5
File Number 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM U-1
APPLICATION - DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Name of company filing this statement and address of principal
executive office:
National Fuel Gas Company
10 Lafayette Square
Buffalo, New York 14203
Name of Top Registered Holding Company: NATIONAL FUEL GAS COMPANY
Names and Addresses of Agents for Service:
P. C. Ackerman A. M. Cellino
Senior Vice President Secretary
National Fuel Gas Company National Fuel Gas Company
10 Lafayette Square 10 Lafayette Square
Buffalo, New York 14203 Buffalo, New York 14203
It is respectfully requested that the Commission send copies of all notices,
orders and communications to:
Kyle G. Storie
10 Lafayette Square, Suite 1500
Buffalo, New York 14203
<PAGE>
Item 1. Description of Proposed Transaction
I. INTRODUCTION
National Fuel Gas Company (the "Company" or "National") is a
public utility holding company registered under the Public Utility Holding
Company Act of 1935, as amended ("Act"). National has proposed to implement a
shareholder rights plan.
II. BACKGROUND FOR PROPOSED STOCK RIGHTS DIVIDEND
Unsolicited attempts to acquire public companies have required
boards of directors and their stockholders to make difficult decisions affecting
the value, and on occasion the existence, of companies within extremely short
time periods. Such takeover attempts often occur when a company is particularly
vulnerable and when its board has determined that the company's inherent long
term values are inadequately recognized by the marketplace. Many of these
attempts have involved partial or two-tiered offers, the breakup of the
corporate structure and sale of assets, or have taken the form of creeping
acquisitions of stock that deprive stockholders of participation in a control
premium.
There has been increased takeover activity in the utility
industry including hostile or other unwanted takeover bids, indicating that the
Company's stockholders may be at risk of losing the long-term value of the
Company.
Shareholder rights plans have become a widely accepted means
of maximizing shareholder value by reducing the risk of nonrealization of
shareholder value due to opportunistic takeover proposals. Such a plan would
encourage potential acquirers to negotiate with the Board of Directors of
National ("Board") would assist the Board in obtaining the highest value for the
Company's shareholders, especially in a hostile or unwanted takeover situation.
The plan may, in certain circumstances, permit the Board to thwart an inadequate
offer. A shareholder rights plan would also provide the Board with a role
(supplemental to the role of the Commission under the Act) in discouraging
implicitly coercive takeover tactics and would enable the Board to provide
holders of Common Stock adequate time to properly assess a takeover bid without
undue pressure. A shareholder rights plan may enhance the probability that a
higher competing bid will emerge. Over 1,700 American public companies have
adopted shareholder rights plans.
<PAGE>
III. DESCRIPTION OF RIGHTS TO PURCHASE COMMON STOCK
General
The Board proposes to declare a dividend distribution of one
right ("Right") for each outstanding share of common stock, $1.00 par value, of
the Company ("Common Stock") to shareholders of record at the close of business
on a record date yet to be established ("Record Date"). As of February 29, 1996
there were 37,575,702 shares of Common Stock outstanding. The detailed
description and terms of the Rights will be set forth in a Rights Agreement
("Agreement") to be between National and the Rights Agent ("Agent"). A draft of
the Agreement is filed as Exhibit A-3. Each Right would entitle the registered
holder to purchase from National one-half of one share of Common Stock at a
price of $130 per share, being $65.00 per half share, subject to adjustment
("Purchase Price").
Distribution Date; Transfer of Rights
Until the earliest to occur of (i) ten days following the date
("Shares Acquisition Date") of the public announcement that a person or
affiliated group ("Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of Common Stock or other voting securities
("Voting Stock") that have 10% or more of the voting power of the outstanding
shares of Voting Stock or (ii) ten days following the commencement or
announcement of an intention to make a tender offer, or exchange offer, the
consummation of which would result in such person acquiring, or obtaining the
right to acquire, beneficial ownership of Voting Stock having 10% or more of the
voting power of the outstanding shares of Voting Stock (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any shares of Common Stock outstanding as of the Record Date, by the
Common Stock certificates representing those outstanding shares. Until the
Distribution Date, the Rights will be transferable only with the Common Stock,
and new Common Stock certificates issued after the Record Date will contain a
notation incorporating the Agreement by reference. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of Common Stock as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. As
in the case with most right plans which are in place, the Rights will expire at
the close of business on the tenth anniversary of the Record Date, unless
earlier redeemed or exchanged by National as described further herein.
Exercise of Rights
Subject to redemption or exchange of the Rights, at any time
following the Distribution Date, each holder of a Right will have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of National) having a value equal to two times the
Purchase Price of the Right then in effect. However, all Rights that are, or
under certain circumstances were, beneficially owned by any Acquiring Person
will be null and void.
In the event that, at any time following the Shares
Acquisition Date, (i) National is acquired in a merger or other business
combination transaction, or (ii) 50% or more of National's assets or earning
power are sold or transferred, each holder of a Right shall thereafter have the
right to receive, upon exercise, common stock of the acquiring company having a
value equal to two times the Purchase Price of the Right then in effect.
Adjustments to Purchase Price
The Purchase Price payable, and the number of shares of Common
Stock (or other securities, as the case may be) issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for or purchase shares
of the Common Stock or convertible securities at less than the then current
market price of the Common Stock or (iii) upon the distribution to holders of
the Common Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in Common Stock) or of subscription
rights or warrants (other than those referred to above). Prior to the
Distribution Date, the Board may make such other equitable adjustments as it
deems appropriate in the circumstances in addition to or in lieu of any
adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Purchase Price
will be required until the earlier of (i) three years from the date of the event
giving rise to such adjustment or (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
shares of Common Stock will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
Redemption and Exchange of Rights
At any time prior to 5:00 P.M. Buffalo, New York time on the
tenth day following the Shares Acquisition Date, National may redeem the Rights
in whole, but not in part, at a price of $.01 per Right ("Redemption Price"),
payable in cash or stock. Under certain circumstances set forth in the
Agreement, the decision to redeem shall require the concurrence of a majority of
the Independent Directors. An "Independent Director" means any member of the
Board who was a member of the Board prior to the date of the Agreement, and any
person who is subsequently elected to the Board if such person is recommended or
approved by a majority of the Independent Directors, but shall not include an
Acquiring Person or any representative thereof. Immediately upon the action of
the Board electing to redeem the Rights, National shall make announcement
thereof and the only right of the holders of Rights will be to receive the
Redemption Price.
At any time after a person becomes an Acquiring Person, the
Board may exchange the Rights (other than Rights owned by an Acquiring Person,
which become void), in whole or in part, at an exchange ratio of one share of
Common Stock and/or other securities, cash or other assets deemed to have the
same value as one share of Common Stock, per Right, subject to adjustment.
Until a Right is exercised or exchanged for Common Stock, the
Rights, as such, will not grant the holders thereof rights as a stockholder of
National. While the distribution of the Rights will not be taxable to
stockholders or to National, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable for
Common Stock of National (or other consideration) or for the stock of the
Acquiring Person.
Amendments
Any of the provisions of the Agreement may be amended by the
Board without the consent of the holders of the Rights prior to the Distribution
Date. Thereafter, the Agreement may be amended by the Board in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interest of any
Acquiring Person); provided, however, that no supplement or amendment may be
made on or after the Distribution Date which changes those provisions relating
to the principal economic terms of the Rights. The Board may also, with the
concurrence of a majority of the Independent Directors, extend the redemption
period for up to an additional 20 days.
IV. AUTHORIZATIONS SOUGHT
National herein seeks authorization to implement the
shareholder rights plan as described in this Application-Declaration and
embodied in the Agreement. This would include, among other actions permitted by
the Agreement, the following transactions:
(i) the dividend distribution of the Rights;
(ii) the making of adjustments to the Purchase Price;
(iii) the sale and issuance of Common Stock or other
National securities, or the transfer of other assets,
upon exercise of the Rights;
(iv) the redemption of Rights and the issuance of Common
Stock in connection therewith, and the issuance of
Common Stock or other National securities, or the
transfer of other assets, in exchange for Rights; and
(v) amending of the Agreement as permitted by the terms
thereof.
Item 2. Fees, Commissions and Expenses
It is estimated that the fees, commissions and expenses to be
incurred by National in connection with the proposed transactions will be as
follows:
Form U-1 Filing Fee $2,000
Form 8-A Filing Fee 250
Rights Agent Fees 10,000
Outside Counsel and Advisors'
Fees 50,000
Printing and Mailing 25,000
Miscellaneous 3,000
$90,250
Item 3. Applicable Statutory Provisions
Sections 6(a), 7, 9(a), 10 and 12(c) of the Act and Rules 42
and 46 under the Act are deemed to be applicable to the proposed transactions.
