SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 19, 1996
BATTLE MOUNTAIN GOLD COMPANY
(Exact name of registrant as specified in its charter)
NEVADA 1-9666 76-0151431
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
333 CLAY STREET, 42ND FLOOR
HOUSTON, TEXAS 77002
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (713) 650-6400
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 15, 1996, the shareholders of Hemlo Gold Mines Inc., an
Ontario corporation ("Hemlo Gold"), approved the arrangement (the "Arrangement")
under Section 182 of the Business Corporations Act (Ontario) contemplated by the
Combination Agreement (the "Combination Agreement") effective as of March 11,
1996 by and between Battle Mountain Gold Company, a Nevada corporation ("Battle
Mountain"), and Hemlo Gold, and the stockholders of Battle Mountain approved and
adopted the Combination Agreement and the transactions contemplated thereby. The
Arrangement became effective at 12:01 a.m. (Toronto time) on July 19, 1996, and
as a result, each outstanding common share (the "Hemlo Gold Common Shares") of
Hemlo Gold was exchanged for 1.48 exchangeable shares (the "Exchangeable
Shares") of Hemlo Gold, Battle Mountain became the beneficial owner of all of
the outstanding Hemlo Gold Common Shares, and Hemlo Gold changed its name to
Battle Mountain Canada Ltd. ("Battle Mountain Canada"). Each Exchangeable Share
(a) entitles its holder to dividends economically equivalent to dividends paid
on the Common Stock, par value $0.10 per share, of Battle Mountain (the "Battle
Mountain Common Stock"), (b) is exchangeable for one share of Battle Mountain
Common Stock, (c) will, pursuant to the Voting, Support and Exchange Trust
Agreement dated as of July 19, 1996 between Hemlo Gold, Battle Mountain and
The R-M Trust Company, in which a share of Special Voting Stock, par value $0.10
per share, of Battle Mountain was deposited, carry the right to vote at meetings
of the stockholders of Battle Mountain and (d) entitles its holder to
participate in any liquidation of Battle Mountain on the same basis as holders
of Battle Mountain Common Stock. Battle Mountain Canada's assets include the
Golden Giant Mine, near Marathon, Ontario, Canada, and a 55 percent interest in
the Silidor Mine located near Rouyn-Noranda, Quebec. In addition, Battle
Mountain Canada carries on an active exploration and development program for
precious metals. Its development projects include the Holloway project in
Ontario. Battle Mountain Canada also owns a 60 percent interest in Crown Butte
Resources Ltd., which owns the New World project in Montana, U.S.A. The
transactions relating to the combination of Battle Mountain and Hemlo Gold are
more fully described in the Joint Management Information Circular and Proxy
Statement filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, on June 11, 1996 (the "Joint Proxy
Statement").
The number of Exchangeable Shares received by holders of Hemlo Gold
Common Shares, which constitutes the consideration paid by Battle Mountain to
such holders of Hemlo Gold Common Shares, in connection with the Arrangement was
determined by negotiations between Battle Mountain and Hemlo Gold.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
The financial information of Hemlo Gold included on pages FS-30 to
FS-48 of the Joint Proxy Statement is incorporated herein by
reference.
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(b) Pro forma financial information.
The financial information of Battle Mountain and Hemlo Gold included
on pages 26 to 33 of the Joint Proxy Statement is incorporated
herein by reference.
(c) Exhibits
EXHIBIT NO. EXHIBIT
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*2(a) Plan of Arrangement of Hemlo Gold under Section 182 of
the Business Corporations Act (Ontario) (Annex D to the
Joint Proxy Statement).
*2(b) Combination Agreement effective as of March 11, 1996 by
and between Battle Mountain and Hemlo Gold (Annex C to
the Joint Proxy Statement).
4(a)(1) Restated Articles of Incorporation of Battle Mountain,
as amended and restated through May 11, 1988.
4(a)(2) Certificate of Amendment to Restated Articles of
Incorporation of Battle Mountain filed with the
Secretary of State of the State of Nevada on
July 19, 1996.
4(b) Certificate of Resolution Establishing Designation,
Preferences and Rights of $3.25 Convertible Preferred
Stock.
4(c) Certificate of Amendment of Certificate of Resolution
Establishing Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock.
4(d) Bylaws of Battle Mountain as amended through
July 19, 1996.
4(e) Rights Agreement, dated November 10, 1988, as amended
and restated as of July 19, 1996, between Battle
Mountain and The Bank of New York, as Rights Agent.
4(f) Rights Agreement, dated July 19, 1996, between Battle
Mountain Canada and The R-M Trust Company, as Rights
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* Incorporated by reference as indicated.
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EXHIBIT NO. EXHIBIT
----------- -------
Agent.
*4(g) Voting, Support and Exchange Trust Agreement dated as of
July 19, 1996 between Battle Mountain, Hemlo Gold and
The R-M Trust Company (Annex E to the Joint Proxy
Statement).
10(a) Registration Rights Agreement, dated as of
July 19, 1996, between Noranda Inc., Kerr Addison Mines
Limited and Battle Mountain.
*99(a) Audited consolidated financial statements of Hemlo Gold,
including accountants' reports, as of December 31, 1994
and 1995, and for each of the three years in the
period ended December 31, 1995 (pages FS-30 to FS-44 of
the Joint Proxy Statement).
*99(b) Unaudited interim financial statements of Hemlo Gold as
of December 31, 1995 and March 31, 1996 and for each of
the three-month periods ended March 31, 1995 and 1996
(pages FS-45 to FS-48 of the Joint Proxy Statement).
*99(c) Unaudited Pro Forma Financial Information of the Battle
Mountain and Hemlo Gold as of March 31, 1996, for each
of the three years in the period ended December 31, 1995
and for each of the three-month periods ended
March 31, 1995 and 1996 (pages 26 to 33 of the Joint
Proxy Statement).
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* Incorporated by reference as indicated.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BATTLE MOUNTAIN GOLD COMPANY
Date: August 2, 1996 By: /s/ R. DENNIS O'CONNELL
R. Dennis O'Connell
Executive Vice President - Finance and
Corporate Development
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EXHIBIT 4(a)(1)
RESTATED
ARTICLES OF INCORPORATION
of
BATTLE MOUNTAIN GOLD COMPANY
BATTLE MOUNTAIN GOLD COMPANY (the "Corporation"), a corporation
organized under the laws of the State of Nevada, by its President and Secretary,
does hereby certify that:
1. Pursuant to the provisions of Sections 78.403 and 78.390 of the
Nevada Revised Statutes, the Corporation hereby amends and restates its Articles
of Incorporation, as heretofore amended, and adopts the following Restated
Articles of Incorporation:
FIRST: The name of the corporation is BATTLE MOUNTAIN GOLD COMPANY
(the "Corporation").
