SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
NORTHWEST NATURAL GAS COMPANY
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(Exact Name of Registrant as Specified in its Charter)
Oregon 93-0256722
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(State of Incorporation or organization) (I.R.S. Employer
Identification No.)
220 N.W. Second Avenue
Portland, Oregon 97209
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Common Stock
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(Title of Class)
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED.
On February 22, 1996, the Board of Directors of
Northwest Natural Gas Company (the "Company") declared a dividend
of one common share purchase right (a "Right") for each
outstanding share of common stock, par value $3-1/6 per share, of
the Company (a "Common Share"). The dividend is payable to the
shareholders of record as of the close of business on March 15,
1996 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company at any time following the
Distribution Date (as defined below) one-tenth of a Common Share
at an initial purchase price of $10.00, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights
are set forth in the Rights Agreement dated as of February 27,
1996 (the "Rights Agreement"), by and between the Company and
Boatmen's Trust Company as rights agent.
Initially, the Rights will be evidenced, with respect
to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate. The Rights will
separate from the Common Shares upon the Distribution Date which
shall be the earlier to occur of (i) the close of business on the
tenth day following a public announcement that a person or group
of affiliated or associated persons (collectively, a "Person")
have acquired beneficial ownership of 15% or more of the
outstanding Common Shares (such Person being hereinafter referred
to as an "Acquiring Person") or (ii) the close of business on the
tenth business day (or such later date as may be determined by
action of the Board of Directors of the Company prior to such
time as any Person becomes an Acquiring Person) following the
commencement of, or the first public announcement of an intention
of any Person to commence, a tender offer or exchange offer the
consummation of which would result in such Person becoming an
Acquiring Person, provided that such Person is not the Company or
any subsidiary of the Company, any employee benefit plan of the
Company or of any subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan.
Until the Distribution Date, (i) the Rights will be
evidenced by the certificates for Common Shares and will be
transferred with and only with such Common Share certificates,
(ii) new certificates for Common Shares issued after the Record
Date will contain a notation incorporating the Rights Agreement
by reference, and (iii) the surrender for transfer of any such
certificate for Common Shares outstanding on the Record Date,
with or without a copy of the Summary of Rights being attached
thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented thereby. As soon
as practical following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close
of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. Subject to certain
exceptions, only Common Shares issued prior to the Distribution
Date will be issued with Rights.
The Rights are not exercisable until the Distribution
Date and will expire on the earlier of (i) the close of business
on March 15, 2006, (ii) the time at which the Rights are redeemed
by the Company or (iii) if a Person has become an Acquiring
Person, the time at which the Rights (other than Rights which are
void as described below) are exchanged for Common Shares at an
exchange ratio of one Common Share per Right, as adjusted by the
Company (provided, however, such exchange may not take effect at
any time after any Person becomes a beneficial owner of 50% or
more of the Common Shares then outstanding).
The Purchase Price payable and the number of Common
Shares issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution in the event of
(i) a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) the issuance of
rights, options or warrants to subscribe for or purchase Common
Shares at a price, or securities convertible into Common Shares
at a conversion price, less than the then current market price
for the Common Shares, or (iii) a distribution to all holders of
the Common Shares of evidences of indebtedness or assets
(excluding regular quarterly cash dividends or dividends payable
in Common Shares) or subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price. No
fractional Rights will be issued and, in lieu thereof, holders of
the Rights with regard to which such fractional Rights would
otherwise be issuable will be paid an amount in cash equal to the
same fraction of the current market value of a whole Right.
In the event, directly or indirectly, (i) the Company
consolidates with, or merges with and into, any other person,
(ii) any person consolidates with the Company, or merges with and
into the Company and the Company is the continuing or surviving
corporation of such merger and, in connection therewith, all or
part of the Common Shares is changed into or exchanged for stock
or other securities of any person (including the Company) or cash
or any other property, or (iii) the Company sells or otherwise
transfers in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the
Company and its subsidiaries, taken as a whole, to any other
person, proper provision will be made so that each holder of a
Right, except Rights which previously have been voided as
indicated below, will thereafter have the right to receive, upon
exercise thereof for a purchase price equal to ten times the
current Purchase Price of the Right, that number of shares of
common stock of the other person which at the time of such
transaction will have a market value equal to twenty times the
Purchase Price of the Right.