Proposed Transaction Applicable Provisions
The Dividend Distribution of the Rights. Sections 6(a), 7 and 12(c) and
Rule 46
The Sale and Issuance of Common Stock Sections 6(a) and 7
or other National Securities upon
Exercise of the Rights.
The Redemption of Rights and the Issuance Sections 6(a), 7, 9(a), 10 and
of Common Stock in connection therewith, 12(c) and Rule 42
and the Issuance of Common Stock or other
National Securities, or the Transfer of
other Assets, in Exchange for Rights.
To the extent that the proposed transactions are considered by
the Commission to require authorization, approval or exemption under any section
of the Act or provision of the rules or regulations other than those
specifically referred to herein, request for such authorization, approval or
exemption is hereby made.
Item 4. Regulatory Approval
No State commission and no other Federal commission
has jurisdiction over the proposed transactions.
Item 5. Procedure
National requests that the Commission issue its order
with respect to the proposed transaction by May 15, 1996.
It is submitted that a recommended decision by a hearing or
other responsible Officer of the Commission is not needed with respect to the
proposed transactions. The Office of Public Utility Regulation of the Division
of Investment Management may assist in the preparation of the Commission's
decision. There should be no waiting period between the issuance of the
Commission's order and the date on which it is to become effective.
Item 6. Exhibits and Financial Statements
(a) Exhibits
A-1 Certificate of Incorporation of National, as
restated and amended through September 30,
1992. (Incorporated by reference to Exhibit
10-00, Form 10-K for fiscal year ended
September 30, 1991 in File No. 1-3880;
Exhibit 3.1 to Form 10-K for fiscal year
ended September 30, 1995 in File No. 1-3880;
Exhibit 3.2 to Form 10-K for fiscal year
ended September 30, 1995 in File No. 1-3880;
and Exhibit EX-3(a), Form 10-K for fiscal
year ended September 30, 1992 in File No.
1-3880)
A-2 Bylaws of National, as amended through June
9, 1994. (Incorporated by reference to
Exhibit 3.1 to Form 10-K, for the fiscal
year ended September 30, 1994 in
File No. 1-3880)
A-3 Draft of Rights Agreement between National
and Rights Agent (to be named)
F-1 Opinion of counsel. (To be filed by
amendment)
G Financial Data Schedules
H Proposed notice pursuant to Rule 22(f)
(b) Financial Statements
S-1 National Fuel Gas Company and Subsidiaries
Consolidated Balance Sheet at February 29,
1996
S-2 National Fuel Gas Company and Subsidiaries
Consolidated Statements of Income and
Earnings Reinvested in the Business for the
Twelve Months Ended February 29, 1996
S-3 National Fuel Gas Company and Subsidiaries
Notes to Consolidated Financial Statement
Item 7. Information as to Environmental Effects
The proposed transactions involve no major federal action
significantly affecting the human environment.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this statement to be signed on
its behalf by the undersigned thereunto duly authorized.
Dated: April 11, 1996
NATIONAL FUEL GAS COMPANY
By: /s/Philip C. Ackerman
Philip C. Ackerman
Senior Vice President
u-1
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
EXHIBIT G
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL
FUEL GAS COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000070145
<NAME> NATIONAL FUEL GAS COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> FEB-29-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,669,362
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 343,413
<TOTAL-DEFERRED-CHARGES> 11,599
<OTHER-ASSETS> 198,716
<TOTAL-ASSETS> 2,223,090
<COMMON> 37,576
<CAPITAL-SURPLUS-PAID-IN> 387,669
<RETAINED-EARNINGS> 436,853
<TOTAL-COMMON-STOCKHOLDERS-EQ> 862,098
0
0
<LONG-TERM-DEBT-NET> 474,000
<SHORT-TERM-NOTES> 133,900
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 100,000
<LONG-TERM-DEBT-CURRENT-PORT> 30,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 623,092
<TOT-CAPITALIZATION-AND-LIAB> 2,223,090
<GROSS-OPERATING-REVENUE> 1,084,630
<INCOME-TAX-EXPENSE> 48,962
<OTHER-OPERATING-EXPENSES> 897,661
<TOTAL-OPERATING-EXPENSES> 946,623
<OPERATING-INCOME-LOSS> 138,007
<OTHER-INCOME-NET> 5,552
<INCOME-BEFORE-INTEREST-EXPEN> 143,559
<TOTAL-INTEREST-EXPENSE> 56,042
<NET-INCOME> 87,517
0
<EARNINGS-AVAILABLE-FOR-COMM> 87,517
<COMMON-STOCK-DIVIDENDS> 60,040
<TOTAL-INTEREST-ON-BONDS> 39,958
<CASH-FLOW-OPERATIONS> 0
<EPS-PRIMARY> 2.34
<EPS-DILUTED> 2.34
</TABLE>
EXHIBIT A-3
NATIONAL FUEL GAS COMPANY
and
_______________________, Rights Agent
RIGHTS AGREEMENT
Dated as of ______________, 199_
<PAGE>
TABLE OF CONTENTS
Page
RIGHTS AGREEMENT
Section 1. Certain Definitions. . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . 6
Section 3. Issue of Right Certificates . . . . . . . . . . 6
Section 4. Form of Right Certificates. . . . . . . . . . 8
Section 5. Countersignature and Registration . . . . . . . 9
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates . . . . . . . . . . . . . . 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. . . . . . . . . . . 10
Section 8. Cancellation and Destruction of
Right Certificates. . . .. . . . . . . . . . . 12
Section 9. Reservation and Availability of
Shares of Common Stock. . . . . . . . . . . . .12
Section 10. Common Stock Record Date . . . . . . . . . . . 14
Section 11. Adjustment of Purchase Price, Number
of Shares or Number of Rights . . . . . . . . . 14
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares. . . . . . . . . . 21
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. . . . . 21
Section 14. Fractional Rights and Fractional
Shares. . . . . . . . . . . . . . . . 23
Section 15. Rights of Action . . . . . . . . . . . . . . . 24
Section 16. Agreement of Right Holders . . . . . . . . . . .24
Section 17. Right Certificate Holder Not Deemed a
Stockholder. . . . . . . . . . . . . . . . . . 26
Section 18. Concerning the Rights Agent. . . . . . . . . . 25
Section 19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . . . . . 26
Section 20. Duties of Rights Agent. . . . . . . . . . . . 27
Section 21. Change of Rights Agent. . .. . . . . . . . . . .29
Section 22. Issuance of New Right Certificates . . . . . 30
Section 23. Redemption and Termination. . . . . . . . . . 30
Section 24. Exchange. . . . . . . . . . . . . . . . . . . 31
Section 25. Notice of Certain Events. . . . . . . . . . . 32
Section 26. Notices . . . . . . . . . . . . . . . . . . 33
Section 27. Supplements and Amendments. . . . . . . . . 34
Section 28. Successors. . . . . . . . . . . . . . . . . 34
Section 29. Determinations and Actions by the
Board of Directors . . . . .. . . . . . . . 34
Section 30. Benefits of This Agreement. . . . . . . . . .35
Section 31. Severability. . . . . . . . . . . . . . . . . 35
Section 32. Governing Law. . . . . . . . . . . . . . .. 35
Section 33. Counterparts. . . . . . . . . . . . . . . . . 35
Section 34. Descriptive Headings. . . . . . . . . . . . . 36
Exhibit A - Form of Right Certificate . . . . . . . . . . . . . . A-1
Form of Assignment . . . . . . . . . . . . . . . . . . . A-5
Certificate. . . . . . . . . . . . . . . . . . . . . . . A-6
Notice. . . . . . . . . . . . . . . . . . . . . . . . . . A-7
Form of Election to Purchase. . . . . . . . . . . . . . . . A-8
Exhibit B - Summary of Rights to Purchase
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . B-1
<PAGE>
RIGHTS AGREEMENT
Rights Agreement, dated as of 199 (the "Agreement"), between National
Fuel Gas Company, a New Jersey corporation (the "Company"), and
_______________________ (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company on
____________, 199_ ("Rights Dividend Declaration Date") authorized and declared
a dividend distribution (the "Distribution") of one Right for each outstanding
share of Common Stock, $1.00 par value, of the Company (the "Common Stock")
outstanding at the close of business on , 199_ (the "Record Date") and has
authorized the issuance of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of section 11(i) hereof) for each share of Common
Stock issued (whether originally issued or delivered from the Company's treasury
stock) between the Record Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right initially
representing the right to purchase, under certain circumstances, one-half of one
share of Common Stock, upon the terms and subject to the conditions hereinafter
set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person
(as such term is hereinafter defined) who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as such term
is hereinafter defined) of securities of the Company constituting a Substantial
Block (as such term is hereinafter defined), but shall not include (i) the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any Person organized, appointed or established by the Company or any Subsidiary
of the Company for or pursuant to the terms of any such plan, (ii) any Person
who or which, together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of a Substantial Block solely as a result of a
change in the aggregate number of shares of Voting Stock (as such term is
hereinafter defined) outstanding since the last date on which such Person
acquired Beneficial Ownership of any shares of the Voting Stock constituting all
or a portion of such Substantial Block; and (iii) any Person who or which,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of a Substantial Block in the good faith belief that such
acquisition would not (x) cause such Person and its Affiliates and Associates to
become the Beneficial Owner of a Substantial Block and such Person relied in
good faith in computing the percentage of its voting power on publicly filed
reports or documents of the Company which are inaccurate or out-of-date or (y)
otherwise cause a Distribution Date or the adjustment provided for in Section
11(a) to occur. Notwithstanding clause (ii) or (iii) of the prior sentence, if
any Person that is not an Acquiring Person due to such clause (ii) or (iii) does
not cease to be the Beneficial Owner of a Substantial Block by the close of
business on the fifth Business Day (as such term is hereinafter defined) after
notice from the Company (the date of notice being the first day) that such
Person is the Beneficial Owner of a Substantial Block, such Person shall, at the
end of such five Business Day period, become an Acquiring Person (and such
clause (ii) or (iii) shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company, acting by a
vote of those directors of the Company whose approval would be required to
redeem the Rights under Section 2 3 .
