, or any
shares of stock ranking on a parity with the Series B
Preference 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 and 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 Series B
Preference Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preference Stock and may be reissued as part of a new series
of Preference Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preference Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preference Stock unless, prior thereto, the holders of shares of Series B
Preference Stock shall have received $1000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preference Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1000
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series B Preference Stock, except distributions made ratably on the Series B
Preference Stock and all 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 the 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 Series B Preference Stock were entitled immediately prior
to such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction
A-4
<PAGE>
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, then in any such case each share
of Series B Preference 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 1000 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
the 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 Series B Preference 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 Series B Preference
Stock shall not be redeemable.
Section 9. Rank. The Series B Preference Stock shall rank,
with respect to the payment of dividends and the distribution of assets, junior
to all series of any class of the Corporation's Preferred Stock and Preferred
Stock A, shall rank equally with all other series of the Corporation's
Preference Stock, and shall rank superior to the Common Stock and any other
class or series of junior stock.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Preference
Stock so as to affect them adversely without the affirmative vote of the holders
of at least a majority of the outstanding shares of Series B Preference Stock,
voting together as a single class.
A-5
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its President and Chief Executive
Officer and attested by its Secretary this day __ of _________, 1998.
-------------------------------
President and Chief Executive Officer
Attest:
- ------------------------------
Secretary
A-6
<PAGE>
Exhibit B
---------
[Form of Right Certificate]
Certificate No. R- __ Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE AGREEMENT.
Right Certificate
MDU RESOURCES GROUP, INC.
This certifies that __________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Agreement, dated as of November 12, 1998 (the "Agreement"), between MDU
Resources Group, Inc., a Delaware corporation (the "Company"), and Norwest Bank
Minnesota, N.A. (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Agreement) and prior
to 5:00 P.M., South St. Paul time, on December 31, 2008 at the principal office
of the Rights Agent, or at the office of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share of Series B Preference
Stock, without par value, of the Company (the "Preference Shares"), at a
purchase price of $125 per one one-thousandth of a Preference Share (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of one one-thousandths of a
Preference Share which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
_______ __, ____, based on the Preference Shares as constituted at such date. As
provided in the Agreement, the Purchase Price and the number of one
one-thousandths of a Preference Share which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights
B-1
<PAGE>
Agent, the Company and the holders of the Right Certificates. Copies of the
Agreement are on file at the principal executive offices of the Company and the
offices of 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 Preference Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Agreement, the Rights
evidenced by this Right Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for Preference Shares or shares of the Company's Common Stock, par value $3.33
per share (or, in certain circumstances, cash, other assets and/or other
securities of the Company).
No fractional Preference Shares 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 Preference Share, 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 Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preference
Shares 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 Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
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 Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
B-2
<PAGE>
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ___________, ____.
ATTEST: MDU RESOURCES GROUP, INC.
__________________________ By ___________________________
Name: Name:
Title: Title:
Countersigned:
NORWEST BANK MINNESOTA, N.A.
By ______________________________
Name:
Title:
B-3
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________ hereby sells, assigns and
transfers unto__________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ___________________
________________________________
Signature
Signature Guaranteed:
The Signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.
- --------------------------------------------------------------------------------
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 Agreement).
________________________________
Signature
- --------------------------------------------------------------------------------
B-4
<PAGE>
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: MDU RESOURCES GROUP, INC.
The undersigned hereby irrevocably elects to exercise ________
Rights represented by this Right Certificate to purchase the Preference Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preference 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: _____________
________________________________
Signature
B-5
<PAGE>
Signature Guaranteed:
The Signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.
- --------------------------------------------------------------------------------
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 Agreement).
________________________________
Signature
- --------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent 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 Agreement) and such Assignment
or Election to Purchase will not be honored.
