OMB APPROVAL
OMB Number: 3235-0056
Expires: July 31, 1995
Estimated average burden
hours per response . . . . 8
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
NORTHWESTERN PUBLIC SERVICE COMPANY
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 46-0172280
- -------------------------------------------------------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
33 Third Street S.E., Huron, South Dakota 57350
- -------------------------------------------------------------------------------
(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
Common Stock Purchase Rights New York Stock Exchange
- --------------------------------- -------------------------------
- --------------------------------- -------------------------------
- --------------------------------- -------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
- -------------------------------------------------------------------------------
(Title of class)
- -------------------------------------------------------------------------------
(Title of class)
<PAGE>
ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On December 9, 1996, the Board of Directors of Northwestern Public
Service Company (the "Company") declared a dividend distribution of one
Right for each outstanding share of common stock, $3.50 par value (the
"Common Stock"), of the Company to shareholders of record at the close of
business on December 19, 1996 (the "Record Date"). The Company thereupon
entered into a Rights Agreement (dated as of December 11, 1996) with
Norwest Bank Minnesota, N.A. as Rights Agent. Except as set forth below,
each Right, when exercisable, entitles the registered holder to purchase
from the Company one share of Common Stock at a price of $100 per share
(the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in the Rights Agreement (the "Rights
Agreement") between the Company and Norwest Bank Minnesota, N.A. as
Rights Agent.
Until the earlier to occur of (i) ten days following a public
announcement that, without the prior consent of the Company, a person or
group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of
securities having 15% or more of the voting power of all outstanding
voting securities of the Company (the date of said public announcement
being the "Stock Acquisition Date") or (ii) ten days following the
commencement of (or a public announcement of an intention to make) a
tender offer or exchange offer which would result in any person or group
and related persons becoming an Acquiring Person, without the prior
consent of the Company (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any
of the Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificate together with a summary of the terms of the
Rights (the "Summary of Rights"). The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred with and only
with Common Stock certificates. From as soon as practicable after the
Record Date and until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuance of the Common Stock will
contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for Common Stock
outstanding (with or without the Summary of Rights attached) will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (the
"Rights Certificates") will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date, and the
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on December 10, 2006 unless earlier redeemed by the Company
as described below.
The Purchase Price payable, and the number of shares of the Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the Common Stock, (ii) upon the grant to holders of
the Common Stock of certain rights or warrants to subscribe for Common
Stock, certain convertible securities or securities having the same or
more favorable rights, privileges and preferences as the Common Stock at
less than the current market price of the Common Stock or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends at a rate not in
excess of 125% of the rate of the last cash dividend therefore paid and
dividends payable in Common Stock) or of subscription rights or warrants
(other than those referred to above).
In the event that after a Stock Acquisition Date, (i) the Company
consolidates with, or merges into, another entity, (ii) any other entity
consolidates with, or merges into the Company (other than, in the case of
either transaction described in (i) and (ii), certain reorganization
transactions), or (iii) the Company sells, mortgages or otherwise
transfers 50% or more of its assets or earning power (in one transaction
or a series of transactions), proper provision shall be made so that each
holder of a Right shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company or, in certain
cases, its affiliated company (or, in the event there is more than one
acquiring company, the acquiring company receiving the greatest portion
of the assets or earning power transferred) which at the time of such
transaction would have a market value of two times the exercise price of
the Right (such right being called the "Flip-Over Right").
In the event that a person becomes the beneficial owner of securities
having a 15% or more of the voting power of all then outstanding voting
securities of the Company (unless pursuant to a tender or exchange offer
for all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the members of the Board of
Directors who are not officers of the Company to be adequate and
otherwise in the best interests of the Company and its constituents,
including shareholders), proper provision shall be made so that each
holder of a Right will have the right to receive upon exercise that
number of shares (or fractional shares) of Common Stock (or shares, or
units of shares of preferred stock or other equity securities of the
Company having at least the same value and voting rights as the Common
Stock) having a market value of two times the exercise price of the
Right, subject to the availability of a sufficient number of authorized
but unissued shares (such right being called the "Flip-In Right"). The
holder of a Right will continue to have the Flip-Over Right whether or
not such holder exercises the Flip-In Right.
Upon the occurrence of the event giving rise to the exercisability of the
Flip-In Right, any Rights that are or were at any time owned by an
Acquiring Person on or after the time the Acquiring Person becomes such
shall become void.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractions of shares will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market
price of the Common Stock on the last trading date prior to the date of
the exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may
redeem the rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"), which redemption shall be effective upon the
action of the Board of Directors. Additionally, the Company may
thereafter redeem the then outstanding Rights in whole, but not in part,
at the Redemption Price provided that such redemption is incidental to a
merger, or other business combination transaction or series of
transactions involving the Company but not involving an Acquiring Person
or any person who was an Acquiring Person or, following an event giving
rise to the Flip-In Right, if and for as long as an Acquiring Person
beneficially owns securities representing less than 15% of the voting
power of the Company's voting securities. The redemption of Rights
described in the preceding sentence shall be effective only after 20 days
prior notice. Upon the effective date of the redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
One Right will be distributed to shareholders of the Company for each
share of Common Stock owned of record by them as of the close of business
on December 19, 1996. Until the Distribution Date, the Company will
issue one Right with each share of Common Stock that shall become
outstanding so that all shares of Common Stock will have attached Rights.
As of December 12, 1996, there were 8,920,122 shares of Common Stock
issued.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved in advance by the Board of Directors of the
Company. The Rights should not interfere with any merger of other
business combination approved by the Board of Directors prior to the time
that a person or group has acquired beneficial ownership of 15% or more
of the Common Stock, since until such time the Rights may be redeemed by
the Company at $.01 per Right.
The present dividend distribution of the Rights is not taxable to the
Company or its shareholders. The Rights are not dilutive and will not
affect reported earnings per share. The Company will receive no proceeds
from the issuance of the Rights as a dividend.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights, including the form of Rights Certificate and the
Summary of Rights is attached hereto as an exhibit and incorporated
herein by reference. A copy of the Rights Agreement is available free of
charge from the Company. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference
to the Rights Agreement.
ITEM 2. EXHIBITS.