(b) "Act" shall have the meaning set forth in
Section 9(c) hereof.
(c) "Adjustment Shares" shall have the meaning
set forth in Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
(e) "Agreement" shall have the meaning set
forth in the introduction hereto.
(f) 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 has, directly or indirectly, the right to
acquire (whether such right is exercisable immediately or only after the passage
of time or upon the occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (1) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange, (2) securities issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event (as such term is hereinafter defined) or
(3) securities issuable upon exercise of Rights from and after the occurrence of
a Triggering Event, which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) hereof ("Original Rights") or pursuant to Section 11(i) or Section
22 hereof in connection with an adjustment made with respect to Original Rights;
or
(ii) which such Person or any of such
Person's Affiliates or Associates has, directly or indirectly, the right to vote
or dispose of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this subparagraph (ii)
if the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned,
directly or indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (f)) or disposing of any securities of the
Company.
Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own," any securities acquired in
a bona fide firm commitment underwriting pursuant to an underwriting agreement
with the Company.
(g) "Business Day" shall mean any day other
than a Saturday, Sunday, or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
(h) "Certification" shall have the meaning set
forth in Section 18 hereof.
(i) "close of business" on any given date
shall mean 5:00 P.M., Buffalo, New York time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M., Buffalo, New
York time, on the next succeeding Business Day.
(j) "Common Stock" when used with reference
to the Company shall mean the shares of common stock, $1.00 par value, of the
Company. "Common Stock" when used with reference to any Person other than the
Company shall mean either the capital stock with the greatest voting power of
such other Person or, if such Person is a Subsidiary of another Person, the
equity securities or other equity interest having power to control or direct the
management of such Person.
(k) "Common Stock Equivalent" shall have the
meaning set forth in Section 11(a)(iii).
(l) "Company" shall have the meaning set forth
in the introduction hereto.
(m) "Current Market Price" shall have the
meaning set forth in Section 11(d) hereof.
(n) "Current Value" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(o) "Distribution" shall have the meaning
set forth in the recitals hereto.
(p) "Distribution Date" shall have the
meaning set forth in Section 3(a) hereof.
(q) "Equivalent Common Stock" shall have the
meaning set forth in Section 11(b) hereof.
(r) "Exchange Act" shall have the meaning set
forth in the definitions of "Affiliate" and "Associate" above.
(s) "Exchange Ratio" shall have the meaning set
forth in Section 24(a) hereof.
(t) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(u) "Final Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(v) "Independent Director" shall mean any member
of the Board of Directors of the Company, while such person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative or nominee of an Acquiring Person or of
any such Affiliate or Associate, and was a member of the Board prior to the date
hereof, and any successor of an Independent Director while such successor is a
member of the Board, who is not an Acquiring Person or an Affiliate or Associate
of an Acquiring Person, or a representative or nominee of an Acquiring Person or
of any such Affiliate or Associate, and is recommended or elected to succeed the
Independent Director by a majority of the Independent Directors.
(w) "Original Rights" shall have the meaning
set forth in the definition of "Beneficial Owner" above.
(x) "Person" shall mean any individual, firm,
corporation, partnership, trust or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(y) "Principal Party" shall have the meaning
set forth in Section 13(b) hereof.
(z) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(aa) "Record Date" shall have the meaning set
forth in the recitals hereto.
(bb) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(cc) "Right Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(dd) "Rights" shall have the meaning set forth
in the recitals hereto.
(ee) "Rights Agent" shall have the meaning set
forth in the introduction hereto.
(ff) "Rights Dividend Declaration Date" shall
have the meaning set forth in the recitals hereto.
(gg) "Section 11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii).
(hh) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii).
(ii) "Section 13 Event" shall mean any event
described in Section 13(a).
(jj) "Shares Acquisition Date" shall mean the
first date of public announcement (which, for purposes of this definition,
includes a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
(kk) "Spread" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ll) "Subsidiary" shall mean, with reference to
any Person, any corporation (or other entity) of which an amount of voting
securities (or comparable ownership interests) sufficient to elect at least a
majority of the directors (or comparable individuals) of such corporation (or
other entity) is beneficially owned or otherwise controlled, directly or
indirectly, by such Person.
(mm) "Substantial Block" shall mean a number of
shares of Voting Stock which have 10% or more of the aggregate voting power of
all outstanding shares of Voting Stock.
(nn) "Substitution Period" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(oo) "Summary of Rights" shall have the meaning
set forth in Section 3(b) hereof.
(pp) "Trading Day" shall have the meaning set
forth in Section 11(d) hereof.
(qq) "Triggering Event" shall mean any Section
11(a)(ii) Event or Section 13 Event.
(rr) "Voting Stock" shall mean the outstanding
shares of Common Stock, $1.00 par value, and any other shares of capital stock
of the Company which are entitled to vote generally in the election of
directors.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company shall act as Co-Rights Agent and may from time to time
appoint such other Co-Rights Agents as it may deem necessary or desirable upon
ten calendar days' written notice to the Rights Agent. In no event shall the
Rights Agent have any duty to supervise or in any way be liable for such
Co-Rights Agents.
Section 3. Issue of Right Certificates. (a) Until the
earlier of (i) the close of business on the tenth calendar day after the Shares
Acquisition Date (or, if the tenth day after the Shares Acquisition Date occurs
before the Record Date, the close of business on the Record Date) or (ii) the
close of business on the tenth calendar day after the date of the commencement
of, or of the first public announcement of the intent of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person organized, appointed
or established by the Company or any Subsidiary of the Company for or pursuant
to the terms of any such plan) to commence, a tender or exchange offer if, upon
consummation thereof, such Person would be an Acquiring Person (the earlier of
the dates in subsection (i) and (ii) hereof being herein referred to as the
"Distribution Date") (x) the Rights will be evidenced (subject to the provisions
of paragraph (b) of this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be 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 Stock. As
soon as practicable after receipt by the Rights Agent of written notice from the
Company of the Distribution Date, the Rights Agent, at the Company's expense,
will send by first-class, postage prepaid mail, to each record holder of Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A hereto, evidencing one Right for each share
of Common Stock so held, subject to adjustment as provided herein. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) As soon as practicable following the Record
Date, the Company will send a copy of a Summary of Rights to Purchase Common
Stock, in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of Common
Stock as of the close of business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for Common Stock, and the
registered holders of Common Stock shall also be the registered holders of the
associated Rights. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any of the certificates
for Common Stock outstanding on the Record Date shall also constitute the
transfer of the Rights associated with Common Stock represented by such
certificate.
(c) Rights shall be issued in respect of all
shares of Common Stock issued after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date (as such term is defined in Section
7), or, in certain circumstances provided in Section 22 hereof, after the
Distribution Date. Certificates representing such shares of Common Stock shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a Rights Agreement between
National Fuel Gas Company and _______________________ dated as of , 1996 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of
National Fuel Gas Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. National Fuel Gas Company will
mail to the holder of this certificate a copy of the Rights Agreement as in
effect on the date of mailing without charge within five Business Days after
receipt of a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights beneficially owned by an Acquiring Person may
become null and void.