B-6
<PAGE>
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERENCE SHARES
Introduction
- ------------
On November 12, 1998, the Board of Directors of MDU Resources
Group, Inc. (the "Company") declared a dividend of one preference share purchase
right (a "Right") for each outstanding share of common stock, par value $3.33
per share, of the Company (the "Common Shares"). The dividend is payable on
December 1, 1998 (the "Record Date") to the stockholders of record on that date.
The description and terms of the Rights are set forth in an Agreement (the
"Agreement") between the Company and Norwest Bank Minnesota, N.A., as Rights
Agent (the "Rights Agent").
Purchase Price
- --------------
Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series B Preference Stock of the
Company, without par value (the "Preference Shares"), at a price of $125 per one
one-thousandth of a Preference Share (the "Purchase Price"), subject to
adjustment.
Flip-In
- -------
In the event that any person or group of affiliated or
associated persons acquires beneficial ownership of 15% or more of the
outstanding Common Shares (an "Acquiring Person"), each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the
Right.
Flip-Over
- ---------
If the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, each
holder of a Right (other than Rights beneficially owned by Acquiring Person,
which will be void) will thereafter have the right to receive that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right.
C-1
<PAGE>
Distribution Date
- -----------------
The distribution date is the earlier of
(i) 10 days following a public announcement that a person or
group of affiliated or associated persons have acquired beneficial ownership of
15% or more of the outstanding Common Shares; or
(ii) 10 business days (or such later date as may be determined
by action of the Board of Directors of the Company prior to such time as any
person or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares.
Transfer and Detachment
- -----------------------
Until the Distribution Date, the Rights will be evidenced,
with respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate with a copy of this Summary of
Rights attached thereto. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the Rights will be transferred with and only with the
Common Shares, and transfer of those certificates will also constitute transfer
of these Rights.
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 Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
Exercisability
- --------------
The Rights are not exercisable until the Distribution Date.
The Rights will expire on December 31, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case, as described below.
Adjustments
- -----------
The Purchase Price payable, and the number of Preference
Shares or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution in the event of
stock dividends, stock splits, reclassifications, or certain distributions with
respect to the Preference Shares. The number of outstanding Rights and the
number of one one-thousandths of a Preference Share issuable upon exercise of
each Right are also subject to adjustment if, prior to the Distribution Date,
there is a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations or combinations
of the Common Shares. 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 Preference Shares will be issued
(other than fractions
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which are integral multiples of one one-thousandth of a Preference Share, which
may, at 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 Preference Shares on the last trading day prior to the date of exercise.
Preference Shares
- -----------------
Preference Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preference Share will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to
an aggregate dividend of 1000 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preference Shares will be entitled
to a minimum preferential liquidation payment of $1000 per share but will be
entitled to an aggregate payment of 1000 times the payment made per Common
Share. Each Preference Share will have no vote except as otherwise provided by
Delaware Law or the Company's Certificate of Incorporation. Finally, in the
event of any merger, consolidation or other transaction in which Common Shares
are exchanged, each Preference Share will be entitled to receive 1000 times the
amount received per Common Share. These rights are protected by customary
antidilution provisions.
The value of the one one-thousandth interest in a Preference
Share purchasable upon exercise of each Right should, because of the nature of
the Preference Shares' dividend and liquidation rights, approximate the value of
one Common Share.
Exchange
- --------
At any time after any person or group becomes an Acquiring
Person, and prior to the acquisition by such person or group of 50% or more of
the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by the Acquiring Person, which will
have become void), in whole or in part, at an exchange ratio of one Common
Share, or one one-thousandth of a Preference Share, per Right(subject to
adjustment).
Redemption
- ----------
At any time prior to any person or group becoming an Acquiring
Person, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time on such basis with
such conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of 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.
Amendments
- ----------
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to not less
than the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially
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owned by any person or group of affiliated or associated persons and (ii) 10%,
except that from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
Rights and Holders
- ------------------
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
Further Information
- -------------------
A copy of the Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
November 12, 1998. A copy of the Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Agreement, which is hereby
incorporated herein by reference.
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