SECOND: The principal office or place of business of the Corporation
in the State of Nevada is to be located at One East First Street, in the
City of Reno, County of Washoe.
THIRD: The Corporation may engage in any lawful activity.
FOURTH: The amount of the total authorized capital stock of the
Corporation, and the number and par value of the shares of which it is to
consist, is 220,000,000 shares, amounting in the aggregate to Forty
Million Dollars ($40,000,000), divided into classes as follows:
20,000,000 shares shall be Preferred Stock, $1.00 par value
("Preferred Stock"); and
200,000,000 shares shall be Common Stock, $0.10 par value
("Common Stock").
Shares of any class of stock of the Corporation may be issued for such
consideration and for such corporate proposes as the Board of Directors
may from time to time determine. The capital stock, after the amount of
the subscription price (which shall not be less than the par value) has
been paid in, shall not be subject to assessment.
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The following is a description of the different classes and a
statement of the relative rights of the holders of the Preferred Stock and
Common Stock.
SECTION I. PREFERRED STOCK
The Board of Directors of the Corporation is authorized at any time
and from time to time to provide for the issuance of shares of Preferred
Stock of the Corporation in one or more series with such voting powers,
full or limited, or without voting powers, and with such designations,
preferences and relative, participating, optional or other special rights,
and qualifications, limitations or restrictions thereof as are stated and
expressed in these Articles of Incorporation, and, to the extent not so
stated or expressed, as may be stated and expressed in a resolution or
resolutions establishing such series and providing for the issuance
thereof adopted by the Board of Directors pursuant to the authority so to
do which is hereby expressly vested in it including, without limiting the
generality of the foregoing, the following:
(1) the designation and number of shares of each such series;
(2) the dividend rate of each such series, the conditions and
dates upon which such dividends shall be payable, the
preference or relation of such dividends to dividends payable
on any other class or classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or
noncumulative;
(3) whether the shares of each such series shall be subject to
redemption by the Corporation, and, if made subject to such
redemption, the times, prices, rates, adjustments and other
terms and conditions of such redemption;
(4) the terms and amount of any sinking or similar fund provided
for the purchase or redemption of the shares of each such
series;
(5) whether the shares of each such series shall be convertible
into or exchangeable for shares of capital stock or other
securities of the Corporation or of any other corporation,
and, if provision be made for conversion or exchange, the
times, prices, rates, adjustments and other terms and
conditions of such conversion or exchange;
(6) the extent, if any, to which the holders of the shares of any
series shall be entitled to vote as a class or otherwise with
respect to the election of directors or otherwise;
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(7) the restrictions and conditions, if any, upon the issue or
reissue of any additional Preferred Stock ranking on a parity
with or prior to such shares as to dividends or upon
dissolution;
(8) the rights of the holders of the shares of such series upon
the dissolution of, or upon the distribution of assets of, the
Corporation, which rights may be different in the case of
voluntary dissolution than the case of involuntary
dissolution; and
(9) any other relative rights, preferences or limitations of
shares of such series consistent with this Article FOURTH and
applicable law.
The powers, preferences and relative, participating, optional and
other special rights of each series of Preferred Stock of the Corporation,
and the qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time outstanding. All
shares of any one series of Preferred Stock of the Corporation shall be
identical in all respects with all other shares of such series, except
that shares of any one series issued at different times may differ as to
the dates from which dividends thereon shall be cumulative. Except as may
otherwise be required by law or these Articles of Incorporation, the terms
of any series of Preferred Stock may be amended without consent of the
holders of any other series of Preferred Stock or of any class of Common
Stock of the Corporation.
SECTION II. COMMON STOCK
1. VOTING RIGHTS.
(a) Each share of Common Stock shall entitle the holder
thereof to one vote for each share held.
(b) No holder of Common Stock shall have the right to cumulate
votes in the election of Directors of the Corporation or for any
other purpose.
2. DIVIDENDS, COMBINATIONS AND RECLASSIFICATIONS. Subject to the
rights of holders of Preferred Stock of the Corporation, the holders of
Common Stock shall be entitled to share ratably, on a share for share
basis, in any and all dividends, payable in cash or otherwise, as may be
declared in respect of their holdings by the Board of Directors from time
to time out of assets or funds of the Corporation legally available
therefor.
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SECTION III. PROVISIONS APPLICABLE TO
ALL CLASSES
1. LIQUIDATION RIGHTS. In the event of any dissolution, liquidation
or winding up of the affairs of the Corporation, whether voluntary or
involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation, the holders of each series of Preferred
Stock shall be entitled to receive, out of the net assets of the
Corporation, an amount for each share equal to the amount fixed and
determined in accordance with the respective rights and priorities
established by the Board of Directors in any resolution or resolutions
providing for the issuance of any particular series of Preferred Stock
before any of the assets of the Corporation shall be distributed or paid
over to holders of Common Stock. After payment in full of said amounts to
the holders of Preferred Stock of all series, holders of Common Stock
shall be entitled to share ratably in the remaining net assets of the
Corporation, such that an equal amount of net assets shall be allocated to
each share of Common Stock. A merger or consolidation of the Corporation
with or into any other corporation or a sale or conveyance of all or any
part of the assets of the Corporation (which shall not in fact result in
the liquidation of the Corporation and the distribution of assets to
stockholders) shall not be deemed to be a voluntary or involuntary
liquidation or dissolution or winding up of the Corporation within the
meaning of this paragraph 1.
2. PREEMPTIVE RIGHTS. No stockholder of the Corporation shall, by
reason of his holding any shares of any class of the Corporation, have any
preemptive or preferential right to acquire or subscribe for any treasury
or unissued shares of any class of the Corporation now or hereafter to be
authorized, or any notes, debentures, bonds, or other securities
convertible into or carrying any right, option or warrant to subscribe for
or acquire shares of any class of the Corporation now or hereafter to be
authorized, whether or not the issuance of any such shares, or such notes,
debentures, bonds or other securities, would adversely affect the
dividends or voting rights of such stockholder, and the Board of Directors
of the Corporation may issue shares of any class of this Corporation, or
any notes, debentures, bonds or other securities convertible into or
carrying rights, options or warrants to subscribe for or acquire shares of
any class of the Corporation, without offering any such shares of any
class of the Corporation, either in whole or in part, to the existing
stockholders of any class of the Corporation.