After the due execution of any supplement or
amendment to this Agreement in accordance with the terms hereof, the reference
to this Agreement in the foregoing legend shall mean the Agreement as so
supplemented or amended. Until the Distribution Date, the Rights associated with
Common Stock represented by certificates containing the foregoing legend shall
be evidenced by such certificates alone, and the surrender for transfer of any
of such certificates shall also constitute the transfer of the Rights associated
with Common Stock represented by such certificates. In the event that the
Company purchases or acquires any shares of Common Stock after the Record Date
but prior to the Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the shares of Common Stock which are no
longer outstanding. The failure to print the foregoing legend on any such Common
Stock certificate or any other defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
Section 4. Form of Right Certificates. (a) The Right
Certificates (and the forms of election to purchase shares and of assignment to
be printed on the reverse thereof) shall be substantially the same as Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. The Right Certificates shall be in machine-printable format and in a form
reasonably satisfactory to the Rights Agent. Subject to the provisions of
Section 11 and Section 22 hereof, the Right Certificates, whenever distributed,
shall be dated as of the Record Date, shall show the date of countersignature,
and on their face shall entitle the holders thereof to purchase such number of
shares of Common Stock (or following a Triggering Event, other securities, cash
or other assets, as the case may be) as shall be set forth therein at the price
set forth therein (such exercise price per share of Common Stock, the "Purchase
Price"), but the number of such shares and the Purchase Price shall be subject
to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
(whether or not in writing) which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof, upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend, modified as applicable to
apply to such Person:
The Rights represented by this Right Certificate are
or were beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Right Certificate and the Rights
represented hereby may become null and void in the circumstances specified in
Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company by one of its
authorized officers either manually or by facsimile signature. The Right
Certificates shall be countersigned by an authorized signatory of the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, issued and delivered with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer of
the Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
In case any authorized signatory of the Rights Agent
who shall have countersigned any of the Right Certificates shall cease to be
such signatory before delivery by the Company, such Right Certificates,
nevertheless, may be issued and delivered by the Company with the same force and
effect as though the person who countersigned such Right Certificates had not
ceased to be such signatory; and any Right Certificates may be countersigned on
behalf of the Rights Agent by any person who, at the actual date of the
countersignature of such Right Certificate, shall be a proper signatory of the
Rights Agent to countersign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such a signatory.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its office designated for such purpose, 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 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, the date of each of the Right
Certificates and the date of countersignature 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 Expiration Date, any Right Certificate or Right Certificates 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
shares of Common Stock (or following a Triggering Event, other securities, cash
or other assets, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or, in the case of a
transfer, such former 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 office of the Rights Agent
designated for such purpose, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence, as the Company shall reasonably request,
of the identity of the Beneficial Owner, Affiliates or Associates of such
Beneficial Owner or holder, or of any other Person with which such holder or any
of such holder's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting or disposing of securities of the Company. Thereupon the Rights Agent
shall, subject to Section 14 and Section 20(k) hereof, countersign and deliver
to the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment from a Right
Certificates holder 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, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request, and if requested by the Company, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) Subject to Section 7(e) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein, including, without limitation, the
restrictions on exercisability set forth in Sections 9 (c) , 11 (a) (iii) , 23
(a) and 24 (b) hereof) 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
designated office of the Rights Agent, together with payment of the aggregate
Purchase Price for the total number of shares of Common Stock (or other
securities, cash or other assets, as the case may be) as to which the Rights are
then exercisable, at or prior to the earliest of (i) the close of business on
200 - (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof or (iii) the time at which all
exercisable Rights are exchanged as provided in Section 24 hereof (such earliest
date being herein referred to as the "Expiration Date").
(b) The Purchase Price for each full share of
Common Stock pursuant to the exercise of a Right shall initially be$130.00
(being $65.00 per half share of Common Stock), shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be payable
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and the
certificate duly executed and completed accompanied by payment of the Purchase
Price for the number of shares of Common Stock (or other securities, cash or
other assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax, the Rights Agent shall thereupon, subject to Section
20(k), promptly (i) requisition from the Company certificates for the total
number of shares of Common Stock to be purchased, (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, (iii) promptly after receipt
of such certificates, 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. The payment of the Purchase Price must be made in cash or by
certified bank check or bank draft or money order payable to the order of the
Company or the Rights Agent. In the event that the Company is obligated to issue
securities, distribute property or pay cash pursuant to section 11(a)(iii)
hereof, the Company will make all arrangements necessary so that cash, property
or securities are available for issuance, distribution or payment by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the provisions
of Section 14 hereof.
(e) Notwithstanding anything in this Agreement
to the contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person which whom the Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding (whether or not
in writing) which has as a primary purpose or effect the avoidance of this
section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person, or any of its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement
to the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner, Affiliates or Associates of such Beneficial
Owner or holder, or of any other Person with which such holder or any of such
holder's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting or disposing of any securities of the Company as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or shall, at
the written request of the Company, destroy such canceled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Shares of
Common Stock. (a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock (and following the occurrence of a Triggering Event, out of its authorized
and unissued other securities), or out of its authorized and issued shares of
Common Stock (and, following the occurrence of a Triggering Event, out of its
authorized and issued other securities) held in its treasury, the number of
shares of Common Stock (and, following the occurrence of a Triggering Event,
other securities) that will be sufficient to permit the exercise in full of all
outstanding Rights (it being understood that any of the foregoing shares or
securities may also be reserved for other purposes) or will take such other
steps as are appropriate to assure that the number of such shares or securities
(or their equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as the shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities) issuable upon
the exercise of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable (but only to the extent that it is reasonably likely
that the Rights will be exercised), all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to
(i) file, as soon as practicable following the first occurrence of a Section
11(a)(ii) Event, or as soon as required by law, as the case may be, a
registration statement under the Securities Act of 1933, as amended (the "Act"),
with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the Expiration
Date. The Company will also take such action as may be appropriate under the
blue sky laws of the various states. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement and shall give simultaneous written notice to the Rights Agent
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement and notice to the Rights Agent at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualifications in such jurisdiction shall have
been obtained.
(d) The Company covenants and agrees that it
will take all such action as may be necessary to ensure that all shares of
Common Stock (and following the occurrence of a Triggering Event, other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees
that it will pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance or delivery of
the Right Certificates or of any shares of the Common Stock (or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required (a) to pay any transfer tax which may be payable in
respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for Common Stock (or
other securities, as the case may be) in a name other than that of the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or (b) to issue or deliver any certificates for a number of shares of
Common Stock (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 Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person
in whose name any certificate for any number of shares of Common Stock (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 such whole and/or
fractional shares of Common Stock (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 and shall show
the date of countersignature; provided, however, that if the date of such
surrender and payment is a date upon which Common Stock (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 shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Stock (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 stockholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend on the Common Stock
payable in shares of the Common Stock, (B) subdivide the outstanding Common
Stock, (C) combine the outstanding Common Stock into a smaller number of shares
or (D) issue any shares of its capital stock in a reclassification of Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, 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 Common Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon payment
of the Purchase Price then in effect, the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when Common Stock (or other securities) transfer books of the
Company were open, he or she would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this
agreement, in the event any Person, alone or together with its Affiliates and
Associates, becomes at any time after the Rights Dividend Declaration Date, an
Acquiring Person except as the result of a transaction set forth in Section
13(a) hereof, then, prior to the later of (x) the date on which the Company's
rights of redemption pursuant to Section 23(a) expire, or (y) five (5) days
after the date of the first occurrence of a Section 11(a)(ii) Event, proper
provision shall be made so that each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have a right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, such number of shares of Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price for a
full share of Common Stock by the number of shares of Common Stock for which a
Right is then exercisable and dividing that product by (y) 50% of the Current
Market Price per share of Common Stock of the Company (determined pursuant to
Section 11(d)) on the date of the occurrence of the event described above in
this subparagraph (ii) (such number of shares is hereinafter referred to as the
"Adjustment Shares"), provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence.