In the event that any Person becomes an Acquiring
Person, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the
right to receive, upon exercise, for a purchase price equal to
ten times the Purchase Price of the Right, that number of Common
Shares having a market value equal to twenty times the Purchase
Price of the Right.
Any Rights acquired or beneficially owned by any
Acquiring Person or certain related parties thereto will be void,
and any holder of such Rights will thereafter have no right to
exercise such Rights under any provision of the Rights Agreement.
At any time prior to such time that a Person becomes an
Acquiring Person, the Board of Directors of the Company may
redeem the then outstanding Rights in whole, but not in part, at
a price of $.01 per Right, subject to adjustment (the "Redemption
Price"). The redemption of the rights may be made effective at
such time on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of the Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights. After the Distribution Date, no such amendment may
adversely affect the interests of the holders of the Rights.
Issuance of the Common Shares upon exercise of the
Rights will be subject to any necessary regulatory approvals.
Until a Right shall be exercised, the holder thereof, as such,
will have no right as a shareholder of the Company, including
without limitation, the right to vote or to receive dividends.
As of January 31, 1996, the Company had 14,832,825
Common Shares outstanding and no Common Shares of the Company in
the treasury. Each Common Share of the Company outstanding at
the close of business on the Record Date will receive one Right.
In addition, prior to the Distribution Date, one Right (subject
to adjustment) will be deemed to be delivered for each Common
Share issued or transferred by the Company after the Record Date.
Also, following the Distribution Date and prior to the expiration
or redemption of the Rights, the Company (i) will with respect to
Common Shares issued or sold pursuant to exercise, conversion or
exchange of certain securities of the Company, and (ii) may in
any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights in connection with such
issuance or sale. The Company has initially reserved for
issuance upon exercise of the Rights 2,000,000 Common Shares.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a Person that attempts
to acquire the Company on terms not approved by the Company's
Board of Directors. The Rights should not interfere with any
merger or other business combination approved by the Board of
Directors of the Company because the Rights may be redeemed by
the Company prior to the time that a Person acquires beneficial
ownership of 10% or more of the Common Shares.
The Rights Agreement which specifies the terms of the
Rights and includes as Exhibit A thereto a form of the Right
Certificate is attached hereto as Exhibit 1 and is incorporated
herein by reference. The foregoing description of the Rights
does not purport to be complete and is qualified in its entirety
by reference to such Exhibit.
ITEM 2. EXHIBITS.
1. Rights Agreement, dated as of February 27, 1996,
between Northwest Natural Gas Company and Boatmen's
Trust Company, which includes as Exhibit A thereto the
form of a Right Certificate and Exhibit B thereto the
Summary of Rights to Purchase Common Shares.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized.