FIFTH: All corporate powers shall be exercised by the Board of
Directors, except as otherwise provided by law or by these Articles of
Incorporation.
1. POWERS OF THE BOARD OF DIRECTORS. In furtherance and not in
limitation of the powers conferred by statute, the Board of Directors is
expressly authorized:
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(a) to fix in, or pursuant to, the Bylaws from time to time
the number of Directors of the Corporation consistent with paragraph
2 of this Article FIFTH, none of whom need be stockholders of the
Corporation;
(b) to authorize and cause to be executed mortgages and liens
upon the real and personal property of the Corporation and
conveyances of its real estate;
(c) to set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper
purposes and/or to abolish any such reserve in the manner in which
it was created;
(d) to borrow money and to make and issue notes, bonds,
debentures, obligations and evidence of indebtedness of all kinds,
with or without the privilege of conversion into stock of the
Corporation;
(e) to determine from time to time whether and to what extent,
and at what times and places, and under what conditions and
regulations, the accounts, books and records of the Corporation
(other than the stock ledger), or any of them, shall be open to
inspection of stockholders; and no stockholder shall have any right
of inspecting any account, book, record or document of the
Corporation except as conferred by law, unless authorized by a
resolution of the Board of Directors of the Corporation; and
(f) to designate by resolution or resolutions passed by a
majority of the whole Board of Directors one or more committees,
each committee to consist of one or more of the Directors of the
Corporation, which, to the extent provided in said resolution or
resolutions or in the Bylaws of the Corporation, shall have and may
exercise the power of the Board of Directors in the management of
the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers on which the
Corporation desires to place a seal. Such committee or committees
shall have such name or names as may be stated in the Bylaws of the
Corporation or as may be determined from time to time by resolutions
adopted by the Board of Directors.
The Corporation may confer powers upon the Board of Directors of the
Corporation in its Bylaws in addition to the powers conferred upon the
Board of Directors in these Articles of Incorporation and in addition to
the powers and authorities expressly conferred upon the Board of Directors
by law.
Both stockholders and the Board of Directors may hold their meetings
within or without the State of Nevada, and the Corporation may keep the
books and records of the Corporation (subject to the provisions of
applicable law) outside of the State of Nevada at such places as may be
designated from time to time by the Board of Directors.
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2. ORGANIZATION OF THE BOARD OF DIRECTORS. The number of Directors
that shall constitute the whole Board of Directors of the Corporation
shall be not less than three nor more than twelve as specified from time
to time in, or pursuant to, the Bylaws of the Corporation, except in the
case of any increase in the number of Directors by reason of any provision
entitling the holders of any one or more series of Preferred Stock, voting
as a class, to elect additional Directors in specified circumstances. The
Board of Directors is divided into three classes, Class I, Class II and
Class III. Such classes shall be as nearly equal in number of Directors as
possible. Each Director shall serve for a term ending on the third annual
meeting of stockholders following the annual meeting of stockholders at
which such Director was elected; provided, however, that the Directors
first elected to Class I shall serve for a term ending on the annual
meeting next following the end of the calendar year 1985, the Directors
first elected to Class II shall serve for a term ending on the second
annual meeting next following the end of the calendar year 1985, and the
Directors first elected to Class III shall serve for a term ending on the
third annual meeting next following the end of the calendar year 1985. The
foregoing notwithstanding, each Director shall serve until his successor
shall have been duly elected and qualified unless he shall resign, become
disqualified, disabled or shall otherwise be removed.
At each annual election, the Directors chosen to succeed those whose
terms then expire shall be of the same class as the Directors they
succeed, unless, by reason of any intervening changes in the authorized
number of Directors, the Board of Directors shall designate one or more
directorships whose term then expire as directorships of another class in
order more nearly to achieve equality of the number of Directors among the
classes of Directors.
Notwithstanding the rule that the three classes of Directors shall
be as nearly equal in number of Directors as possible, in the event of any
change in the authorized number of Directors, each Director then
continuing to serve as such shall continue nevertheless as a Director of
the class of Directors of which he is a member until the expiration of his
current term or his prior death, resignation, disqualification or removal.
If any newly created directorship may be allocated to one of two or more
classes of Directors consistent with the rule that the three classes of
Directors shall be as nearly equal in number of Directors as possible, the
Board of Directors shall allocate it to that of the available classes
whose term of office is due to expire at the earliest date following such
allocation.
3. REMOVAL. A Director may be removed from office without cause only
by the affirmative vote of the holders of not less than 80% of the number
of shares of Common Stock then outstanding. A Director may be removed from
office for cause only by the affirmative vote of the holders of not less
than a majority of the number of shares of Common Stock then outstanding.
Except as otherwise provided by law or fixed by, or pursuant to, the
provisions of Article FOURTH hereof relating to the rights of holders of
any class or series of stock having a preference over the Common Stock as
to dividends
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or upon liquidation, this paragraph 3 shall not apply with respect to any
director elected by the holders of any such class or series having a
preference.
4. VACANCIES. Except as otherwise provided for or fixed by, or
pursuant to, the provisions of Article FOURTH hereof relating to the
rights of holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect Directors
under specified circumstances, newly created directorships resulting from
any increase in the number of Directors and any vacancies on the Board of
Directors resulting from death, resignation, disqualification, removal or
other cause shall be filled by the affirmative vote of a majority of the
remaining Directors then in office, even though less than a quorum of the
Board of Directors. Any Director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class
of Directors in which the new directorship was created or the vacancy
occurred and until such Director's successor shall have been elected and
qualified. No decrease in the number of Directors constituting the Board
of Directors shall shorten the term of any incumbent Director.
5. NOMINATIONS. Advance notice of any nomination by a stockholder
for the election of Directors of the Corporation shall be given in the
manner provided in the Bylaws of the Corporation.
SIXTH: No action required to be taken or that may be taken at any
annual or special meeting of stockholders of the Corporation may be taken
without a meeting except by the unanimous written consent of all
stockholders entitled to vote on such action, and the power of
stockholders to consent in writing to the taking of any action by less
than unanimous consent of all such stockholders is specifically denied.
Except as otherwise required by law and subject to the rights of holders
of any class or series of stock having a preference over the Common Stock
as to dividends or upon liquidation, special meetings of stockholders of
the Corporation may be called only by the Board of Directors of the
Corporation pursuant to a resolution approved by a majority of the entire
Board of Directors or by the Chairman of the Board or the President of the
Corporation.
SEVENTH: The existence of the Corporation shall be perpetual.