(iii) In the event that the number of
shares of Common Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Company shall (A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment Shares, upon exercise
of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) other equity securities of the Company
(including, without limitation, shares of preferred stock which a majority of
the Independent Directors and the Board of Directors of the Company have deemed
to have the same value as shares of Common Stock (such shares of preferred
stock, "Common Stock Equivalents")), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by a
majority of the Independent Directors and 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; provided, however, that if
the Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
rights of redemption pursuant to Section 23(a) expire (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this subparagraph (iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement and shall give concurrent written notice to the Rights Agent
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement and notice to the Rights Agent at such time as the
suspension is no longer in effect. For purposes of this subparagraph (iii), the
value of the Common Stock shall be the Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11
(a) (ii) Trigger Date and the value of any Common Stock Equivalent shall be
deemed to be the same as the value of Common Stock on such date. The Company
shall give the Rights Agent notice of the selection of any Common Stock
Equivalent under this subparagraph (iii).
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Stock (or securities having
substantially the same rights, privileges and preferences as the shares of
Common Stock ("Equivalent Common Stock") or convertible into Common Stock or
Equivalent Common Stock) at a price per share of Common Stock or Equivalent
Common Stock (or having a conversion price per share, if a security convertible
into Common Stock or Equivalent Common Stock) less than the Current Market Price
(as defined in Section 11(d) per share of Common Stock or Equivalent Common
Stock, as the case may be) 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, of which
the numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock or Equivalent Common Stock
which the aggregate offering price of the total number of shares of Common Stock
or Equivalent Common Stock 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 of which the denominator shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock and/or Equivalent Common Stock to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent. Shares of Common Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such 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 Common Stock (including any
such distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend payable in
Common Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the Current
Market Price per share of Common Stock (as defined in Section 11(d)) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Common Stock and of which the denominator shall be
such Current Market Price per share of Common Stock. Such adjustments shall he
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) For the purpose of any computation
hereunder, other than computations made pursuant to Section 11(a)(iii), the
"Current Market Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common Stock for
the thirty (30) consecutive Trading Days (as such term is hereinafter defined in
this paragraph (d)) immediately prior to such date and, for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of Common Stock is
determined during the period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such Common
Stock (other than the Rights) or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
Current Market Price shall be appropriately adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of the Common Stock are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of the Common Stock are listed or
admitted to trading or, if the shares of the Common Stock are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of Common Stock are not quoted by such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in Common Stock selected by the Board
of Directors of the Company. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such date shall be
as determined in good faith by the Independent Directors if the Independent
Directors constitute a majority of the Board of Directors or, in the event the
Independent Directors do not constitute a majority of the Board of Directors, by
an independent investment banking firm selected by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of New York are not authorized or
obligated by law or executive order to close. If the Common Stock is not
publicly held or not so listed or traded, "Current Market" Price per share shall
mean the fair value per share as determined in good faith by the Independent
Directors if the Independent Directors constitute a majority of the Board of
Directors or, in the event the Independent Directors do not constitute a
majority of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock.
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 mandates such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than shares
of Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
Section 11(a) through (p), inclusive, and the provisions of Sections 7, 9, 10,
13 and 14 with respect to Common Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of shares of
Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest tenth-thousandth) obtained by (i) multiplying
(x) the number of shares covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date
of any adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
shares of Common Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
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 the adjustment of the Purchase Price. The Company shall make a
public announcement and shall give simultaneous written notice to the Rights
Agent of its election to adjust the number of Rights, indicating the record date
for the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this subparagraph (i), the Company shall, as
promptly as practicable, cause to be distributed to holders of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of shares of Common Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause
an adjustment reducing the Purchase Price below the then par value, if any, of a
share of Common Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue such number of fully
paid and nonassessable shares of such Common Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised after
such record date of the number of shares of Common Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise over and above
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise 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 the Board of Directors of the Company
shall determine to be advisable in order that any consolidation or subdivision
of shares of Common Stock, issuance wholly for cash of any shares of Common
Stock at less than the Current Market Price, issuance wholly for cash of the
Common Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, stock dividends or issuance of rights, options or
warrants referred to hereinabove in this Section 11 hereafter made by the
Company to holders of its Common Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that,
after the Distribution Date, it will not, except as permitted by Sections 23, 24
and 27 hereof, take (nor will it permit any of its Subsidiaries to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(o) The Company covenants and agrees that it
shall not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(n)), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n)), or (iii) sell or transfer (or permit any of its Subsidiaries to sell or
transfer), in one or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(n)) if (x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(p) Notwithstanding anything in this Agreement
to the contrary, prior to the Distribution Date, the Company may, in lieu of
making any adjustment to the Purchase Price, the number of shares of Common
Stock eligible for purchase on exercise of each Right or the number of Rights
outstanding, which adjustment would otherwise be required by Section 11(a)(i),
11(b), 11(c), 11(h) or 11(i), make such other equitable adjustment or
adjustments thereto as the Board of Directors (whose determination shall be
conclusive) deems appropriate in the circumstances and not inconsistent with the
objectives of the Board of Directors in adopting this Agreement and such
Sections.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as provided in Sections 11
and 13, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment
and the adjusted Purchase Price, (b) promptly file with the Rights Agent and
with each transfer agent for the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 26. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. (a) In the event that, following the Shares
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with or into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(n)) and the Company
shall not be the continuing or surviving corporation of such consolidation or
merger (y) any Person (other than a subsidiary of the Company in a transaction
which complies with Section 11(n)) shall consolidate, merge with or into the
Company and the Company shall be the continuing or surviving corporation of such
consolidation or merger and in connection with such consolidation or merger, all
or part of the Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (z) the
Company shall sell 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 more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(n) hereof), then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
provided in Section 7(e)) shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly issued, fully paid, nonassessable and
freely tradable shares of Common Stock of the Principal Party (as hereinafter
defined) , not subject to any liens, encumbrances, rights of call or first
refusal, or other adverse claims as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price for a full share of Common Stock by
the number of shares of Common Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a) (ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such shares for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a) (ii)
Event by the Purchase Price for a full share of Common Stock in effect
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the Current Market Price per share of the Common Stock of such
Principal Party (determined in the manner described in Section 11 (d) ) on the
date of consummation of such consolidation, merger, sale or transfer; (ii) the
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 shall thereafter apply to such Principal Party, (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section 9) 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 shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(1) in the case of any transaction
described in (x) or (y) of the first sentence of Section 13(a), the Person that
is the issuer of any securities into which shares of Common Stock of the Company
are converted in such merger or consolidation and, if no securities are so
issued, the Person that is the other party to the merger or consolidation; and
(2) in the case of any transaction
described in (z) of the first sentence in Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions; provided, however, that in any
such case, (x) if the Common Stock of such Person is not at such time and has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another corporation the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other corporation and (y) if
such Person is a Subsidiary, directly or indirectly, of more than one
corporation, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such corporations is
the issuer of the Common Stock having the greatest market value.
(3) The Company shall not consummate
any Section 13 Event unless the Principal Party shall have a sufficient number
of authorized shares of its Common Stock which are neither outstanding nor
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party
(i) will prepare and file a
registration statement under the Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form, will
use its best efforts to cause such registration statement to become effective as
soon as practicable after such filing and will use its best efforts to cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date; and
(ii) will deliver to holders of the
Rights historical financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive Section 13
Events. In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company shall pay 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 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-thecounter 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 shares of Common Stock or Common Stock Equivalents upon exercise or
exchange of the Rights or to distribute certificates which evidence fractional
shares. In lieu of fractional shares of Common Stock or Common Stock
Equivalents, the Company may pay to the registered holders of Right Certificates
at the time the Rights evidenced thereby are exercised or exchanged as herein
provided an amount in cash equal to the same fraction of the current market
value of Common Stock or Common Stock Equivalents. For purposes of this Section
14(b), the current market value of one share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to Section
11(d)) for the Trading Day immediately prior to the date of such exercise or
exchange, as the case may be, and the current market value of any Common Stock
Equivalent shall be the same as the current market value of the Common Stock on
such date.
(c) The holder of a Right by the acceptance of
the Right expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right, except as otherwise
permitted by this Section 14.
Section 15. Rights of Action. All rights of action
in respect of this Agreement are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder 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 Stock;
(b) after the Distribution Date, the Right
Certificates will be transferable only on the registry books of the Rights Agent
if surrendered at the office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request;
(c) subject to Section 6 and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatever,
and neither the Company nor the Rights Agent shall be required to 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
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, that the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
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 number of
shares of Common Stock or any other securities of the Company that 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), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised or
exchanged for Common Stock 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 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 (including the reasonable fees and expenses of
counsel), 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 Common Stock or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, instruction, adjustment notice, 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.