I. Rights Agreement dated as of December 11, 1996 between NORTHWESTERN
PUBLIC SERVICE COMPANY and Norwest Bank Minnesota, N.A. as Rights
Agent.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
(Registrant) Northwestern Public Service Company
Date DECEMBER 13, 1996
By: /s/ Alan D. Dietrich
--------------------
Alan D. Dietrich
Vice President-Administration
& Corporate Secretary
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
- ------- ----
Rights Agreement dated as of December 11, 1996
between NORTHWESTERN PUBLIC SERVICE COMPANY
and Norwest Bank Minnesota, N.A., as Rights Agent . . . . . .
- -------------------------------------------------------------------------------
NORTHWESTERN PUBLIC SERVICE COMPANY
and
NORWEST BANK MINNESOTA, N.A.
Rights Agent
- -------------------------------------------------------------------------------
Rights Agreement
Dated as of December 11, 1996
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . 4
3. Issue of Rights Certificates. . . . . . . . . . . . . . . . . . 4
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . 6
5. Countersignature and Registration . . . . . . . . . . . . . . . 6
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . . . . . . . 7
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . 8
8. Cancellation and Destruction of Rights Certificates . . . . . .10
9. Reservation and Availability of Common Stock. . . . . . . . . .10
10. Common Stock Record Date. . . . . . . . . . . . . . . . . . . .12
11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. . . . . . . . . . . . . . . . . . . .12
12. Certificate of Adjusted Purchase Price or Number of Shares. . .19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. . . . . . . . . . . . . . . . . . . . . . . . . . .20
14. Additional Covenants. . . . . . . . . . . . . . . . . . . . . .22
15. Fractional Rights and Fractional Shares . . . . . . . . . . . .22
16. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . .23
17. Agreement of Rights Holders . . . . . . . . . . . . . . . . . .24
18. Rights Certificate Holder Not Deemed a Stockholder. . . . . . .24
19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . .25
20. Merger or Consolidation or Change of Name of Rights Agent . . .25
21. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . .26
22. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . .28
23. Issuance of New Rights Certificates . . . . . . . . . . . . . .29
24. Redemption and Termination. . . . . . . . . . . . . . . . . . .29
25. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
26. Notice of Certain Events. . . . . . . . . . . . . . . . . . . .32
27. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
28. Supplements and Amendments. . . . . . . . . . . . . . . . . . .33
29. Determination and Actions by the Board of Directors, etc. . . .34
30. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . .34
31. Benefits of this Agreement. . . . . . . . . . . . . . . . . . .34
32. Severability. . . . . . . . . . . . . . . . . . . . . . . . . .34
33. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .35
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
34. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .35
35. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . .35
Exhibit A Form of Rights Certificate A-1
Exhibit B Form of Summary of Rights B-1
<PAGE>
RIGHTS AGREEMENT
Rights Agreement (the "Rights Agreement" or "Agreement"),
dated as of December 11, 1996, between Northwestern Public Service
Company, a Delaware corporation (the "Company"), and Norwest Bank
Minnesota, N.A. (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on December 9, 1996, the Board of Directors of the
Company authorized and declared a dividend distribution of one Right
(as hereinafter defined) for each share of Common Stock, $3.50 par
value per share, of the Company (the "Common Stock") outstanding as of
the close of business on December 19, 1996 (the "Record Date"), and
further authorized and directed issuance of one Right (subject to
adjustment as provided herein) for each share of Common Stock of the
Company issued between the Record Date and the earliest of the
Distribution Date or the Expiration Date (as such terms are
hereinafter defined), each Right representing the right to purchase
one share of Common Stock of the Company (the "Rights") upon the terms
and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, without the prior approval of the
Company, shall be the Beneficial Owner (as such term is hereinafter
defined) of securities representing 15% or more of the Voting Power
(as such term is hereinafter defined) or who was such a Beneficial
Owner at any time after the date hereof, whether or not such Person
continues to be the Beneficial Owner of securities representing 15% or
more of the Voting Power. Notwithstanding the foregoing, (A) the term
"Acquiring Person" shall not include (i) the Company, (ii) any
subsidiary (as such term is hereinafter defined) of the Company, (iii)
any employee benefit plan of the Company or any of its subsidiaries,
or (iv) any Person holding securities of the Company organized,
appointed or established by the Company or any of its subsidiaries for
or pursuant to the terms of any such employee benefit plan; and (B) no
Person shall become an "Acquiring Person" (i) as a result of the
acquisition of shares of Common Stock by the Company which, by
reducing the number of shares of Common Stock outstanding, increases
the proportional number of shares beneficially owned by such Person
together with all Affiliates and Associates of such Person, provided,
that if (1) a Person would become an Acquiring Person (but for the
operation of this subclause (i)) as a result of the acquisition of
shares of Common Stock by the Company, and (2) after such share
acquisition by the Company, such Person, or an Affiliate or Associate
of such Person, becomes the Beneficial Owner of any additional shares
of Common Stock, then such Person shall be deemed an Acquiring Person;
or (ii) if (1) within five Business Days after such Person would
otherwise have become an Acquiring Person (but for the operation of
this subclause (ii)), such Person notifies the Board of Directors that
such Person did so inadvertently, and (2) within two Business Days
after such notification, such Person divests itself of a sufficient
number of shares of Common Stock so that such Person is the Beneficial
Owner of such number of shares of Common Stock so that such Person no
longer would 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 hereof.
(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 (A) the right or obligation to acquire
(whether such right or obligation is exercisable or effective
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," 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 (sole or shared)
to vote or dispose of pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange
Act, and (2) is not also then reportable by such Person 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 (or any Affiliate or Associate
thereof) with which such Person or any such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in clause (B) of
subparagraph (ii) of this paragraph (c)) 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, Sunday, or a day on which banking institutions in the State
of South Dakota 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., Central time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., Central time, on the
next succeeding Business Day.
(f) "Common Stock" shall mean the Common Stock, $3.50 par
value, of the Company, except that "Common Stock" when used with
reference to stock issued by any Person other than the Company shall
mean the capital stock with the greatest Voting Power, or the equity
securities or other equity interest having power to control or direct
the management of such Person or, if such Person is a subsidiary of
another Person, of the Person which ultimately controls such
first-mentioned Person and which has issued and outstanding such
capital stock, equity securities or equity interests.
(g) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(h) "Expiration Date" and "Final Expiration Date" shall
have the meaning set forth in Section 7(a) hereof.