EIGHTH: 1. Except as set forth in paragraph 4 of this Article
EIGHTH, the affirmative vote of the holders of 80% of the voting power of
all stock of this Corporation entitled to vote in elections of directors
(excluding stock entitled so to be voted only upon the happening of some
contingency unless such contingency shall have occurred and is
continuing), considered for the purposes of this Article EIGHTH and
Article NINTH as one class and hereinafter in this Article EIGHTH and in
Article NINTH embraced in the term "voting stock", shall be required:
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(a) for a merger or consolidation of the Corporation with or
into any other corporation;
(b) for any sale or lease of all or any substantial part of
the assets of the Corporation to any other corporation, person or
other entity; or
(c) for any sale or lease to the Corporation or any subsidiary
thereof of any assets (except assets having an aggregate fair market
value of less than $5,000,000) in exchange for voting stock (or
securities convertible into or exchangeable for voting stock or
options, warrants or rights to purchase voting stock or securities
convertible into voting stock) of the Corporation or any subsidiary
of the Corporation by any other corporation, person or entity,
if as of the record date for the determination of stockholders entitled to
notice thereof and to vote thereon or consent thereto, or as of the time
the Board of Directors shall have approved a memorandum of understanding,
or the Corporation shall have entered into any agreement, with respect to
any such transaction for which the vote of the holders of no class or
series of stock of the Corporation is otherwise required by law, the
Articles of Incorporation or any other contract or agreement, such other
corporation, person or entity which is party to such a transaction is the
beneficial owner, directly or indirectly, of 5% or more of the outstanding
shares of any class or series of voting stock of the Corporation. There
shall also be required for any such transaction for which such affirmative
vote shall be required by this paragraph 1 the affirmative vote of the
holders of a majority of the voting power of the voting stock of this
Corporation, exclusive of all voting stock of this Corporation of which
such other corporation, person or entity which is party to such
transaction is, directly or indirectly, the beneficial owner. Each such
affirmative vote shall be in addition to the vote of the holders of any
class or series of stock of the Corporation otherwise required by law or
the Articles of Incorporation or the resolution or resolutions providing
for the issuance of such class or series which have been adopted by the
Board of Directors or any agreement between the Corporation and any
national securities exchange.
2. For purposes of this Article EIGHTH and Article NINTH any
corporation, person or other entity shall be deemed to be the beneficial
owner of any shares of stock of the Corporation:
(a) which it owns directly, whether or not of record; or
(b) which it has the right to acquire pursuant to any
agreement or understanding or upon exercise of conversion rights,
exchange rights, warrants or options or otherwise;
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(c) which are beneficially owned, directly or indirectly
(including shares deemed to be owned through application of
subparagraph (b) above), by any "affiliate" or "associate" as those
terms are defined in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934 as in effect on June 1,
1985; or
(d) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of subparagraph
(b) above), by any other corporation, person or entity with which it
or its "affiliate" or "associate" has any agreement or arrangement
or understanding for the purpose of acquiring, holding, voting or
disposing of stock of the Corporation.
For the purposes of this Article EIGHTH, the outstanding shares of any
class or series of stock of the Corporation shall include shares deemed
owned through the application of subparagraphs (b), (c) and (d) of
paragraph 2, but shall not include any other shares which may be issuable
pursuant to any agreement or upon exercise of conversion rights, warrants,
options or otherwise. As used in this Article EIGHTH, the term
"subsidiary" shall mean a corporation a majority of the voting power of
the capital stock (that is, voting power entitled to be exercised in the
election of directors, but excluding voting power entitled so to be
exercised only upon the happening of some contingency unless such
contingency shall have occurred and is continuing) of which shall be owned
by the Corporation or by one or more subsidiaries or by the Corporation
and one or more subsidiaries.
3. The Board of Directors shall have the power and duty to determine
for the purposes of this Article EIGHTH and Article NINTH on the basis of
information known to this corporation whether
(a) such other corporation, person or other entity
beneficially owns 5% or more of the outstanding shares of any class
or series of voting stock of the Corporation;
(b) a corporation, person or entity is an affiliate" or
"associate" (as defined in paragraph 2 above) of another;
(c) the assets being acquired by the Corporation, or any
subsidiary thereof, have an aggregate fair market value of less than
$5,000,000; and
(d) the memorandum of understanding referred to in paragraph 4
below is substantially consistent with the transaction covered
thereby.
Any such determination shall be conclusive and binding for all purposes of
this Article EIGHTH and Article NINTH.
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4. The provisions of paragraph 1 of this Article EIGHTH shall not
apply to:
(i) any merger or consolidation of this Corporation with any
corporation, or any sale or lease to this Corporation or any
subsidiary thereof of any assets of, or any sale or lease by this
Corporation or any subsidiary thereof of any of its assets to, any
corporation, person or entity, if the Board of Directors of this
Corporation has approved a memorandum of understanding with such
other corporation, person or entity with respect to such transaction
prior to the time that such other corporation, person or entity
shall have become a beneficial owner of 5% or more of the
outstanding shares of any class or series of voting stock of the
Corporation; or
(ii) any merger or consolidation of this Corporation with, or
any sale or lease to this Corporation or any subsidiary thereof of
any assets of, or any sale or lease by this Corporation or any
subsidiary thereof of any of its assets to, any corporation 50% or
more of the outstanding voting stock of which is beneficially owned,
directly or indirectly, by this Corporation.
NINTH: 1. AMENDMENTS TO ARTICLES OF INCORPORATION. Notwithstanding
any other provision of these Articles of Incorporation or the Bylaws (and
in addition to any other vote that may be required by law, these Articles
of Incorporation or the Bylaws), there shall be required to alter, amend,
repeal or adopt any provision inconsistent with, or in limitation of,
Articles FIFTH, SIXTH, EIGHTH and this Article NINTH the affirmative vote
or consent of (a) the holders of at least 80% of the voting power of the
voting stock of the Corporation and (b) the holders of at least a majority
of the voting power of the voting stock of the Corporation exclusive of
all voting stock of the Corporation beneficially owned, directly or
indirectly, by any corporation, person or entity which is, as of the
record date for the determination of stockholders entitled to notice of
such alteration, amendment, repeal or adoption and to vote thereon, the
beneficial owner of 5% or more of the outstanding shares of any class or
series of voting stock of the Corporation.