In addition to the foregoing, the Rights Agent shall
be protected and shall incur no liability for, or in respect of, any action
taken or omitted by it in connection with its administration of this Agreement
in reliance upon (i) the proper execution of the certification appended to the
Form of Assignment and the Form of Election to Purchase included as part of
Exhibit B hereto (the "Certification"), unless the Rights Agent shall have
actual knowledge that, as executed, the Certification is untrue or (ii) the
non-execution or failure to complete the Certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such nonexecution or failure.
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 corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor 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.
(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
Chairman of the Board, the President, any Senior Vice President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or willful misconduct. The issuance or
non-issuance of a Right Certificate or Common Stock or other security issued in
lieu of Common Stock in accordance with instructions given to the Rights Agent
by the Company pursuant to Section 20(k) hereof or in accordance with the terms
hereof shall not constitute negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Common Stock to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of Common Stock will, when 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 and certificates delivered pursuant to any provision hereof from any
one of the Chairman of the Board, the President, any Senior Vice President, any
Vice President, the Secretary or the Treasurer of the Company, and is authorized
to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer. An
application by the Rights Agent for instructions may set forth in writing any
action proposed to be taken or omitted by the Rights Agent with respect to its
duties and obligations under this Agreement and the date on and/or after which
such action shall be taken, and the Rights Agent shall not be liable for any
action taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be less
than one Business Day after the Company receives such application) without the
consent of the Company unless, prior to taking or omitting such action, the
Rights Agent has received written instructions in response to an application
specifying the actions to be taken or omitted.
(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 by 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, however,
that reasonable care was exercised in the selection thereof.
(j) No provision of this Agreement shall
require the Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response, the
Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting the Company. The Company shall
give the Rights Agent prompt written instructions as to the action to be taken
regarding the Right Certificates involved. The Rights Agent shall not be liable
for acting in accordance with such instructions.
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 thirty (30) days' notice in writing mailed to the
Company by registered or certified mail, and, at the Company's expense, to the
holders of the Right Certificates by first class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the Company shall become
the temporary Rights Agent and 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 New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York), in good standing, having a
principal office in the State of New York, which is authorized under such laws
to exercise corporate trust powers and is subject to supervision or examination
by federal or state authority or which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $25 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the 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. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued, and (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
Section 23. Redemption and Termination. (a) The
Board of Directors of the Company may, at its option, at any time prior to the
earlier of (x) the close of business on the tenth day following the Shares
Acquisition Date (or if the Shares Acquisition Date shall have occurred prior to
the Record Date, the close of business on the tenth day following the Record
Date), or (y) the Final Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right as 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"), and the Company may, at its option, pay
the Redemption Price either in shares of its Common Stock (valued at their
Current Market Price as defined in Section 11(d) on the date of the redemption),
other securities, cash or other assets; provided, however, that if the Board of
Directors of the Company authorizes redemption of the Rights in either of the
circumstances set forth in clauses (x) or (y) below then there must be
Independent Directors in office and such authorization shall require the
concurrence of a majority of the Independent Directors: (x) such authorization
occurs on or after the Shares Acquisition Date or (y) such authorization occurs
on or after the date of a change (resulting from a proxy or consent
solicitation) in the composition of a majority of the Board of Directors of the
Company from the Board that was in office at the commencement of such
solicitation if any Person who is a participant in such solicitation has stated
(or if upon the commencement of such solicitation a majority of the Board of
Directors of the Company has determined in good faith) that such Person (or any
of its Affiliates or Associates) intends to take, or may consider taking, any
action which would result in such Person becoming an Acquiring Person or which
would cause the occurrence of a Triggering Event. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(b) In deciding whether or not to exercise the
Company's right of redemption hereunder, the Board of Directors of the Company
shall act in good faith, in a manner they reasonably believe to be in the best
interests of the Company and with such care, including reasonable inquiry, skill
and diligence, as a person of ordinary prudence would use under similar
circumstances, and they may consider the long-term and short-term effects of any
action upon employees, customers and creditors of the Company and upon
communities in which offices or other establishments of the Company are located,
and all other pertinent factors.
(c) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right held. Within 10 days after the
action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to the Rights Agent and to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of 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, and other than in connection with the repurchase of Common Stock prior to
the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of
the Company may, at its option (provided that there are then Independent
Directors in office and a majority of the Independent Directors concur), at any
time and from time to time on or after a Section 11(a)(ii) Event, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
subsection (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 shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding, or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock or for issuance upon exchange of the
Rights.
(d) In any exchange pursuant to this Section 24,
the Company, at its option, may substitute for any share of Common Stock
exchangeable for a Right (i) Common Stock Equivalents (ii) cash, (iii) debt
securities of the Company, (iv) other assets, or (v) any combination of the
foregoing, having an aggregate value which a majority of the Independent
Directors and the Board of Directors of the Company shall have determined in
good faith to be equal to the Current Market Price of one share of Common Stock
(determined pursuant to Section 11(d) hereof) on the Trading Date immediately
preceding the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the
Company shall propose at any time following the Distribution Date (a) to pay any
dividend payable in stock of any class to the holders of Common Stock or to make
any other distribution to the holders of Common Stock (other than a regular
periodic cash dividend), or (b) to offer to the holders of Common Stock rights
or warrants to subscribe for or to purchase any additional shares of Common
Stock or shares of stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of Common Stock (other than a
reclassification involving only the subdivision of outstanding Common Stock), or
(d) to effect any consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n) hereof), or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(n) hereof), or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right, in accordance with
Section 26, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or Rights,
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 Stock, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered
by clause (a) or (b) above at least twenty (20) days prior to the record date
for determining holders of the Common Stock for purposes of such action, and in
the case of any such other action, at least twenty (20)) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of the Common Stock, whichever shall be the earlier.
In case a Section 11(a)(ii) Event shall occur, then,
in any such case, the Company shall as soon as practicable thereafter give to
the Rights Agent and to each holder of a Right, to the extent feasible and in
accordance with Section 26 a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a), (ii) and all references in the preceding paragraph to Common
Stock shall be deemed to thereafter refer to other securities.
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:
National Fuel Gas Company
10 Lafayette Square
Buffalo, New York 14203
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
<PAGE>
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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. Prior to
the earlier of the Distribution Date or the Shares Acquisition Date and subject
to the penultimate sentence of this Section 27, the Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates. From and after the earlier of the Distribution Date or the
Shares Acquisition Date, and subject to the penultimate sentence of this Section
27, the Company may from time to time supplement or amend this Agreement without
the approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
lengthen the time period during which the Rights may be redeemed following the
Shares Acquisition Date for up to an additional twenty days beyond the time
period set forth in Section 23 (a) (provided, however, that any such lengthening
shall be effective only if there are Independent Directors and shall require the
concurrence of a majority of such Independent Directors) or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment would adversely
affect its interests under this Agreement. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment shall be made on or after
the Distribution Date which changes the Redemption Price, the Final Expiration
Date, the Purchase Price or the number of shares of Common Stock for which a
Right is then exercisable. Prior to the earlier of the Shares Acquisition Date
or the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Determinations and Actions by the Board
of Directors. For all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial owner, shall be made in
accordance with the provisions of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company (and,
where specifically provided for herein, the Independent Directors) shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or the Company (or, as
expressly provided, the Independent Directors), or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for the purpose of clause (ii)
below, all omissions with respect to the foregoing) which are done or made by
the Board (or, as provided for, by the Independent Directors) in good faith,
shall (i) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (ii) not subject
the Board or the Independent Directors to any liability to the holders of the
Right Certificates.
Section 30. 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 Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. Severability. If any term, provision,
covenant, or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction
is held by such court or authority to be invalid, void or unenforceable and the
Board of Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the close of
business on the tenth day following the date of such determination by the Board
of Directors.
Section 32. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New Jersey and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
[SEAL]
NATIONAL FUEL GAS COMPANY
By:
Name:
Title:
Attest:
By:
Name:
Title:
[SEAL]
-----------------------
By:
Name:
Title:
Attest:
By:
Name:
Title:
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS MAY NOT BE EXERCISABLE AND THE RIGHTS AGREEMENT
MAY BE AMENDED WITHOUT THE APPROVAL OF THE RIGHTS OWNERS.
NATIONAL FUEL GAS COMPANY
Right Certificate
This certifies that or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement dated as
of , 199_ (the "Rights Agreement") between National Fuel Gas Company, a New
Jersey corporation (the "Company") and _______________________ (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Buffalo, New York time) on , 200_ at the designated office of the Rights Agent,
or its successors as Rights Agent, in _____________, New York, one-half of one
fully paid, nonassessable share of the Common Stock, $1.00 par value (the
"Common Stock"), of the Company, at a purchase price of $130.00 per share (the
"Purchase Price"), being $65.00 per half share, upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase and related
certificate duly executed, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request. The number of
Rights evidenced by this Right Certificate (and the number of shares which may
be purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of 1996, based on
the Common Stock of the Company as constituted at such date.