NORTHWEST NATURAL GAS COMPANY
Dated: February 27, 1996 By: Bruce R. DeBolt
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Name: Bruce R. DeBolt
Title: Senior Vice President
and Chief Financial
Officer
<PAGE>
EXHIBIT INDEX
Exhibit Description
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1 Rights Agreement, dated as of
February 27, 1996, between Northwest
Natural Gas Company and Boatmen's Trust
Company, which includes as Exhibit A
thereto the form of a Right Certificate
and Exhibit B thereto the Summary of
Rights to Purchase Common Shares
EXHIBIT 1
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NORTHWEST NATURAL GAS COMPANY
and
BOATMEN'S TRUST COMPANY
Rights Agent
Rights Agreement
Dated as of February 27, 1996
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<PAGE>
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . 7
Section 3. Issue of Right Certificates . . . . . . . . . . . . 7
Section 4. Form of Right Certificates . . . . . . . . . . . . . 10
Section 5. Countersignature and Registration . . . . . . . . . 11
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . . . . . . . . . . 12
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . . . . 14
Section 8. Cancellation and Destruction of Right
Certificates . . . . . . . . . . . . . . . . . . . . 15
Section 9. Reservation and Availability of Common Shares . . . 16
Section 10. Common Shares Record Date. . . . . . . . . . . . . . 18
Section 11. Adjustment of Purchase Price, Number of Shares
or Number of Rights . . . . . . . . . . . . . . . . . 18
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares . . . . . . . . . . . . . . . . . . . . . . 31
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . 31
Section 14. Fractional Rights and Fractional Shares . . . . . . 33
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . 35
Section 16. Agreement of Right Holders . . . . . . . . . . . . . 36
Section 17. Right Certificate Holder Not Deemed a Shareholder . . 37
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . 37
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . 38
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . 40
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . 43
Section 22. Issuance of New Right Certificates . . . . . . . . . 45
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . 46
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . 47
Section 25. Notice of Certain Events . . . . . . . . . . . . . . 49
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . 51
Section 27. Supplements and Amendments . . . . . . . . . . . . . 52
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . 53
Section 29. Benefits of this Agreement . . . . . . . . . . . . . 53
Section 30. Severability . . . . . . . . . . . . . . . . . . . . 53
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . 53
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . 54
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . 54
Signatures
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
<PAGE>
RIGHTS AGREEMENT
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Agreement, dated as of February 27, 1996, between Northwest
Natural Gas Company, an Oregon corporation (the "Company"), and Boatmen's
Trust Company (the "Rights Agent").
The Board of Directors of the Company has authorized and declared
a dividend of one common share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding on March 15, 1996
(the "Record Date"), each Right representing the right to purchase one-
tenth of a Common Share, upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of
one Right with respect to each Common Share that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
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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 and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined)
of 15% or more of the Common Shares then outstanding, but shall not
include the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the Company or
any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding; provided, however,
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that if a Person becomes the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding by reason of
share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company (other than as part of a
pro rata distribution of Common Shares of the Company to all
--- ----
holders of such Common Shares), then such Person shall be deemed
to be an "Acquiring Person".
(b) "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 of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however,
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that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a
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Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange
Act and (2) is not also 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 (other than customary agreements with and
between underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by
the proviso to Section l(c)(ii)(B) hereof) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of Oregon
and/or the State of New York are authorized or obligated by law or
executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Pacific Time, on such date; provided, however, that if such date is
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not a Business Day it shall mean 5:00 P.M., Pacific Time, on the
next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $3-1/6 per share, of
the Company. "Common Shares" when used with reference to any Person
other than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if
such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(j) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(l) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
(m) "Voting Stock" shall mean (i) the Common Shares and (ii) any
other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together
with the Common Shares in respect of any merger, consolidation, sale
of all or substantially all of the Company's assets, liquidation,
dissolution or winding up. Whenever any provision of this Agreement
requires a determination of whether a number of shares of Voting Stock
comprising a specified percentage of such Voting Stock has been voted,
tendered, acquired, sold or otherwise disposed of, or a determination
of whether a Person has offered or proposed to acquire a number of
shares of Voting Stock comprising such specified percentage, the
number of shares of Voting Stock comprising such specified percentage
of Voting Stock shall in every such case be deemed to be the number of
shares of Voting Stock comprising the specified percentage of the
Company's entire voting power then entitled to vote generally in the
election of directors or then entitled to vote together with the
Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or
winding up.