(i) "Person" shall mean any individual, firm, corporation,
partnership, trust, association, joint venture, syndicate or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
(j) "Stock Acquisition Date" shall mean the first date of
public announcement (which shall include, without limitation, a report
filed pursuant to the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(k) A "subsidiary" of any Person shall mean any corporation
or other Person of which a majority of the Voting Power (as
hereinafter defined) of the voting equity securities or voting
interests is owned, directly or indirectly, by such Person, or which
is otherwise controlled by such Person.
(l) "Voting Power" shall mean the voting power of all
securities of the Company then outstanding generally entitled to vote
for the election of directors of the Company.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be the
holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable. In the event the
Company appoints one or more Co- Rights Agents, the respective duties
of the Rights Agents and any Co-Rights Agents shall be as the Company
shall determine.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) the tenth day after the date of the
commencement of, or first public announcement of, the intent of any
Person (other than the Company, any of its subsidiaries, or any
employee benefit plan of the Company or any of its subsidiaries) to
commence (which intention to commence remains in effect for five
business days after such announcement) a tender or exchange offer
which would result in such 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 paragraph (b) of this Section
3) by the certificates for Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock shall
be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights (and the right to receive
certificates therefor) will be transferable only in connection with
the transfer of the underlying shares of Common Stock. As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of
the Common Stock as of the close of business on the Distribution Date,
at the address of such holder shown on the records of the Company, a
certificate for Rights, in substantially the form of Exhibit A hereto
(the "Rights Certificates"), evidencing one Right of each share of
Common Stock so held. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As soon as practicable following the Record Date the
Company will send a copy of the Summary of Rights, in substantially
the form attached hereto as Exhibit B (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Record Date, at the address
of such holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock together with the Summary of Rights,
and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the surrender for transfer
of any of the certificates for the Common Stock outstanding on the
Record Date, even without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
(c) Certificates issued for Common Stock (including,
without limitation, certificates issued upon transfer or exchange of
Common Stock) after the Record Date, but prior to the earlier of the
Distribution Date or the Expiration Date, shall be deemed also to be
certificates for Rights, and shall have impressed, printed, stamped,
written or otherwise affixed onto them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a Rights
Agreement between Northwestern Public Service Company and
Norwest Bank Minnesota, N.A. (the "Rights Agent") dated as
of December 11, 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 Northwestern
Public Service Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed,
may expire, or may be evidenced by separate certificates and
will no longer be evidenced by this certificate.
Northwestern Public Service Company will mail to the holder
of this certificate a copy of the Rights Agreement without
charge within five days after receipt of a written request
therefor. Under certain circumstances, Rights issued to, or
held by, Acquiring Persons or Associates or Affiliates of an
Acquiring Person (as defined in the Rights Agreement) and
any subsequent holder of such Rights may become null and
void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in 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 11 and Section 23 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the date of
this Agreement, and on their face shall entitle the holders thereof to
purchase such number of shares of Common Stock as shall be set forth
therein at the price per share set forth therein (the "Purchase
Price"), but the number of such shares and the Purchase Price shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 23 hereof that represents Rights beneficially owned by an
Acquiring Person or any Associate or Affiliate thereof and any Rights
Certificate issued at any time upon the transfer of any Rights to such
an Acquiring Person or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate, and any
Rights Certificate issued pursuant to Section 6 or Section 11 upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the following
legend:
The Rights represented by this Rights Certificate were
issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement, dated as of
December 11, 1996). This Rights Certificate and the Rights
represented hereby may become void to the extent provided
by, and under certain circumstances as specified in, Section
7(e) of the Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any such
Rights Certificate.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, President or Executive Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates
shall be countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights
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 Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificates
may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement any
such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at one of its offices designated for such
purpose, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights
Certificates, the certificate number and the date of each of the
Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 15 hereof, at any
time after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any Rights
Certificate(s) may be transferred, split up, combined or exchanged for
other Rights Certificate(s), entitling the registered holder to
purchase a like number of shares of Common Stock as the Rights
Certificate(s) surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange
any Rights Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Rights Certificate(s) to be
transferred, split up, combined or exchanged, with the form of
assignment and certificate appropriately executed, at the office of
the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment from such Rights
Certificate holders 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 Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and 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 Rights
Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) The registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein and subject to prior compliance by the Company with the
provisions of Section 9(e) hereof) in whole or in part at any time
after the Distribution Date upon presentation of the Rights
Certificate, with the appropriate form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the office
of the Rights Agent designated for such purpose together with payment
of the Purchase Price for each share of Common Stock (or such other
number of shares or other securities) as to which the Rights are
exercised, at or prior to the earlier of (i) the close of business on
December 10, 2006 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 24 hereof (such
earlier time being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $100.00, shall
be subject to adjustment from time to time as provided in Sections 11
and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate form of election to purchase
duly executed, accompanied by payment of the Purchase Price for the
shares (or other securities or property) to be purchased and an amount
equal to any applicable transfer tax (as determined by the Rights
Agent) in cash, or by certified check or money order payable to the
order of the Company, the Rights Agent shall, subject to Section
21(k), thereupon promptly (i) (A) requisition from any transfer agent
of the shares of Common Stock (or make available, if the Rights Agent
is the transfer agent) certificates for the number of shares of Common
Stock to be purchased, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the
Company, in its sole discretion, shall have elected to deposit the
shares of Common Stock issuable upon exercise of the Rights hereunder
into a depositary, requisition from the depositary agent depositary
receipts representing such number of shares of Common Stock as are to
be purchased (in which case certificates for the shares of Common
Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash, if any, to be paid in
lieu of issuance of fractional shares in accordance with Section 15,
(iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name
or names as may be designated by such holder, and (iv) when
appropriate, after receipt promptly deliver such cash to or upon the
order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue other securities of the
Company and/or distribute other property pursuant to Section 11(a),
the Company will make all arrangements necessary so that such other
securities and/or property are available for distribution by the
Rights Agent, if and when appropriate. In addition, in the case of an
exercise of the Rights by a holder pursuant to Section 11(a)(ii), the
Rights Agent shall return such Rights Certificate to the registered
holder thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Rights Certificate no
longer include the rights provided by Section 11(a)(ii) of the Rights
Agreement and if less than all the Rights represented by such Rights
Certificate were so exercised, the Rights Agent shall indicate on the
Rights Certificate the number of Rights represented thereby which
continue to include the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Rights Certificate
shall exercise (except pursuant to Section 11(a)(ii)) less than all
the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such
Rights Certificate or to its duly authorized assigns, subject to the
provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of an event described in
Section 11(a)(ii), any Rights beneficially owned by an Acquiring
Person or an Associate or Affiliate of an 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 Rights
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 Rights 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 Rights Certificate delivered to the Rights Agent
for transfer to an Acquiring Person (or Associate or Affiliate
thereof) whose Rights would be void pursuant to the preceding sentence
shall be canceled.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless the certificate contained in the appropriate form of election
to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise shall have been properly completed and
duly executed by the registered holder thereof and the Company shall
have been provided with such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall reasonably
request.