A-1
Upon the occurrence of a Section
11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights
evidenced by this Right certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement) , (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who after such transfer,
became an Acquiring Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares of Common Stock (or, in
certain circumstances, other securities) which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
This Right Certificate is subject to
all of the terms, provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent, and at the executive offices of the
Company.
This Right Certificate, with or
without other Right Certificates, upon surrender at the designated office of the
Rights Agent, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request, 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
shares of Common Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof, along with a signature guarantee and such other
and further documentation as the Rights Agent may
A-2
reasonably request, another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the
Rights Agreement, the Rights evidenced by this Certificate (a) may be redeemed
by the Company at its option at a redemption price of $.01 per Right prior to
the earlier of the close of business on (i) the tenth day following the Shares
Acquisition Date and (ii) the Final Expiration Date or (b) may be exchanged in
whole or in part for shares of Common Stock and/or other securities, cash or
other assets of the Company deemed to have the same value as shares of Common
Stock, at any time after a Section 11(a)(ii) Event. The Rights Agreement may be
amended without the approval of the holders of the Rights as and to the extent
set forth therein.
No fractional shares of Common Stock
will be issued upon the exercise or exchange of any Right or Rights evidenced
hereby, but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common Stock or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised or exchanged for Common Stock as provided in the Rights Agreement.
This Right Certificate shall not be
valid or obligatory for any purpose until it shall have been countersigned by
the Rights Agent.
A-3
WITNESS the facsimile signature of
the proper officers of the Company and its corporate seal. Dated as of 1996.
[SEAL]
ATTEST: NATIONALFUEL GAS COMPANY
By: By:
Name: Name:
Title: Title:
Countersigned:
- -----------------------,
as Rights Agent
By:
Authorized Signature
Date:
A-4
<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 Certificates.)
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:
(Signatures must be guaranteed.)
A-5
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate space that:
Exercising this Right Certificate will ____ will not
_____ enable the undersigned, its Affiliates, its Associates and/or any other
Person with which the undersigned or any of the undersigned's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of
securities of the Company to obtain, individually or in the aggregate,
beneficial ownership of Common Stock or other securities that have 10% or more
of the aggregate voting power of the outstanding shares of the Common Stock and
other securities having voting power.
Dated:
Signature
Signature Guaranteed:
(Signatures must be guaranteed.)
A-6
<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-7
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights evidenced by the Right
Certificate.)
To National Fuel Gas Company:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the shares of Common Stock
issuable upon the exercise of such Rights (or such other securities of the
Company or of any other Person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security or other taxpayer 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 taxpayer identifying number
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
Dated: ___________, ____
- ---------------------------------
Signature
Signature Guaranteed:
(Signatures must be guaranteed.)
A-8
<PAGE>
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK EXHIBIT B
On ______________, 199_, the Board of Directors of National Fuel Gas
Company (the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, $1.00 par value, of the Company (the "Common
Stock") to stockholders of record at the close of business on ____________, 199_
(the "Record Date"). The Rights are to be issued pursuant to a shareholder
rights plan which was approved by the Board of Directors on March 18, 1996. Each
Right entitles the registered holder to purchase from the Company one-half of
one share of common Stock at a price of $130 per share (the "Purchase Price"),
being $65.00 per half share, subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and ___________________________, as Rights Agent (the "Rights
Agent").
Distribution Date; Transfer of Rights
- ------------------------------
Until the earlier to occur of (i) ten days following the date (the
"Shares Acquisition Date") of the public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of Common Stock or other
voting securities ("Voting Stock") that have 10% or more of the voting power of
the outstanding shares of Voting Stock or (ii) ten days following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in such person acquiring, or
obtaining the right to acquire, beneficial ownership of Voting Stock having 10%
or more of the voting power of the outstanding shares of Voting Stock (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Company's Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate. The Rights
Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Company's Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date upon transfer or new
issuance of the Company's Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the Company's Common Stock certificates outstanding as of the Record Date will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Common Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
B-1
<PAGE>
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of Business on _______________, 200_, unless earlier
redeemed or exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
- ---------------------------------------------
At any time following the Distribution Date, each holder of a Right
will thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the Purchase Price of the Right then in effect.
Notwithstanding any of the foregoing, following the occurrence of such event set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
- ---------------------------------------------
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction, or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, Common Stock of the acquiring company having a value equal to two
times the Purchase Price of the Right then in effect.
Adjustments to Purchase Price
- -------------------------
The Purchase Price payable, and the number of shares of Common Stock
(or other securities, as the case may be) issuable upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification of,
the Common Stock, (ii) upon the grant to holders of the Common Stock of certain
rights or warrants to subscribe for or purchase shares of the Common Stock or
convertible securities at less than the then Current Market Price of the Common
Stock or (iii) upon the distribution to holders of the Common Stock of evidences
of indebtedness or assets (excluding regular periodic cash dividends or
dividends payable in the Common Stock) or of subscription rights or warrants
(other than those referred to above). Prior to the Distribution Date, the Board
of Directors of the Company may make such equitable adjustments as it deems
appropriate in the circumstances in lieu of any adjustment otherwise required by
the foregoing.
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment or (ii) the time at which cumulative adjustments require
an adjustment of at least 1% in such Purchase Price. No fractional shares of
Common Stock will be issued and, in lieu thereof, an adjustment in cash will B-2
be made based on the market price of the Common Stock on the last trading date
prior to the date of exercise.
Redemption and Exchange of Rights
- -----------------------------
At any time prior to 5:00 P.M. Buffalo, New York time on the tenth day
following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Under certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require the concurrence of a majority of the Independent Directors.
Immediately upon the action of the Board of Directors of the Company electing to
redeem the Rights with, if required, the concurrence of the Independent
Directors, the Company shall make announcement thereof, and upon such action,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
At any time after the occurrence of the event set forth under the
heading "Exercise of Rights for Common Stock of the Company" above, the Board of
Directors may exchange the Rights (other than Rights owned by an Acquiring
Person, which have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, and/or other securities, cash or other assets deemed
to have the same value as one share of Common Stock, per Right, subject to
adjustment.
Until a Right is exercised or exchanged for Common Stock, 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. While
the distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for Common Stock or other
consideration of the Company or for the stock of the Acquiring Person as set
forth above, or are exchanged as provided in the preceding paragraph.
Amendments to Terms of the Rights
- -----------------------------
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights prior to the Distribution Date. Thereafter, the provisions of the Rights
Agreement may be amended by the Board of Directors in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interest of any
Acquiring Person); provided, however, that no supplement or amendment may be
made on or after the Distribution Date which changes those provisions relating
to the principal economic terms of the Rights. The Board of Directors may also,
with the concurrence of a majority of the Independent Directors, extend the
redemption period for up to an additional 20 days.
B-3
<PAGE>
The term "Independent Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Independent
Directors but shall not include an Acquiring Person or any representative
thereof.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
_____________, 199_. A copy of the Rights Agreement is available free of charge
form the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
B-4
EXHIBIT H
[Suggested Notice of Proposed Transaction
for Publication in the Federal Register]
SECURITIES AND EXCHANGE COMMISSION
(Release No. __________)
NATIONAL FUEL GAS COMPANY
Notice of Application for Authorization to Implement a Stockholder Rights Plan.
______________, 1996
National Fuel Gas Company ("National"), 10 Lafayette Square, Buffalo,
New York 14203, has filed a declaration under Sections 6(a), 7, 9(a), 10 and
12(c) of the Public Utility Holding Company Act of 1935 ("Act"), and Rules 42
and 46 thereunder.
National seeks authorization to implement a stockholder rights plan
("Plan") and to enter into a related Rights Agreement ("Agreement"). To
implement the Plan, the board of directors of National would declare a dividend
distribution of one right ("Right") for each outstanding share of common stock,
$1.00 par value, of National ("Common Stock") to stockholders of record at the
close of business on a specified record date. Each Right would entitle the
holder to purchase from National one-half of a share of Common Stock at a price
of $130 per share ($65.00 per half-share) subject to adjustment ("Purchase
Price"). Initially, the Rights will be evidenced by the certificates for shares
of Common Stock to which they relate, and will be transferable only with the
Common Stock. Until a Right is exercised or exchanged for Common Stock, as
described below, the holder, as such, will have no rights as a stockholder of
National.