2. AMENDMENTS TO BYLAWS. The Board of Directors of the Corporation
shall have the power to make, alter, amend and repeal the Bylaws of the
Corporation (except so far as the Bylaws adopted by stockholders shall
otherwise provide). Any Bylaws made by the Directors under the powers
conferred hereby may be altered, amended or repealed by the Directors or
by the stockholders, provided that the Bylaws shall not be altered,
amended or repealed, and no provision inconsistent therewith or in
limitation thereof shall be adopted, by the stockholders without the
affirmative vote of the holders of at least 80% of the voting power of all
shares of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class.
TENTH: No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for
breach of fiduciary duty as a
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director or officer involving any act or omission of any such director or
officer occurring on or after April 28, 1987; provided, however, that the
foregoing provision shall not eliminate or limit the liability of a
director or officer (i) for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law, or (ii) the payment of
dividends in violation of Section 78.300 of the Nevada Revised Statutes.
Any repeal or modification of this Article by the stockholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the
Corporation for acts or omissions prior to such repeal or modification.
ELEVENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in these Articles of Incorporation in
the manner now or hereafter prescribed by these Articles of Incorporation
or by law, and all rights conferred upon stockholders herein are granted
subject to this reservation.
2. Upon the effectiveness of the above described amendment and
restatement of the Articles of Incorporation of the Corporation, each share of
Class A Common Stock, par value $1.00 per share ("Class A Common Stock") of the
Corporation, and any shares of Class B Common Stock, par value $1.00 per share
("Class B Common Stock") of the Corporation, that shall be issued and
outstanding at the effective date of said amendment and restatement, and all
rights in respect thereof, shall be redesignated and reclassified as a share of
Common Stock.
Until surrendered for new certificates representing shares of Common
Stock, the outstanding certificates representing Class A Common Stock and any
outstanding certificates representing Class B Common Stock may be treated by the
Corporation for all corporate purposes as evidencing a like number of shares of
Common Stock.
3. The aforementioned amendment and restatement to the Corporation's
Articles of Incorporation was adopted by the Corporation's Board of Directors at
a meeting duly called and held on February 9, 1988 in accordance with the
provisions of NRS 78.315 and NRS 78.390.
4. Thereafter pursuant to resolutions of the Board of Directors of the
Corporation, the foregoing amendment and restatement was submitted to the
shareholders of the Corporation at the annual meeting of shareholders held on
April 27, 1988, and the shareholders approved and adopted said amendment and
restatement pursuant to NRS 78.390 with 44,876,234 shares of Class A Common
Stock voting for the amendment and restatement and 455,058 shares of Class A
Common Stock voting against the proposed amendment and restatement, no shares of
Class B Common Stock being at the time outstanding.
-11-
IN WITNESS WHEREOF, Battle Mountain Gold Company has caused these
Restated Articles of Incorporation to be executed in its name by its President
and its Secretary, and its corporate seal to be affixed hereto, this 9th day of
May, 1988.
BATTLE MOUNTAIN GOLD COMPANY
By: /s/ DOUGLAS J. BOURNE
Douglas J. Bourne
Chairman of the Board
and Chief Executive
Officer
By: /s/ JAMES A. BROOKS
James A. Brooks
Assistant Secretary
-12-
STATE OF TEXAS |
|
COUNTY OF HARRIS |
Before me, a Notary Public, on this day personally appeared Douglas
J. Bourne and James A. Brooks, known by me to be the Chairman of the Board and
Chief Executive Officer and Assistant Secretary, respectively, of Battle
Mountain Gold Company and to be the persons whose names are subscribed to the
foregoing document, and, being by me first duly sworn, each declared that the
statements therein contained are true and correct, and acknowledged that he
executed the above instrument.
Given under my hand and seal of office this 9th day of May, 1988.
/s/ DEBORAH S. WHEELER
Notary Public in and for
the State of Texas
DEBORAH S. WHEELER
Notary Public, State of Texas
Commission Expires 7-1-89
-13-
EXHIBIT 4(a)(2)
CERTIFICATE OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
BATTLE MOUNTAIN GOLD COMPANY
Battle Mountain Gold Company, a corporation organized under the laws
of the State of Nevada (the "Corporation"), by its Vice President-Finance and
Secretary, does hereby certify:
FIRST: Article FOURTH of the Restated Articles of Incorporation of
the Corporation shall be amended to read in its entirety as follows:
FOURTH: The amount of the total authorized capital stock of the
Corporation, and the number and par value of the shares of which it is to
consist, is 550,000,001 shares, amounting in the aggregate to One Hundred
Million Dollars and ten cents ($100,000,000.10), divided into classes as
follows:
50,000,000 shares shall be Preferred Stock, $1.00 par value
("Preferred Stock");
500,000,000 shares shall be Common Stock, $0.10 par value ("Common
Stock"); and
One share shall be Special Voting Stock, $0.10 par value ("Special
Voting Stock").
Shares of any class of stock of the Corporation may be issued for such
consideration and for such corporate purposes as the Board of Directors
may from time to time determine. The capital stock, after the amount of
the subscription price (which shall not be less than the par value) has
been paid in, shall not be subject to assessment.
The following is a description of the different classes and a
statement of the relative rights of the holders of the Preferred Stock, the
Common Stock and the Special Voting Stock.
SECTION I. PREFERRED STOCK
The Board of Directors of the Corporation is authorized at any time and
from time to time to provide for the issuance of shares of Preferred Stock of
the Corporation in one or more series with such voting powers, full or limited,
or without voting powers, and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof as are stated and expressed in these Articles of
Incorporation, and, to the extent not so stated or expressed, as may be stated
and expressed in a resolution or resolutions establishing such series and
providing for the issuance thereof adopted by the Board of Directors pursuant to
the authority so to do which is hereby expressly vested in it including, without
limiting the generality of the foregoing, the following:
1
(1) the designation and number of shares of each such series;
(2) the dividend rate of each such series, the conditions and dates upon
which such dividends shall be payable, the preference or relation of
such dividends to dividends payable on any other class or classes of
capital stock of the Corporation, and whether such dividends shall
be cumulative or noncumulative;
(3) whether the shares of each such series shall be subject to
redemption by the Corporation, and, if made subject to such
redemption, the times, prices, rates, adjustments and other terms
and conditions of such redemption;
(4) the terms and amount of any sinking or similar fund provided for the
purchase or redemption of the shares of each such series;
(5) whether the shares of each such series shall be convertible into or
exchangeable for shares of capital stock or other securities of the
Corporation or of any other corporation, and, if provision be made
for conversion or exchange, the times, prices, rates, adjustments
and other terms and conditions of such conversion or exchange;
(6) the extent, if any, to which the holders of the shares of any series
shall be entitled to vote as a class or otherwise with respect to
the election of directors or otherwise;
(7) the restrictions and conditions, if any, upon the issue or reissue
of any additional Preferred Stock ranking on a parity with or prior
to such shares as to dividends or upon dissolution;
(8) the rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of assets of, the
Corporation, which rights may be different in the case of voluntary
dissolution than the case of involuntary dissolution; and
(9) any other relative rights, preferences or limitations of shares of
such series consistent with this Article FOURTH and applicable law.