Section 2. Appointment of Rights Agent. The Company hereby
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appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier
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of (i) the Close of Business on the tenth day after the Shares Acquisition
Date or (ii) the Close of Business on the tenth Business Day (or such later
date as may be determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement of, or of the first public announcement of the intention of
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such
plan) to commence, a tender or exchange offer the consummation of which
would result in any Person becoming an Acquiring Person (including any such
date which is after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates (as hereinafter defined)) and not
by separate Right Certificates, and (y) the Rights will be transferable
only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (or the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares 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 (a "Right Certificate"),
evidencing one Right for each Common Share so held subject to adjustment as
provided for in Section 11 hereof. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Common
Shares, in substantially the form of Exhibit B hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect
to certificates for Common Shares outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the
earlier of the Redemption Date or Final Expiration Date), the surrender for
transfer of any certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in
the last sentence of this paragraph (c)) after the Record Date but prior
to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agreement
between Northwest Natural Gas Company and Boatmen's Trust
Company, dated as of February 27, 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 offices of Northwest Natural 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. Northwest
Natural Gas Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. As described in
the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person (as defined in the Rights
Agreement) shall become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires and cancels
any Common Shares after the Record Date but prior to the Distribution Date,
any Rights associated with such Common Shares shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. (a) The Right
--------------------------
Certificates (and the forms of election to purchase Common 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. Subject to the provisions
of Section 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of Common Shares as shall be set forth
therein at the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase Price shall
be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a),
Section 11(i) or Section 22 hereof that represents any Rights that were or
are beneficially owned by an Acquiring Person or any Associate or Affiliate
of such Acquiring Person and any Right Certificate issued pursuant to
Section 6 of 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:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was, became or has
announced an intention to become an Acquiring Person (as
such terms are defined in the Rights Agreement).
Accordingly, this Right Certificate and the Rights
represented hereby are or will become null and void as
provided in Section 11(a)(ii) of the Rights Agreement.
Section 5. Countersignature and Registration. The Right
---------------------------------
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its Chief Executive Officer, its President, or any Vice
President, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature. The Right Certificates shall be countersigned by
the Rights Agent, either manually or by facsimile signature, and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer
of the Company.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
-----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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Subject to the provisions of Section 14 hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to
purchase a like number of Common Shares as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at
the principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
---------------------------------------------------
of Rights. (a) The registered holder of any Right Certificate may
---------
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of the
Purchase Price for each Common Share as to which the Rights are exercised,
at or prior to the earliest of (i) the Close of Business on March 15,
2006 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or
(iii) the time at which such Rights are exchanged as provided in Section
24 hereof.
(b) The Purchase Price for each one-tenth of a Common Share
pursuant to the exercise of a Right shall initially be $10.00, 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 duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check, bank draft or money order payable to the order of
the Company, the Rights Agent shall (i) requisition from any transfer agent
of the Common Shares certificates for the number of Common Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, (ii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) 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, deliver such cash to or upon the order of the registered holder of
such Right Certificate.
(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.
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 Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Shares.
---------------------------------------------
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Common Shares or any
authorized and issued Common Shares held in its treasury, the number of
Common Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 of this Agreement.
The Company covenants and agrees that it will take all such
action as may be necessary so that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
The Company shall use every reasonable effort to obtain, as soon
as practicable following the Shares Acquisition Date (to the extent not
theretofore obtained), such regulatory approvals and take such other action
as may be necessary for it to issue and/or sell Common Shares purchasable
upon the exercise of the Rights.
Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable pursuant to Section 7 or pursuant to
the provisions contemplated by Section ll(a)(ii) hereof (a) unless and
until any regulatory approvals required for the issuance and/or sale of
Common Shares upon such exercise have been obtained, (b) in any
jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained or (c) if the exercise thereof, or the issuance and/or
sale of the Common Shares to be purchased upon such exercise, shall not be
permitted under the Company's Restated Articles of Incorporation, as
amended, or any applicable law or administrative or judicial regulation or
order.
The Company 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 Common Shares upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer of Right Certificates to a person other than, or
the issuance or delivery of certificates for the Common Shares in a name
other than that of, the registered holder of the Right Certificate
surrendered for transfer or exercise or to issue or to deliver any
certificates for Common Shares 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 reasonable satisfaction that no such tax is
due.