Section 8. Cancellation and Delivery of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to
the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Rights Certificates shall be
issued in lieu thereof except as expressly permitted by any of the
provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent
shall so cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall, from time to time, deliver cancelled Rights
Certificates to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that after the
occurrence of an event specified in Section 11 it shall reserve and
keep available a sufficient number of shares of Common Stock (and/or
other securities) which may be required to permit the exercise in full
of the Rights pursuant to this Agreement.
(b) So long as the shares of Common Stock (and, after the
occurrence of an event specified in Section 11, any other securities)
issuable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares
of Common Stock (or other securities) reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such
exercise.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common
Stock and/or other securities delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares or other
securities (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares
or securities.
(d) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates or of any certificates for shares
of Common Stock (or other assets, cash or other securities, as the
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person
other than, or in respect of the issuance or delivery of the shares of
Common Stock and/or other securities in a name other than that of, the
registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for
shares of Common Stock, and/or other securities in a name other than
that of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax
is due.
(e) The Company shall use its best efforts to (i) file, as
soon as practicable following the Distribution Date, a registration
statement under the Securities Act of 1933, as amended (the "Act"),
with respect to the securities purchasable upon exercise of the Rights
on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii)
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act and the
rules and regulations thereunder) until the date of the expiration of
the Rights provided by Section 11(a)(ii). The Company will also take
such action as may be appropriate under the blue sky laws of the
various states. The Company shall use its best efforts, as soon as
practicable following the earliest date after the first occurrence of
an event described in Section 11(a)(ii) on which consideration to be
delivered by the Company upon exercise of the Rights has been
determined pursuant to this Agreement, to obtain such regulatory
approvals as may be necessary for it to issue securities purchasable
upon exercise of the Rights, and if, within 90 days after the
exercise of any Right, the Company has been unable to obtain any
required regulatory approval for the issuance of the Common Stock to
be delivered in connection with the exercise of that Right (or if the
Company is otherwise unable to issue the shares of Common Stock under
its charter or for any other reason), the Company shall substitute for
the shares of Common Stock otherwise issuable upon exercise of the
Right (1) cash, (2) a reduction in the Purchase Price, (3) other
equity securities of the Company (including without limitation shares
or units of shares of preferred stock or other securities, except to
the extent that the Company has not obtained any necessary regulatory
approval for such issuance, (4) debt securities of the Company, except
to the extent that the Company has not obtained any necessary
regulatory approval for such issuance, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the
"current per share market price" (as determined pursuant to
Section 11(d)(ii) hereof) of the Common Stock for which such Right is
otherwise exercisable, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of
Directors of the Company.
Section 10. Common Stock Record Date. Each Person in whose
name any certificate for shares of Common Stock (or other securities)
is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of the shares of Common Stock (or
other securities) represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing such
Rights was duly presented and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the
date of such presentation and payment is a date upon which the Common
Stock (or other securities) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Stock (or other securities) transfer
books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall
not be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends
or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number of shares
covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Rights Agreement, (A) declare a dividend on the
Common Stock payable in shares of Common Stock, (B) subdivide the
outstanding Common Stock, (C) combine the outstanding Common Stock
into a smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and in Section 7(e), 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 and
other securities which, if such Right had been exercised immediately
prior to such date and at a time when the Common Stock transfer books
of the Company were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that any Person, alone or together
with its Affiliates and Associates, shall become an Acquiring Person
(except pursuant to a tender or exchange offer for all outstanding
shares of Common Stock at a price and on terms determined by at least
a majority of the members of the Board of Directors who are not
officers of the Company to be both adequate and otherwise in the best
interests of the Company and its constituents, including shareholders
(other than the Person or an Affiliate or Associate thereof on whose
behalf the offer is being made)), then proper provision shall be made
so that each holder of a Right, except as provided in Section 7(e)
hereof, shall have a right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of shares of Common Stock for which
a Right is then exercisable and dividing that product by (y) 50% of
the current market price per one share of Common Stock (determined
pursuant to Section 11(d)) on the date of the occurrence of the event
set forth above in this subparagraph (ii) (such number of shares being
referred to as the "number of Adjustment Shares"); provided, however,
that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) or, if any regulatory approvals for the
issuance of such Common Stock has not been obtained by the Company,
and the Rights become so exercisable, notwithstanding any other
provision of this Agreement, to the extent necessary and permitted by
applicable law and any agreements in effect on the date hereof to
which it is a party, the Company shall, with respect to each Right,
make adequate provision to substitute upon exercise of such Right at
the then current Purchase Price in accordance with the terms of this
Agreement, (1) cash, (2) a reduction in the Purchase Price, (3) other
equity securities of the Company (including without limitation shares
or units of shares of preferred stock or other securities, except to
the extent that the Company has not obtained any necessary regulatory
approval for such issuance, (4) debt securities of the Company, except
to the extent that the Company has not obtained any necessary
regulatory approval for such issuance, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the
"current per share market price" (as determined pursuant to
Section 11(d)(ii) hereof) of the Common Stock for which such Right is
otherwise exercisable, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of
Directors of the Company. If prohibited by law from delivering such
substitute consideration, the Company shall nonetheless deliver, upon
exercise of each Right, a number of shares, or units of shares, of (x)
Common Stock (up to the maximum number of shares of Common Stock which
may permissibly be issued using the allocation procedure specified in
the second sentence of Section 11(k)) and (y) preferred stock (or
other equity securities) of the Company equal in the aggregate to the
number of Adjustment Shares (as defined in subparagraph (ii) of this
Section 11(a)) where the Board of Directors of the Company shall have
deemed such shares or units, other than the shares of Common Stock, to
have at least the same economic value as the Common Stock (hereinafter
referred to as a "common stock equivalent"); provided, however, if
there are unavailable sufficient shares (or fractions of shares) of
Common Stock and/or common stock equivalents, then the Company shall
take all such action as may be necessary to authorize additional
shares of Common Stock or common stock equivalents for issuance upon
exercise of the Rights, including the calling of a meeting of
shareholders; and provided further, that if the Company is unable to
cause sufficient shares of Common Stock and/or common stock
equivalents to be available for issuance upon exercise in full of the
Rights, then each Right shall thereafter represent the right to
receive the Adjusted Number of Common Shares upon exercise at the
Adjusted Purchase Price (as such terms are hereinafter defined). As
used herein, the term Adjusted Number of Common Shares shall be equal
to that number of shares (or fractions of shares) of Common Stock
(and/or shares or units of common stock equivalents) equal to the
product of (x) the number of Adjustment Shares and (y) a fraction, the
numerator of which is the number of shares of Common Stock (and/or
shares or units of common stock equivalents) available for issuance
upon exercise of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise issuable upon exercise
in full of all Rights (assuming there were sufficient shares of Common
Stock available) (such fraction being referred to as the "Proration
Factor"). The Adjusted Purchase Price shall mean the product of the
Purchase Price and the Proration Factor. The Board of Directors may,
but shall not be required to, establish procedures to allocate the
right to receive Common Stock and common stock equivalents upon
exercise of the Rights among holders of Rights.