The powers, preferences and relative, participating, optional and other
special rights of each series of Preferred Stock of the Corporation, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding. All shares of any one
series of Preferred Stock of the Corporation shall be identical in all respects
with all other shares of such series, except that shares of any one series
issued at different times may differ as to the dates from which dividends
thereon shall be cumulative. Except as may otherwise be required by law or these
Articles of Incorporation, the terms of any series of Preferred Stock may be
amended without consent of the holders of any other series of Preferred Stock or
of any class of Common Stock of the Corporation.
2
SECTION II. COMMON STOCK AND SPECIAL VOTING STOCK
1. VOTING RIGHTS.
(a) Each share of Common Stock shall entitle the holder thereof to one
vote for each share held and the holder of the share of Special Voting Stock
shall have a number of votes equal to the number of Exchangeable Shares
("Exchangeable Shares") of Hemlo Gold Mines Inc. (to be renamed Battle Mountain
Canada Ltd.), an Ontario corporation, from time to time which are not owned by
the Corporation or any of its direct or indirect subsidiaries that, under
Section 78.283 of the Nevada Revised Statutes or any successor provision
thereto, cannot vote shares of Common Stock held by it (an "Article 4
Subsidiary"). Except as otherwise required by law or these Articles of
Incorporation, the Common Stock and the Special Voting Stock shall vote together
as a single class in the election of directors and on all matters submitted to a
vote of stockholders of the Corporation.
(b) No holder of Common Stock or Special Voting Stock shall have the right
to cumulate votes in the election of Directors of the Corporation or for any
other purpose.
2. DIVIDENDS. Subject to the rights of holders of Preferred Stock of the
Corporation, the holders of Common Stock shall be entitled to share ratably, on
a share for share basis, in any and all dividends, payable in cash or otherwise,
as may be declared in respect of their holdings by the Board of Directors from
time to time out of assets or funds of the Corporation legally available
therefor, and the holders of Special Voting Stock shall not be entitled to
receive any such dividends.
3. PROVISIONS REGARDING SPECIAL VOTING STOCK.
(a) Pursuant to the terms of that certain Combination Agreement, dated as
of March 11, 1996, by and among the Corporation and Hemlo Gold Mines Inc. one
share of Special Voting Stock is being issued to the trustee (the "Trustee")
under the Voting, Support and Exchange Trust Agreement, dated as of July 19,
1996 by and between the Corporation, Hemlo Gold Mines Inc. and the Trustee.
(b) The holder of the share of Special Voting Stock is entitled to
exercise the voting rights attendant thereto in such manner as such holder
desires.
(c) At such time as the Special Voting Stock has no votes attached to it
because there are no Exchangeable Shares of Hemlo Gold Mines Inc. outstanding
which are not owned by the Corporation or an Article 4 Subsidiary and there are
no shares of stock, debt, options or other agreements of Hemlo Gold Mines Inc.
which could give rise to the issuance of any Exchangeable Shares of Hemlo Gold
Mines Inc. to any person (other than the Corporation or an Article 4
Subsidiary), the Special Voting Stock shall be cancelled.
3
SECTION III. PROVISIONS APPLICABLE TO ALL CLASSES
1. LIQUIDATION RIGHTS. In the event of any dissolution, liquidation or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
after payment or provision for payment of the debts and other liabilities of the
Corporation, the holders of each series of Preferred Stock shall be entitled to
receive, out of the net assets of the Corporation, an amount for each share
equal to the amount fixed and determined in accordance with the respective
rights and priorities established by the Board of Directors in any resolution or
resolutions providing for the issuance of any particular series of Preferred
Stock before any of the assets of the Corporation shall be distributed or paid
over to holders of Common Stock. After payment in full of said amounts to the
holders of Preferred Stock of all series, holders of Common Stock shall be
entitled to share ratably in the remaining net assets of the Corporation, such
that an equal amount of net assets shall be allocated to each share of Common
Stock, and the holders of Special Voting Stock shall not be entitled to receive
any such assets. A merger or consolidation of the Corporation with or into any
other corporation or a sale or conveyance of all or any part of the assets of
the Corporation (which shall not in fact result in the liquidation of the
Corporation and the distribution of assets to stockholders) shall not be deemed
to be a voluntary or involuntary liquidation or dissolution or winding up of the
Corporation within the meaning of this paragraph 1.
2. PREEMPTIVE RIGHTS. No stockholder of the Corporation shall, by reason
of his holding any shares of any class of the Corporation, have any preemptive
or preferential right to acquire or subscribe for any treasury or unissued
shares of any class of the Corporation now or hereafter to be authorized, or any
notes, debentures, bonds, or other securities convertible into or carrying any
right, option or warrant to subscribe for or acquire shares of any class of the
Corporation now or hereafter to be authorized, whether or not the issuance of
any such shares, or such notes, debentures, bonds or other securities, would
adversely affect the dividends or voting rights of such stockholder, and the
Board of Directors of the Corporation may issue shares of any class of this
Corporation, or any notes, debentures, bonds or other securities convertible
into or carrying rights, options or warrants to subscribe for or acquire shares
of any class of the Corporation, without offering any such shares of any class
of the Corporation, either in whole or in part, to the existing stockholders of
any class of the Corporation.
SECOND: The aforementioned amendment to the Restated Articles of
Incorporation of the Corporation has been adopted by the Corporation's Board of
Directors in accordance with the provisions of NRS 78.390.
THIRD: Thereafter pursuant to resolutions of the Board of Directors of the
Corporation, the aforementioned amendment was submitted to the stockholders of
the Corporation at the annual meeting of stockholders held on July 15, 1996, and
the stockholders approved and adopted such amendment pursuant to NRS 78.390 with
42,393,023 shares of the Corporation's Common Stock, $0.10 par value (the
"Common Stock"), voting for the amendment and 6,668,623 shares of Common Stock
voting against the amendment, out of 81,335,448 shares of Common Stock (the only
class of stock entitled to vote on the amendment) outstanding.