Section 10. Common Shares Record Date. Each person in whose
-------------------------
name any certificate for Common Shares is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record
of the Common Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date
-------- -------
of such surrender and payment is a date upon which the Common Shares
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
Shares transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number of Shares or
--------------------------------------------------
Number of Rights. The Purchase Price, the number of Common 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 Shares payable
in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine
the outstanding Common Shares into a smaller number of Common Shares or (D)
issue any shares of its capital stock in a reclassification of the Common
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the
Common Shares transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in
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no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event
any Person shall become an Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a price equal
to the then current Purchase Price multiplied by ten times the number of
tenths of a Common Share for which a Right is then exercisable, in
accordance with the terms of this Agreement, such number of Common Shares
of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by ten times the number of tenths of a Common
Share for which a Right is then exercisable and (y) dividing that product
by 50% of the then current per share market price of the Common Shares
(determined pursuant to Section 11(d)) on the date such Person became an
Acquiring Person. In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not take
any action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
From and after the time any Person becomes an Acquiring Person,
any Rights that are or were acquired or beneficially owned by such
Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be void and any holder of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof;
no Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee
of such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence shall be canceled.
The Company shall use all reasonable efforts to effect compliance with the
provisions of this subsection and Section 4(b) hereof, but shall have no
liability to any holder of Right Certificates or other Person as a result
of its failure to make any determination with respect to an Acquiring
Person or any of its Affiliates, Associates or transferees hereunder.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon exercise
of the Rights.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Shares
entitling them to subscribe for or purchase Common Shares or securities
convertible into Common Shares at a price per Common Share (or having a
conversion price per share, if a security convertible into Common Shares)
less than the then current per share market price of the Common Shares (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional Common Shares
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
-------- -------
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent. Common Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) 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, the numerator of which shall be the then current per share market
price of the Common Shares on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Common Share and the denominator of which shall be such current per share
market price of the Common Shares; provided, however, that in no event
-------- -------
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
per share market price" of any Common Shares on any date shall be deemed to
be the average of the daily closing prices per share of such Common Shares
for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the
-------- -------
event that the current per share market price of any Common Shares is
determined during a period following the announcement by the issuer of such
Common Shares of (i) a dividend or distribution on such Common Shares
payable in Common Shares or securities convertible into Common Shares, or
(ii) any subdivision, combination or reclassification of such Common Shares
and prior to the expiration of 30 Trading Days after the ex- dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to 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 Common Shares 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 Common Shares are
listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Common Shares selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market
in the Common Shares, the fair value of the Common Shares on such date as
determined in good faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national
securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by
-------- -------
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest tenthousandth of a share as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from
the date of the transaction which requires such adjustment or (ii) the date
of the expiration of the right to exercise any Right.
(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Common
Shares, the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Common Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the Common
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Common
Shares 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 Sections 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 Common Shares (calculated to the nearest ten-thousandth of a
Common Share) obtained by (i) multiplying (x) the number of Common 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 Common Shares 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 Common Shares for
which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-
thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make
a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Common Shares issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of Common 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 par value, if any, of the Common
Shares issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Shares 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 Common Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the Common
Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
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to such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of the Common
Shares, any issuance wholly for cash of any Common Shares at less than the
current market price, any issuance wholly for cash of Common Shares or
securities which by their terms are convertible into or exchangeable for
Common Shares, any dividends on Common Shares payable in Common Shares or
any issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Common
Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Shares payable in Common Shares or (ii)
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case (x) the number of Common Shares purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number
of Common Shares so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the number of
Common Shares outstanding immediately after such event, and (y) each Common
Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
---------------------------------------------------
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
------
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent is entitled to rely on any such certificate in
the performance of its duties hereunder and shall be indemnified in the
manner set forth herein for acting upon such reliance.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
---------------------------------------------------
or Earning Power. In the event, directly or indirectly, (a) the Company
shall consolidate with, or merge with and into, any other Person, (b) any
Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving corporation
of such merger and, in connection with such merger, all or part of the
Common Shares shall be changed into or exchanged for stock or other
securities of any Person (including the Company) or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person other than the Company or one or more of its
wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price