(b) If the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Stock (or shares
having the same or more favorable rights, privileges and preferences
as the Common Stock (hereinafter referred to as "alternate stock")) or
securities convertible into Common Stock or alternate stock at a price
per share of Common Stock or per share of alternate stock (or having a
conversion price per share, if a security convertible into Common
Stock or alternate stock) less than the current market price (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 shares of
Common Stock outstanding on such record date, plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock and/or alternate stock to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date, plus the number of
additional shares of Common Stock and/or alternate stock 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 determined reasonably and with good faith to
the holders of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent. Shares of Common
Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights 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) If the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend at a
rate not in excess of 125% of the rate of the last cash dividend
theretofore paid), assets (other than a dividend payable in Common
Stock, but including any dividend payable in stock other than Common
Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as defined in
Section 11(d)) per share of Common Stock on such record date, less the
fair market value (as determined reasonably and with good faith to the
holders of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants distributable in respect of one
share of Common Stock and the denominator of which shall be the
current market price per share of the Common Stock; provided, however,
that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
Such 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 be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other
than in Section 11(a)(iii), the "current market price" per share of
Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the 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 the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the expiration
of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current market
price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading 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 shares of
Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on
such date as determined reasonably and with good faith by the Board of
Directors of the Company shall be used and shall be binding on the
Rights Agent. The term, "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, a Business Day. If
the Common Stock are not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share
determined reasonably and with good faith to the holders of Rights by
the board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years
from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date.
(f) If, as a result of any provision of Section 11(a) or
13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in
Section 11(a) through (c), inclusive, and the provisions of Sections
7, 9, 10, 11, 13 and 15 hereof with respect to the Common Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
shares of Common Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculation made in Section 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Common Stock (calculated to
the nearest ten-thousandth) obtained by (i) multiplying (x) the number
of shares of Common Stock covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Common
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of shares of Common Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after 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 Rights Certificates have
been issued, shall be at least 10 days later than the date of the
public announcement. If Rights 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 Rights Certificates on such record
date Rights Certificates evidencing, subject to Section 15 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 Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record or Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share
and the number of shares which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
shares of Common Stock or other securities issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of
Common Stock or other securities at such adjusted Purchase Price. If
upon any exercise of the Rights, a holder is to receive a combination
of Common Stock and common stock equivalents, a portion of the
consideration paid upon such exercise, equal to at least the then par
value of a share of Common Stock of the Company, shall be allocated as
the payment for each share of Common Stock of the Company so received.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right
exercised after such record date the shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the shares of Common Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence
of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11
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 Stock, issuance wholly for
cash of any shares of Common Stock at less than the current market
price, issuance wholly for cash or shares of Common Stock or
securities which by their terms are convertible into or exchangeable
for share of Common Stock, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Common Stock shall not
be taxable to such shareholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Amendment Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of shares
or (iv) issue any shares of its capital stock in a reclassification of
the outstanding Common Stock, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event (or, in the event that any adjustment is made in connection with
such event by reason of Section 11(i), after such adjustment) by a
fraction the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares
of Common Stock outstanding immediately after the occurrence of the
event.
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 (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a
Rights Certificate in accordance with Section 26 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with,
or merge with and into, any other Person (y) 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 (other than, in the case of either transaction described in (x)
or (y), a merger or consolidation which would result in all of the
Voting Power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving
entity) all of the Voting Power represented by the securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation), or (z) the
Company shall sell, mortgage or otherwise transfer (or one or more of
its subsidiaries shall sell, mortgage or otherwise transfer), in one
or more transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) to any other Person, then, and in each such case,
proper provision shall be made so that (i) following the Distribution
Date, each holder of a Right, subject to Section 7(e), shall have the
right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such
number of shares of freely tradeable Common Stock of the Principal
Party (as hereinafter defined), free and clear of liens, rights of
call or first refusal, encumbrances or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of shares of Common Stock for which a
Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and dividing
that product by (2) 50% of the current market price per share of the
Common Stock of such Principal Party (determined pursuant to Section
11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party 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 Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (iv) such Principal Party shall
take steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with
Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares
of Common Stock thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or
(y) of the first sentence of this Section 13, the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to the
merger or consolidation (including, if applicable, the Company, if it
is the surviving corporation); and
(ii) in the case of any transaction described in (z) of
the first sentence in this Section 13, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided,
however, that in any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect subsidiary or Affiliate of another
Person, "Principal Party" shall refer to such other Person; (2) in
case such Person is a subsidiary, directly or indirectly, or an
Affiliate of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer
to whichever of such Persons is the issuer of the common stock having
the greatest aggregate market value; and (3) in case such Person is
owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each
of the chains of ownership having an interest in such joint venture as
if such party were a "subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and each Principal Party and each other Person who may become
a Principal Party as a result of such consolidation, merger, sale or
transfer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in paragraph (a) of this Section 13, the
Principal Party at its own expense will
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, will use its best
efforts to cause such registration statement to become effective as
soon as practicable after such filing and will use its best efforts to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary or
appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all material respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Additional Covenants.