4
IN WITNESS WHEREOF, Battle Mountain Gold Company has caused this
Certificate of Amendment to be executed in its name by its Vice
President-Finance and its Secretary, and its corporate seal to be affixed hereto
this 17th day of July, 1996.
BATTLE MOUNTAIN GOLD COMPANY
[SEAL]
By: /s/ R. DENNIS O'CONNELL
R. Dennis O'Connell
Vice President-Finance
By: /s/ ROBERT J. QUINN
Robert J. Quinn
Secretary
5
STATE OF TEXAS |
|
COUNTY OF HARRIS |
Before me, a Notary Public, on this day personally appeared R. Dennis
O'Connell and Robert J. Quinn, known by me to be the Vice President-Finance and
Secretary, respectively, of Battle Mountain Gold Company and to be the persons
whose names are subscribed to the foregoing document, and, being by me first
duly sworn, each declared that the statements therein contained are true and
correct.
Given under my hand and seal of office this 17th day of July, 1996
/s/ DONNA M. COOPER
Notary Public in and for
the State of Texas
6
EXHIBIT 4(b)
CERTIFICATE OF RESOLUTION ESTABLISHING DESIGNATION,
PREFERENCES AND RIGHTS OF
$3.25 CONVERTIBLE PREFERRED STOCK
of
BATTLE MOUNTAIN GOLD COMPANY
Pursuant to Section 78.195 of the Nevada Revised Statutes
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation by the Restated Articles of Incorporation of the
Corporation, a series of Convertible Preferred Stock, par value $1.00 per share,
of the Corporation, be and hereby is created, and that the number of shares
thereof and the voting powers, designations, preferences, limitations,
restrictions, relative rights and distinguishing designation of the shares of
such series are as follows:
Section 1. DESIGNATION AND AMOUNT. The designation of such series of
Preferred Stock authorized by this resolution shall be the $3.25 Convertible
Preferred Stock (herein the "Convertible Preferred Stock"). The number of shares
of Convertible Preferred Stock shall be 2,300,000.
Section 2. RANK. All shares of Convertible Preferred Stock shall
rank prior, both as to payment of dividends and as to distributions of assets
upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, to all of the Corporation's now or hereafter issued
Common Stock. The term "Common Stock" shall mean the Common Stock, $.10 par
value per share, of the Corporation as the same exists at the date hereof or as
such stock may be constituted from time to time.
Section 3. DIVIDENDS. The holders of Convertible Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds at the time legally available therefor, dividends at the rate of
$3.25 per annum per share, and no more, which shall be fully cumulative, shall
accrue without interest from the date of first issuance and shall be payable in
cash quarterly in arrears on February 15, May 15, August 15 and November 15 of
each year commencing August 15, 1993 (except that if any such date is a
Saturday, Sunday or legal holiday, then such dividend shall be payable on the
next succeeding day that is not a Saturday, Sunday or legal holiday) to holders
of record as they appear on the stock transfer books of the Corporation on such
record dates, not more than 60 nor less than 10 days preceding the payment dates
for such dividends, as are fixed by the Board of Directors. For purposes hereof,
the term "legal holiday" shall mean any day on which banking institutions are
authorized to close in New York, New York or in Houston,Texas. Subject to the
next paragraph of this Section 3, dividends
- 1 -
on account of arrears for any past dividend period may be declared and paid at
any time, without reference to any regular dividend payment date. The amount of
dividends payable per share of Convertible Preferred Stock for each quarterly
dividend period shall be computed by dividing the annual amount by four. The
amount of dividends payable for the initial dividend period and any period
shorter than a full quarterly dividend period shall be computed on the basis of
a 360-day year of twelve 30-day months. Holders of Convertible Preferred Stock
shall not be entitled to any dividend, whether payable in cash, property or
stock, in excess of the full cumulative dividends on such shares of Cumulative
Preferred Stock.
On each dividend payment date all dividends which shall have accrued
on each share of Convertible Preferred Stock outstanding on such dividend
payment date shall accumulate and be deemed to become "due" whether or not there
shall be funds legally available for the payment thereof. Any dividend which
shall not be paid on the dividend payment date on which it shall become due
shall be deemed to be "past due" until such dividend shall be paid or until the
share of Convertible Preferred Stock with respect to which such dividend became
due shall no longer be outstanding, whichever is the earlier to occur. No
interest, sum of money in lieu of interest, or other property or securities
shall be payable in respect of any dividend payment or payments which are past
due. Dividends paid on shares of Convertible Preferred Stock in an amount less
than the total amount of such dividends at the time accumulated and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding.
No dividends or other distributions, other than dividends payable
solely in shares of Common Stock or other capital stock of the Corporation
ranking junior as to dividends and as to liquidation rights to the Convertible
Preferred Stock which is neither convertible into, nor exchangeable or
exercisable for, any securities of the Corporation other than Common Stock or
other capital stock of the Corporation ranking junior as to dividends and as to
liquidation rights to the Convertible Preferred Stock, shall be paid, or
declared and set apart for payment, and no purchase, redemption or other
acquisition shall be made by the Corporation of, any shares of Common Stock or
other capital stock of the Corporation ranking junior as to dividends or as to
liquidation rights to the Convertible Preferred Stock (the "Junior Dividend
Stock") unless and until all accrued and unpaid dividends on the Convertible
Preferred Stock, including the full dividend for the then current dividend
period, shall have been paid or declared and set apart for payment and the
Corporation is not in default in respect of the optional redemption of any
shares of Convertible Preferred Stock.
No full dividends shall be paid or declared and set apart for
payment on any class or series of the Corporation's capital stock ranking, as to
dividends, on a parity with the Convertible Preferred Stock (the "Parity
Dividend Stock") for any period unless full cumulative dividends have been, or
contemporaneously are, paid or declared and set apart for such payment on the
Convertible Preferred Stock for all dividend payment periods terminating on or
prior to the date of payment of such full cumulative dividends. No full
dividends shall be paid or declared and set apart for payment on the Convertible
Preferred Stock for any period unless full cumulative
- 2 -
dividends have been, or contemporaneously are, paid or declared and set apart
for payment on the Parity Dividend Stock for all dividend periods terminating on
or prior to the date of payment of such full cumulative dividends. When
dividends are not paid in full upon the Convertible Preferred Stock and the
Parity Dividend Stock, all dividends paid or declared and set aside for payment
upon shares of Convertible Preferred Stock and the Parity Dividend Stock shall
be paid or declared and set aside for payment pro rata so that the amount of
dividends paid or declared and set aside for payment per share on the
Convertible Preferred Stock and the Parity Dividend Stock shall in all cases
bear to each other the same ratio that accrued and unpaid dividends per share on
the shares of Convertible Preferred Stock and the Parity Dividend Stock bear to
each other.