multiplied by ten times the number of tenths of a Common Share for which
a Right is then exercisable, in accordance with the terms of this
Agreement, such number of Common Shares of such other Person (including
the Company as successor thereto or as the surviving corporation) as
shall be equal to the result obtained by (x) multiplying the then current
Purchase Price by ten times the number of tenths of a Common Share for
which a Right is then exercisable and (y) dividing that product by 50% of
the then current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d)) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) the issuer of such
Common Shares shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such issuer
shall take such steps (including, but not limited to, the reservation of
a sufficient number of its Common Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior
thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement so providing. The Company shall
not enter into any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction, would eliminate
or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The
---------------------------------------
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the counter market, as reported by NASDAQ or such
other system then in use, or if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Common Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Common Shares. In lieu of fractional Common
Shares, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one Common Share. For purposes of this Section 14(b), the current market
value of a Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section ll(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect
----------------
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
may, in 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 under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
--------------------------
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
-------------------------------------------------
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Common
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except
as provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. 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 gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of
this Agreement.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
---------------------------------------------------
Agent. Any corporation into which the Rights Agent or any successor Rights
-----
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust 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 Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
----------------------
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(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 Chief Executive Officer, the President, any
Vice President, the Treasurer or the Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 11(a)(ii) hereof) or any adjustment in the terms of the Right
(including the manner, method or amount thereof) provided for in Sections
3, 11, 13, 23 or 24 hereof, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Common Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
----------------------
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares
by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the 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
authorized to exercise corporate trust or stock transfer powers and subject
to supervision or examination by federal or state authority. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares, and mail a notice thereof 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 Common
Shares following the Distribution Date, no Rights shall attach thereto
except as follows: the Company (a) shall, with respect to Common Shares so
issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded prior to or on the
Distribution Date, 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, 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. (a) The Rights may be redeemed by
----------
action of the Board of Directors pursuant to subsection (b) of this Section
23 and shall not be redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option, at
any time prior to such time as any Person becomes an Acquiring Person,
redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by the Board of
Directors may be made effective at such time on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to subsection (b) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price. The
Company shall promptly give public notice of any such redemption; provided,
--------
however, that the failure to give, or any defect in, any such notice shall
-------
not affect the validity of such redemption. Within 10 days after such
action of the Board of Directors ordering the redemption of the Rights
pursuant to subsection (b) of this Section 23, the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
--------
Company may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares
at an exchange ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(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 Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
-------- -------
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Each such notice of exchange will state the method by
which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the Company shall
pay to the registered holders of the Right Certificates, with regard to
which such fractional Common Shares would otherwise be issuable, an amount
in cash equal to the same fraction of the current market value of a whole
Common Share. For the purposes of this subsection (d), the current market
value of a whole Common Share shall be the closing price of a Common Share
(as determined pursuant to the second sentence of Section ll(d) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events. (a) In case the Company
------------------------
shall propose (i) to pay any dividend payable in stock of any class to the
holders of Common Shares or to make any other distribution to the holders
of Common Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of Common Shares rights or warrants to subscribe for
or to purchase any additional Common Shares or shares of stock of any class
or any other securities, rights or options, (iii) to effect any
reclassification of Common Shares (other than a reclassification involving
only the subdivision of outstanding Common Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person other than the Company or one or more of its
wholly-owned Subsidiaries, (v) to effect the liquidation, dissolution or
winding up of the Company or (vi) to declare or pay any dividend on the
Common Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares), then, in each
such case, the Company shall give to each holder of a Right Certificate, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common Shares if any
such date is to be fixed, and such notice shall be so given, in the case of
any action covered by clause (i) or (ii) above, at least 10 days prior to
the record date for determining holders of Common Shares for purposes of
such action, and in the case of any such other action, at least 10 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares, whichever shall
be the earlier.
(b) In case the event set forth in Section 11(a)(ii) of this
Agreement shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, a notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii).
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:
Northwest Natural Gas Company
One Pacific Square
220 N.W. Second Avenue
Portland, Oregon 97209
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Boatmen's Trust Company
510 Locust Street
St. Louis, Missouri 63101
Attention: Corporate Trust Group
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of the Common Shares or 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. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
Section 27. Supplements and Amendments. The Company may from
--------------------------
time to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the
Company may deem necessary or desirable, any such supplement or amendment
to be evidenced by a writing signed by the Company and the Rights Agent;
provided, however, that from and after such time as any Person becomes an
-------- -------
Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights.