(a) After the Stock Acquisition Date, the Company covenants
and agrees that it shall not (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer to, in one or more transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its subsidiaries taken as a whole,
any other Person if at the time of or after such consolidation, merger
or sale there are any charter or by-law provisions or any rights,
warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to
be afforded by the Rights. The Company shall not consummate any such
consolidation, merger or sale unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights
Agent a supplemental agreement evidencing compliance with this
subsection.
(b) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 24
hereof, take any action the purpose or effect of which is to diminish
or otherwise eliminate the benefits intended to be afforded by the
Rights.
Section 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(n), or distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights 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 15(a), the current market
value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be the last sale price, 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 reasonably and
with good faith to the holders of Rights by the Board of Directors of
the Company shall be used and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a share of Common Stock. For
purposes of this Section 15(b), the current market value of a share of
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 giving rise to the right to receive
common stock equivalents or other securities upon the exercise of a
Right, the Company shall not be required to issue fractions of shares
or units of such common stock equivalents or other securities upon
exercise of the Rights or to distribute certificates which evidence
fractional common stock equivalents or other securities. In lieu of
fractional shares or units of such common stock equivalents or other
securities, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market
value of a share or unit of such common stock equivalent or other
securities. For purposes of this Section 15(c), the current market
value shall be determined in the manner set forth in Section 11(d)
hereof for the Trading Day immediately prior to the date of such
exercise and, if such common stock equivalent is not traded, each such
common stock equivalent shall have the value of a share of Common
Stock.
(d) Except as otherwise expressly provided herein, the
holder of a Right by the acceptance of the Rights expressly waives its
right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 16. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of
any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, its right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights 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 shall be entitled to specific
performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement. Holders of Rights shall be entitled
to recover the reasonable costs and expenses, including attorneys'
fees, incurred by them in any action to enforce the provisions of this
Agreement.
Section 17. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and
the Rights Agent 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 Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 18. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the shares of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provision
thereof.
Section 19. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock
or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the stock transfer
of corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
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 22 hereof. In case at that time
such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights 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 Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at the time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
Section 21. 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 Rights Certificates, by their acceptance thereof, shall
be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it
in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person) be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President or the
Executive Vice President of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(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 Rights Certificates (except as to the fact that it
has countersigned the Rights Certificates) 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 to 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 Rights 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 Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it be responsible for any
determination by the Board of Directors of the Company of the current
market value of the Rights or Common Stock pursuant to the provisions
of Section 15 hereof; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or other securities to be
issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or other securities will, when so
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder and certificates delivered pursuant to any provision hereof
from the Chairman of the Board, the President, the Executive Vice
President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, and is
authorized to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(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, omission,
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company or to the holders of the Rights resulting from
any such act, omission, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Stock by registered
or certified mail, and to holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. 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 Rights Certificate (who shall, with such notice, submit
its Rights Certificate for inspection by the Company), then the
registered holder of any Rights 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) a corporation organized and doing business under
the laws of the United States or of the State of South Dakota (or of
any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of
South Dakota), in good standing, which is authorized under such laws
to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has
at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a corporation
described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 22, 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 23. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights 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 per share and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates
made in accordance with the provisions of this Agreement.
Section 24. Redemption and Termination.
(a) (i) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (x) the Stock Acquisition
Date or (y) the close of business on the Final Expiration Date, redeem
all but not less than all of the then outstanding Rights at a
redemption price of $.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").
(ii) In addition, the Board of Directors of the
Company may redeem all but not less than all of the then outstanding
Rights at the Redemption Price following the occurrence of a Stock
Acquisition Date but prior to any event described in Section 13(a)
either, (x) in connection with any event specified in Section 13(a) in
which all holders of Common Stock are treated alike and not involving
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or any other Person in which such Acquiring Person, Affiliate
or Associate has any interest, or any other Person acting directly or
indirectly on behalf of or in association with any such Acquiring
Person, Affiliate or Associate, or (y) following the occurrence of the
event set forth in Section 11(a)(ii) if and for as long as the
Acquiring Person is not thereafter the Beneficial Owner of securities
representing 15% or more of the outstanding shares of the Voting
Power, and at the time of redemption there are no other Persons who
are Acquiring Persons.
(b) In the case of a redemption permitted under Section
24(a)(i), immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent and without any further action
and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price. In the case of a redemption
permitted only under Section 24(a)(ii), evidence of which shall have
been filed with the Rights Agent, the right to exercise the Rights
will terminate and represent only the right to receive the Redemption
Price only after twenty days following the giving of notice of such
redemption to the holders of such Rights. Within ten days after the
action of the Board of Directors ordering any such redemption of the
Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such
notice to the Rights Agent and to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given whether or not the holder
receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23 and
other than in connection with the purchase of Common Stock prior to
the Distribution Date.
(c) The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights and (ii) mailing
payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent of the Common Stock, and upon such action,
all outstanding Rights Certificates shall be null and void without any
further action by the Company.
Section 25. Exchange.
(a) Subject to Section 25(d), the Board of Directors of the
Company may, at its option, at any time after the time that 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 7(e) and
Section 11(a)(ii) hereof) for shares of Common Stock of the Company at
an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other
than the Company, any subsidiary of the Company, any employee benefit
plan of the Company or any such subsidiary, any entity holding shares
of Common Stock for or pursuant to the terms of any such plan or any
trustee, administrator or fiduciary of such a plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 25 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the shares of Common Stock for
Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) and
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with
this Section 25, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights; and, consistent with the provisions of
Section 9(e) and Section 11(a)(iii) hereof, in the event the Company
is unable to cause shares of Common Stock to be delivered in exchange
for Rights for any reason within 90 days after the announcement of the
decision to exchange Rights pursuant to Section (a) of this
Section 25, the Company shall substitute for each share of Common
Stock otherwise issuable upon the exchange of Rights, cash, other
assets or other securities of the Company (or any combination of the
foregoing) having an aggregate value equal to the "current per share
market price" (as determined pursuant to Section 11(d)(ii) hereof), as
determined by the Board of Directors of the Company.