Upon the earlier to occur of (a) ten days after the date ("Shares
Acquisition Date") of the public announcement that a person or affiliated group
("Acquiring Person") has acquired or obtained the right to acquire beneficial
ownership of securities having 10% or more of the voting power of the
outstanding voting securities of National, or (b) ten days after commencement
of, or announcement of the intention of a person to make, a tender or exchange
offer that would result in such person acquiring, or obtaining the right to
acquire, beneficial ownership of securities having 10% or more of the voting
power of the outstanding voting securities of National (such earlier date being
the "Distribution Date"), separate certificates evidencing the Rights will be
mailed to holders of record of Common Stock as of the close of business on the
Distribution Date.
The Rights will become exercisable after the Distribution Date on the
following terms: (1) Each holder (other than an Acquiring Person) may exercise a
Right and receive Common Stock (or, in certain cases, cash, property or other
securities of National) having a value equal to two times the Purchase Price of
the Right then in effect. Rights that are beneficially owned by an Acquiring
Person will be null and void. (2) If, after the Shares Acquisition Date,
National is acquired in a business combination transaction in which 50% or more
of its assets or earning power are sold or transferred, each holder of a Right
will have the right to receive, upon exercise, common stock of the acquiring
company having a value equal to two times the Purchase Price of the Right then
in effect.
The Purchase Price is subject to adjustment to prevent dilution in
certain situations involving stock dividends, splits, combinations or
reclassification; grants of warrants to subscribe for or purchase Common Stock
or convertible securities at less than market price; or distribution to holders
of Common Stock of evidences of indebtedness or assets or of subscription rights
or warrants. Adjustments will be required upon the earlier of three years from
the date of the event giving rise to the adjustment or the time when cumulative
adjustments require a 1% or more change in the Purchase Price.
National may redeem the Rights in whole, but not in part, prior to 5
p.m. on the tenth day after the Shares Acquisition Date (subject to extension by
the board of directors of National for an additional 20 days) at a price of
$0.01 per Right, payable in cash or stock. In addition, at any time after a
person becomes an Acquiring Person, the board may exchange the Rights (other
than Rights held by an Acquiring Person, which become void), in whole or in
part, at an exchange ratio of one share of Common Stock (and/or other
securities, cash or other assets having the same value as a share of Common
Stock) per Right, subject to adjustment.
The Agreement may be amended by the board of directors of National
without the consent of the holders of Rights prior to the Distribution Date.
Thereafter, the board may amend the Agreement in order to cure any ambiguity,
defect or inconsistency or to make changes that do not adversely affect the
interests of holders of Rights (other than any Acquiring Person), provided that
no amendment may be made on and after the Distribution Date that changes the
principal economic terms of the Rights.
The application or declaration and any amendments thereto are
available for public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a hearing should
submit their views in writing by _______________ to the Secretary, Securities
and Exchange Commission, Washington, D.C. 20549, and serve a copy on the
applicants at the addresses specified above. Proof of service (by affidavit or,
in the case of an attorney at law, by certificate) should be filed with the
request. Any request for a hearing shall identify specifically the issues of
fact or law that are disputed. A person who requests will be notified of any
hearing, if ordered, and will receive a copy of any notice or order issued in
this matter. After said date, the proposal, as filed or as amended, may be
authorized.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES S-1
CONSOLIDATED BALANCE SHEET
AT FEBRUARY 29, 1996
(UNAUDITED)
(Thousands of Dollars)
ASSETS
PROPERTY, PLANT AND EQUIPMENT $2,374,027
LESS - ACCUMULATED DEPRECIATION,
DEPLETION AND AMORTIZATION 704,665
-----------
1,669,362
-----------
CURRENT ASSETS
CASH & TEMP. CASH INVESTMENTS 16,501
RECEIVABLES - NET 220,587
UNBILLED UTILITY REVENUE 55,559
GAS STORED UNDERGROUND 1,690
MATERIALS AND SUPPLIES 23,610
PREPAYMENTS 25,466
-----------
343,413
-----------
OTHER ASSETS
RECOVERABLE FUTURE TAXES 93,658
UNAMORTIZED DEBT EXPENSE 25,934
OTHER REGULATORY ASSETS 43,417
DEFERRED CHARGES 11,599
OTHER 35,707
-----------
210,315
-----------
TOTAL ASSETS $2,223,090
===========
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON STOCK $ 37,576
PAID IN CAPITAL 387,669
EARNINGS REINVESTED IN THE
BUSINESS 436,853
-----------
862,098
LONG TERM DEBT, NET OF
CURRENT PORTION 474,000
-----------
TOTAL CAPITALIZATION 1,336,098
-----------
CURRENT AND ACCRUED LIABILITIES
NOTES PAYABLE TO BANKS AND
COMMERCIAL PAPER 233,900
CURRENT PORTION OF LONG-TERM
DEBT 30,000
ACCOUNTS PAYABLE 78,741
AMOUNTS PAYABLE TO CUSTOMERS 31,917
OTHER ACCRUALS AND CURRENT
LIABILITIES 134,942
-----------
509,500
-----------
DEFERRED CREDITS
ACCUMULATED DEFERRED INCOME
TAXES 290,947
TAXES REFUNDABLE TO CUSTOMERS 23,080
UNAMORTIZED INVESTMENT TAX CREDIT 13,102
OTHER DEFERRED CREDITS 50,363
-----------
377,492
-----------
TOTAL CAPITALIZATION AND LIABILITIES $2,223,090
===========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES S-2
CONSOLIDATED STATEMENTS
OF INCOME AND EARNINGS REINVESTED IN THE BUSINESS
FOR THE TWELVE MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Thousands of Dollars)
OPERATING REVENUES $1,084,630
-----------
OPERATING EXPENSES:
PURCHASED GAS 429,365
OPERATION EXPENSE 265,005
MAINTENANCE 26,946
PROPERTY, FRANCHISE &
OTHER TAXES 94,795
DEPRECIATION, DEPLETION &
AMORTIZATION 81,550
INCOME TAXES - NET 48,962
-----------
946,623
-----------
OPERATING INCOME 138,007
OTHER INCOME 5,552
-----------
INCOME BEFORE INTEREST CHARGES 143,559
-----------
INTEREST CHARGES:
INTEREST ON LONG-TERM
DEBT 39,958
OTHER INTEREST 16,084
-----------
56,042
-----------
NET INCOME AVAILABLE FOR COMMON
STOCK 87,517
EARNINGS REINVESTED IN THE BUSINESS
BALANCE AT MARCH 1, 1995 409,376
-----------
496,893
DIVIDENDS ON COMMON STOCK 60,040
-----------
BALANCE AT FEBRUARY 29, 1996 $ 436,853
===========
EARNINGS PER COMMON SHARE $ 2.34
===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 37,447,365
===========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
s-2
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES S-3
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
1) The Notes to the Consolidated Financial Statements appearing under Item 8 of
National Fuels Gas Company's September 30, 1995 Form 10-K (File No. 1-3880)
are incorporated herein by reference.
2) The Notes to Consolidated Financial Statements appearing under Item 1 of
National Fuel Gas Company's December 31, 1995 Form 10-Q (File No. 1-3880)
are incorporated herein by reference.
3) Analysis of Investments in Associated Companies at February 29, 1996 (per
Books- Thousands of Dollars):
<TABLE>
<CAPTION>
Earnings
Reinvested
Par or in the Unremitted Total Investment
Stated Value Business Earnings in Associated
of Subsidiary Paid in at Since Companies at
Stock Capital Acquisition Acquisition Equity
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
National Fuel Gas Company:
National Fuel Gas Distribution $ 59,170 $121,668 $ 4,636 $241,034 $426,508
National Fuel Gas Supply Corpor 25,345 35,833 2,453 150,555 214,186
Seneca Resources Corporation 500 104,035 6 18,936 123,477
Leidy Hub, Inc. 4 1,365 (699) 670
Highland Land & Minerals, Inc. 5 445 4,413 4,863
Utility Constructors, Inc. 1 5,559 (1,550) 4,010
Data-Track Account Services, Inc. 1 499 110 610
National Fuel Resources, Inc. 10 3,490 4,725 8,225
Horizon Energy Development, Inc 1 2,499 (1,486) 1,014
Consolidating Adjustment 7,249 7,249
-----------------------------------------------------------------
85,037 275,393 7,095 423,287 790,812
National Fuel Gas Supply Corporation:
Seneca Resources Corporation 61 61
-----------------------------------------------------------------
$ 85,037 $275,454 $ 7,095 $423,287 $790,873
=================================================================
</TABLE>