Section 28. Successors. All the covenants and provisions of
----------
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
--------------------------
Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
Section 31. Governing Law. This Agreement and each Right
-------------
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Oregon and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
--------------------
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the day and year first above
written.
Attest: NORTHWEST NATURAL GAS COMPANY
By: /s/ C. J. Rue By: /s/ Bruce B. Samson
-------------------------- ----------------------------
Title: Secretary Title: Senior Vice President
and General Counsel
Attest: BOATMEN'S TRUST COMPANY
By: /s/ Joy Marie Lincoln By: /s/ Jerry L. Rector
-------------------------- ----------------------------
Title: Assistant Secretary Title: Vice President and
Assistant Secretary
<PAGE>
EXHIBIT A
Form of Right Certificate
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER MARCH 15, 2006 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
RIGHT CERTIFICATE
NORTHWEST NATURAL GAS COMPANY
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 February 27, 1996 (the "Rights
Agreement"), between Northwest Natural Gas Company, an Oregon corporation
(the "Company"), and Boatmen's Trust Company (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., Pacific
Time, on March 15, 2006 at the principal office of the Rights Agent, or at
the office of its successor as Rights Agent, one-tenth of a share of common
stock, par value $3-1/6 per share, of the Company ("Common Shares"), at a
purchase price of $10.00 (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate
(and the number of Common Shares which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of March 15, 1996, based on the Common Shares
as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of Common Shares which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned offices
of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like
aggregate number of Common Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in
part for Common Shares.
No fractional Common Shares will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________________ 19_ .
Attest: NORTHWEST NATURAL GAS COMPANY
_____________________________ By:____________________________
Countersigned:
BOATMEN'S TRUST COMPANY
By:__________________________
Authorized Signature
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________________ hereby
sells, assigns and transfers unto _______________________
________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________
this Right Certificate together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: _________________, 19__
___________________________________
Signature
Signature Guaranteed:
The signature(s) should be guaranteed by a brokerage firm or a
financial institution that is a member of an approved medallion program,
such as Securities Transfer Agents Medallion Program (STAMP), Stock
Exchange Medallion Program (SEMP) or New York Stock Exchange, Inc.
Medallion Signature Program (MSP).
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The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement).
___________________________________
Signature
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<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To: NORTHWEST NATURAL GAS COMPANY
The undersigned hereby irrevocably elects to exercise
________________________________ Rights represented by this Right
Certificate to purchase the Common Shares issuable upon the exercise of
such Rights and requests that certificates for such Common Shares be issued
in the name of:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Dated: _________________, 19__
___________________________________
Signature
Signature Guaranteed:
The signature(s) should be guaranteed by a brokerage firm or a
financial institution that is a member of an approved medallion program,
such as Securities Transfer Agents Medallion Program (STAMP), Stock
Exchange Medallion Program (SEMP) or New York Stock Exchange, Inc.
Medallion Signature Program (MSP).
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<PAGE>
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement).
___________________________________
Signature
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NOTICE
------
The signature in the foregoing Forms of Assignment and Election
must conform to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and such Assignment or Election to Purchase will not be honored.
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS TO
PURCHASE COMMON SHARES
On February 22, 1996, the Board of Directors of Northwest Natural
Gas Company (the "Company") declared a dividend of one common share
purchase right (a "Right") for each outstanding share of common stock, par
value $3-1/6 per share, of the Company (the "Common Shares"). The dividend
is payable to the shareholders of record as of the close of business on
March 15, 1996 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company at any time following the Distribution
Date (as defined below) one-tenth of a Common Share at an initial purchase
price of $10.00, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in the Rights Agreement
dated as of February 27, 1996 (the "Rights Agreement"), by and between the
Company and Boatmen's Trust Company as rights agent.