(d) The Board of Directors may only exchange Rights pursuant
to Section 25(a) hereof if (i) a majority of the Continuing Directors
(as defined in Section 28) and (ii) a majority of all of the directors
of the Company authorize such exchange. Notwithstanding anything in
this Agreement to the contrary, the Rights may not be exchanged
pursuant to this Section 25 unless there is at least one member of the
Board of Directors of the Company who is a Continuing Director.
Section 26. Notice of Certain Events. In case the Company
shall propose (a) to pay any dividend payable in stock of any class to
the holders of Common Stock or to make any other distribution to the
holders of Common Stock (other than a regular periodic cash dividend
at a rate not in excess of 125% of the rate of the last cash dividend
theretofore paid) or (b) to offer to the holders of Common Stock
rights or warrants to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any other
securities, rights or options or (c) to effect any reclassification of
its Common Stock (other than a reclassification involving only the
subdivision of outstanding shares of Common Stock) or (d) to effect
any consolidation or merger into or with any other Person (other than
a subsidiary of the Company in a transaction which does not violate
Section 14(b) hereof), or to effect any sale or other transfer (or to
permit one or more of its subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a
whole) to, any other Person, or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, 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 shares of Common Stock,
if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least 20
days prior to the record date for determining holders of the shares of
Common Stock for purposes of such action, and in the case of any such
other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of
the shares of Common Stock whichever shall be the earlier.
In case the event set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as
soon as practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
Section 27. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
any Rights 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:
Northwestern Public Service Company
600 Market Street
P.O. Box 1318
Huron, South Dakota 57350-1318
Attention: Secretary
Subject to the provisions of Section 22, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Norwest Bank Minnesota, N.A.
Stock Transfer Department
161 North Concord Exchange
P.O. Box 64854
St. Paul, Minnesota 55164-0854
Attention: Stock Transfer Administrator
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights
Certificate shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 28. Supplements and Amendments. The Company and the
Rights Agent may from time to time supplement or amend this Agreement
without 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, to extend the period of redemption provided for in Section 24
hereof, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Rights Agent may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates; provided, however,
that this Agreement may not be supplemented or amended in any way
unless the Company's Board of Directors consists of a majority of
Continuing Directors (as hereinafter defined) at the time of such
amendment or supplement. "Continuing Director" shall mean a director
who either was a member of the Board of Directors of the Company
prior to the Record Date, or who subsequently became a director of the
Company and whose initial election or initial nomination for election
by the Company's shareholders subsequent to such date was approved by
a majority of the Continuing Directors then on the Board of Directors
of the Company. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or
amendment unless the Rights Agent shall have determined in good faith
that such supplement or amendment would adversely affect its interest
under this Agreement. Prior to this Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 29. Determination and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock or any other securities of
which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13D-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the
Company shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights Certificates and
all other parties, and (y) not subject the Board to any liability to
the holders of the Rights Certificates.
Section 30. 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 31. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificate (and, prior to the Distribution Date, the Common Stock)
any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Common Stock).
Section 32. 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 33. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and to be
performed entirely within such State.
Section 34. 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 35. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of
the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
ATTEST: NORTHWESTERN PUBLIC SERVICE
COMPANY
By: /s/ Alan D. Dietrich By: /s/ Merle D. Lewis
---------------------- -------------------
Name: Alan Dietrich Name: Merle D. Lewis
Title: Secretary Title: President
ATTEST: NORWEST BANK MINNESOTA, N.A.
By: /s/ Nancy Rosengren By: /s/ Barbara M. Novak
-------------------- --------------------
Nancy Rosengren Barbara M. Novak
Assistant Secretary Assistant Vice President
<PAGE>
Exhibit A
FORM OF RIGHTS CERTIFICATE
Certificate No. R- Rights
----
NOT EXERCISABLE AFTER DECEMBER , 2006, OR
---
EARLIER IF NOTICE OF REDEMPTION IS GIVEN. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT BETWEEN NORTHWESTERN
PUBLIC SERVICE COMPANY AND NORWEST BANK MINNESOTA,
N.A. (THE "RIGHTS AGREEMENT"). [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE WERE ISSUED
TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON.
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID TO THE EXTENT PROVIDED BY,
AND UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.]<F1>
Rights Certificate
NORTHWESTERN PUBLIC SERVICE 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 December 11, 1996
(the "Rights Agreement"), between Northwestern Public Service Company,
a Delaware corporation (the "Company"), and Norwest Bank Minnesota,
N.A., a national banking association (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M. (Central
time) on December 10, 2006, at the principal office of the Rights
Agent in South St. Paul, Minnesota, one fully paid, non-assessable
share of the Common Stock, $3.50 par value (the "Common Stock"), of
the Company, at a purchase price of $100 per share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate
with the appropriate Form of Election to Purchase duly executed. The
number of Rights evidenced by this Rights Certificate (and the number
of shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are the number and
Purchase Price as of December 19, 1996 based on the Common Stock of
the Company as constituted at such date.
<F1> The portion of the legend in brackets shall be inserted only if applicable.
<PAGE>
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Preferred Stock or other securities which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the
happening of certain events.
This Rights 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 Rights Certificates. Copies
of the Rights Agreement are on file at the principal office of the
Company, and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be
exercised (other than pursuant to Section 11(a)(ii) of the Rights
Agreement) in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised. If this Rights Certificate
shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this
Rights Certificate duly marked to indicate such exercise has occurred
as set forth in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at
its option at a redemption price of $.01 per Right. Subject to the
provisions of the Rights Agreement, the Company, at its option, may
elect to mail payment of the redemption price to the registered holder
of the Right at the time of redemption, in which event this
Certificate may become void without any further action by the Company.
No fractional shares of Common Stock 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 Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the
holder of shares of Common Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights
of a 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 Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights 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 December 19, 1996.
[SEAL] ATTEST: NORTHWESTERN PUBLIC SERVICE
COMPANY
By: By:
--------------------------- ------------------------------
Name: Name:
Title: Title:
Countersigned:
NORWEST BANK MINNESOTA, N.A.
By:
----------------------------
Authorized Signatory
Name:
Title:
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
Attorney, to transfer the within Rights ------------
Certificate on the books of the within-named Company, with full power
of substitution.
Dated: , 19
------------- ----
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank, savings
association, credit union or trust company having an office or
correspondent in the United States or other eligible guarantor
institution which is a participant in a signature guarantee medallion
program.