Initially, the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate. The Rights will separate from the Common Shares
upon the Distribution Date which shall be the earlier to occur of (i) the
close of business on the tenth day following a public announcement that a
person or group of affiliated or associated persons (collectively, a
"Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Shares (such Person being hereinafter referred to as an
"Acquiring Person") or (ii) the close of business on the tenth business day
(or such later date as may be determined by action of the Board of
Directors of the Company prior to such time as any Person becomes an
Acquiring Person) following the commencement of, or the first public
announcement of an intention of any Person to commence, a tender offer or
exchange offer the consummation of which would result in such Person
becoming an Acquiring Person, provided that such Person is not the Company
or any subsidiary of the Company, any employee benefit plan of the Company
or of any subsidiary of the Company or any entity holding Common Shares for
or pursuant to the terms of any such plan.
Until the Distribution Date, (i) the Rights will be evidenced by
the certificates for Common Shares and will be transferred with and only
with such Common Share certificates, (ii) new certificates for Common
Shares issued after the Record Date will contain a notation incorporating
the Rights Agreement by reference, and (iii) the surrender for transfer of
any such certificate for Common Shares outstanding on the Record Date, with
or without a copy of the Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common
Shares represented thereby. As soon as practical following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. Subject to certain
exceptions, only Common Shares issued prior to the Distribution Date will
be issued with Rights.
The Rights are not exercisable until the Distribution Date and
will expire on the earlier of (i) the close of business on March 15, 2006,
(ii) the time at which the Rights are redeemed by the Company or (iii) if a
Person has become an Acquiring Person, the time at which the Rights (other
than Rights which are void as described below) are exchanged for Common
Shares at an exchange ratio of one Common Share per Right, as adjusted by
the Company (provided, however, such exchange may not take effect at any
time after any Person becomes a beneficial owner of 50% or more of the
Common Shares then outstanding).
The Purchase Price payable and the number of Common Shares
issuable upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution in the event of (i) a stock dividend on, or a
subdivision, combination or reclassification of, the Common Shares, (ii)
the issuance of rights, options or warrants to subscribe for or purchase
Common Shares at a price, or securities convertible into Common Shares at a
conversion price, less than the then current market price for the Common
Shares, or (iii) a distribution to all holders of the Common Shares of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends or dividends payable in Common Shares) or subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required unless such adjustment would require an increase or decrease of
at least 1% in the Purchase Price. No fractional Rights will be issued
and, in lieu thereof, holders of the Rights with regard to which such
fractional Rights would otherwise be issuable will be paid an amount in
cash equal to the same fraction of the current market value of a whole
Right.
In the event, directly or indirectly, (i) the Company
consolidates with, or merges with and into, any other person, (ii) any
person consolidates with the Company, or merges with and into the Company
and the Company is the continuing or surviving corporation of such merger
and, in connection therewith, all or part of the Common Shares is changed
into or exchanged for stock or other securities of any person (including
the Company) or cash or any other property, or (iii) the Company sells or
otherwise transfers in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and
its subsidiaries, taken as a whole, to any other person, proper provision
will be made so that each holder of a Right, except Rights which previously
have been voided as indicated below, will thereafter have the right to
receive, upon exercise thereof for a purchase price equal to ten times the
current Purchase Price of the Right, that number of shares of common stock
of the other person which at the time of such transaction will have a
market value equal to twenty times the Purchase Price of the Right.
In the event that any Person becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive, upon exercise, for a purchase
price equal to ten times the Purchase Price of the Right, that number of
Common Shares having a market value equal to twenty times the Purchase
Price of the Right.
Any Rights acquired or beneficially owned by any Acquiring Person
or certain related parties thereto will be void, and any holder of such
Rights will thereafter have no right to exercise such Rights under any
provision of the Rights Agreement.
At any time prior to such time that a Person becomes an Acquiring
Person, the Board of Directors of the Company may redeem the then
outstanding Rights in whole, but not in part, at a price of $.01 per Right,
subject to adjustment (the "Redemption Price"). The redemption of the
rights may be made effective at such time on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of the Rights will
be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights. After the
Distribution Date, no such amendment may adversely affect the interests of
the holders of the Rights.
Issuance of the Common Shares upon exercise of the Rights will be
subject to any necessary regulatory approvals. Until a Right shall be
exercised, the holder thereof, as such, will have no right as a shareholder
of the Company, including without limitation, the right to vote or to
receive dividends.
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 February 27, 1996. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