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being sold, assigned or transferred by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is or was or
subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated:
---------------- -----, --------
Signature
<PAGE>
[Form of Reverse Side of Rights Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights Certificate pursuant to Section 11(a)(ii)
of the Rights Agreement.)
To: NORTHWESTERN PUBLIC SERVICE COMPANY
The undersigned hereby irrevocably elects to exercise
-----
Rights represented by this Rights Certificate to purchase the shares
of Common Stock (or other securities of the Company) issuable upon the
exercise of such Rights and requests that certificates for such shares
be issued in the name of:
(Please insert social security or other identifying number)
(Please print name and address)
The Rights Certificate indicating the balance, if any, of
such Rights that may still be exercised pursuant to Section 11(a)(ii)
of the Rights Agreement shall be returned to the undersigned unless
such person requests that the Rights Certificate be registered in the
name of and delivered to:
(Please insert social security or other identifying number.)
(Complete only if the Rights Certificate is to be registered in
a name other than the undersigned's.)
(Please print name and address)
Dated:
-------------- ----, ------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank, savings
association, credit union or trust company having an office or
correspondent in the United States or other eligible guarantor
institution which is a participant in a signature guarantee medallion
program.
<PAGE>
[Form of Reverse Side of Rights Certificate -- continued]
Certificate
The undersigned hereby certifies that by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person;
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated:
-------------- ---, -----
Signature
NOTICE
The signature on the foregoing Forms of Assignment and
Election to Purchase and Certificates must correspond to the name as
written upon the face of this Rights 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 Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
<PAGE>
Exhibit B
NORTHWESTERN PUBLIC SERVICE COMPANY
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On December 9, 1996, the Board of Directors of Northwestern
Public Service Company (the "Company") declared a dividend
distribution of one Right for each outstanding share of common stock,
$3.50 par value (the "Common Stock"), of the Company to shareholders
of record at the close of business on December 19, 1996 (the "Record
Date"). The Company thereupon entered into a Rights Agreement (dated
as of December 11, 1996) with Norwest Bank Minnesota, N.A. as Rights
Agent. Except as set forth below, each Right, when exercisable,
entitles the registered holder to purchase from the Company one share
of Common Stock at a price of $100 per share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are
set forth in the Rights Agreement (the "Rights Agreement") between the
Company and Norwest Bank Minnesota, N.A. as Rights Agent.
The Rights are now attached to all Common Stock certificates
representing shares currently outstanding, and no separate Right
certificates have been distributed. Until the earlier to occur of (i)
ten days following a public announcement that, without the prior
consent of the Company, a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of securities having 15% or more of the
voting power of all outstanding voting securities of the Company (the
date of said public announcement being the "Stock Acquisition Date")
or (ii) ten days following the commencement of (or a public
announcement of an intention to make) a tender offer or exchange offer
which would result in any person or group and related persons becoming
an Acquiring Person, without the prior consent of the Company (the
earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificate together with this Summary of Rights. The Rights
Agreement provides that, until the Distribution Date, the Rights will
be transferred with and only with Common Stock certificates. From as
soon as practicable after the Record Date and until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common
Stock certificates issued after the Record Date upon transfer or new
issuance of the Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Stock outstanding (with or
without this Summary of Rights attached) will also constitute the
transfer of the Rights associated with the Common Stock represented by
such certificate. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights (the "Rights
Certificates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date, and the separate
Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 10, 2006 unless earlier redeemed by the
Company as described below.
The Purchase Price payable, and the number of shares of the
Common Stock or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Common Stock, (ii) upon the
grant to holders of the Common Stock of certain rights or warrants to
subscribe for Common Stock, certain convertible securities or
securities having the same or more favorable rights, privileges and
preferences as the Common Stock at less than the current market price
of the Common Stock or (iii) upon the distribution to holders of the
Common Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends at a rate not in excess of 125% of the rate of
the last cash dividend therefore paid and dividends payable in Common
Stock) or of subscription rights or warrants (other than those
referred to above).
In the event that after a Stock Acquisition Date, (i) the Company
consolidates with, or merges into, another entity, (ii) any other
entity consolidates with, or merges into the Company (other than, in
the case of either transaction described in (i) and (ii), certain
reorganization transactions), or (iii) the Company sells, mortgages or
otherwise transfers 50% or more of its assets or earning power (in one
transaction or a series of transactions), proper provision shall be
made so that each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring
company or, in certain cases, its affiliated company (or, in the event
there is more than one acquiring company, the acquiring company
receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market
value of two times the exercise price of the Right (such right being
called the "Flip-Over Right").
In the event that a person becomes the beneficial owner of
securities having a 15% or more of the voting power of all then
outstanding voting securities of the Company (unless pursuant to a
tender or exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by at least a majority of the members
of the Board of Directors who are not officers of the Company to be
adequate and otherwise in the best interests of the Company and its
constituents, including shareholders), proper provision shall be made
so that each holder of a Right will have the right to receive upon
exercise that number of shares (or fractional shares) of Common Stock
(or shares, or units of shares of preferred stock or other equity
securities of the Company having at least the same value and voting
rights as the Common Stock) having a market value of two times the
exercise price of the Right, subject to the availability of a
sufficient number of authorized but unissued shares (such right being
called the "Flip-In Right"). The holder of a Right will continue to
have the Flip-Over Right whether or not such holder exercises the
Flip-In Right.
Upon the occurrence of the event giving rise to the
exercisability of the Flip-In Right, any Rights that are or were at
any time owned by an Acquiring Person on or after the time the
Acquiring Person becomes such shall become void.
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments require an adjustment of
at least 1% in such Purchase Price. No fractions of shares will be
issued and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Common Stock on the last trading date prior
to the date of the exercise.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, the
Company may redeem the rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"), which redemption shall be
effective upon the action of the Board of Directors. Additionally,
the Company may thereafter redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price provided that such
redemption is incidental to a merger, or other business combination
transaction or series of transactions involving the Company but not
involving an Acquiring Person or any person who was an Acquiring
Person or, following an event giving rise to the Flip-In Right, if and
for as long as an Acquiring Person beneficially owns securities
representing less than 15% of the voting power of the Company's voting
securities. The redemption of Rights described in the preceding
sentence shall be effective only after 20 days prior notice. Upon the
effective date of the redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an exhibit to a Registration Statement on
Form 8A. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference
to the Rights Agreement, which is incorporated herein by reference.