The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under this Section 3, purchase or
otherwise acquire such shares at such time and in such manner.
Any reference to "distribution" contained in this Section 3 shall
not be deemed to include any distribution made in connection with any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary.
Section 4. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of Convertible Preferred Stock shall be entitled to receive out of
the assets of the Corporation, whether such assets are stated capital or surplus
of any nature, an amount equal to the dividends accrued and unpaid thereon to
the date of final distribution to such holders, whether or not declared, without
interest, and a sum equal to $50.00 per share, and no more, before any payment
shall be made or any assets distributed to the holders of Common Stock or any
other class or series of the Corporation's capital stock ranking junior as to
liquidation rights to the Convertible Preferred Stock (the "Junior Liquidation
Stock"). In the event the assets of the Corporation available for distribution
to stockholders upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, shall be insufficient to pay in
full the amounts payable with respect to the Convertible Preferred Stock and any
other class or series of the Corporation's capital stock which may hereafter be
created having parity as to liquidation rights with the Convertible Preferred
Stock (the "Parity Liquidation Stock"), the holders of the Convertible Preferred
Stock and the holders of the Parity Liquidation Stock shall share ratably in any
distribution of assets of the Corporation in proportion to the full respective
preferential amounts to which they are entitled (but only to the extent of such
preferential amounts). After payment in full of the liquidation preferences of
the shares of Convertible Preferred Stock, the holders of such shares shall not
be entitled to any further participation in any distribution of assets by the
Corporation. Neither a consolidation, merger or other business combination of
the Corporation with or into another corporation or other entity nor a sale or
transfer of all or part of the Corporation's assets for cash, securities or
other property shall be considered a liquidation,
- 3 -
dissolution or winding up of the Corporation for purposes of this Section 4
(unless in connection therewith the liquidation of the Corporation is
specifically approved).
The holder of any shares of Convertible Preferred Stock shall not be
entitled to receive any payment owed for such shares under this Section 4 until
such holder shall cause to be delivered to the Corporation (i) the
certificate(s) representing such shares of Convertible Preferred Stock and (ii)
transfer instrument(s) satisfactory to the Corporation and sufficient to
transfer such shares of Convertible Preferred Stock to the Corporation free of
any adverse interest. As in the case of the Redemption Price referred to below,
no interest shall accrue on any payment upon liquidation after the due date
thereof.
Section 5. REDEMPTION AT OPTION OF THE CORPORATION. The Corporation
may not redeem the Convertible Preferred Stock prior to May 15, 1996. The
Corporation, at its option, may at any time on and after May 15, 1996 redeem for
shares of Common Stock the Convertible Preferred Stock, in whole or from time to
time in part, on any date set by the Board of Directors, at the following
redemption prices if redeemed during the twelve-month period beginning May 15 of
the year specified below:
YEAR PRICE PER SHARE
---- ---------------
1996 $52.275
1997 $51.950
1998 $51.625
1999 $51.300
2000 $50.975
2001 $50.650
2002 $50.325
and thereafter at $50.00 per share, plus, in each case, an amount equal to all
dividends on the Convertible Preferred Stock accrued and unpaid thereon, whether
or not declared or due, to the date fixed for redemption, such sum being
hereinafter referred to as the "Redemption Price" (subject to the right of the
holder of record of shares of Convertible Preferred Stock on a record date for
the payment of a dividend on the Convertible Preferred Stock to receive the
dividend due on such shares of Convertible Preferred Stock on the corresponding
dividend payment date). At no time shall the Convertible Preferred Stock be
redeemable for cash.
The Corporation shall issue in payment of the Redemption Price for
each share of Convertible Preferred Stock to be redeemed such number of shares
of Common Stock as equals (x) the then-current Redemption Price of the
Convertible Preferred Stock, divided by (y) the market price (the "Market
Price") of the Common Stock. The Market Price shall be equal to the lower of (i)
the average of the daily closing prices of the Common Stock for the 20
consecutive trading days immediately preceding the first business day
immediately preceding the date of the
- 4 -
applicable redemption notice, or (ii) the closing price of the Common Stock on
the trading day immediately preceding the first business day immediately
preceding the date of the applicable redemption notice. The "closing price" for
each day shall be the last reported sales price regular way or, in case no such
reported sales takes place on such day, the average of the closing bid and asked
prices regular way for such day, in each case on the New York Stock Exchange
Composite Tape or, if not listed on the New York Stock Exchange, on the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if not listed or admitted to trading on a
national securities exchange, the last sale price regular way for the Common
Stock as published by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if such last sale price is not so published by
NASDAQ or if no such sale takes place on such day, the mean between the closing
bid and asked prices for the Common Stock as published by NASDAQ. If the shares
of Common Stock are not listed or admitted to trading on a national securities
exchange or quoted by NASDAQ, the determination of Market Price shall be
determined in good faith by the Board of Directors of the Corporation or, if
such determination cannot be made, by a nationally recognized independent
investment banking firm selected in good faith by the Board of Directors of the
Corporation. For the purposes of this Section 5, trading day shall mean a day on
which the securities exchange specified for purposes of this Section 5 shall be
open for business or, if the shares of Common Stock shall not be listed on such
exchange for such period, a day with respect to which quotations of the
character referred to in the next preceding sentence shall be reported. In lieu
of any fractional share of Common Stock which would otherwise be issued upon any
redemption of Convertible Preferred Stock, the Corporation shall pay a cash
adjustment in respect of such fractional interest in an amount in cash (computed
to the nearest cent) equal to the Market Price multiplied by the fractional
interest that otherwise would have been deliverable upon such redemption of such
Convertible Preferred Stock.
In case of the redemption of less than all of the then outstanding
Convertible Preferred Stock, the shares of Convertible Preferred Stock to be
redeemed shall be redeemed pro rata or by lot or in such other manner as the
Board of Directors may determine. Notwithstanding the foregoing, the Corporation
shall not redeem less than all of the Convertible Preferred Stock at any time
outstanding until all dividends accrued and in arrears upon all Convertible
Preferred Stock then outstanding shall have been paid for all past dividend
periods.
Not more than 60 nor less than 30 days prior to the redemption date,
notice by first class mail, postage prepaid, shall be given to each holder of
record of the Convertible Preferred Stock to be redeemed, at such holder's
address as it shall appear upon the stock transfer books of the Corporation.
Each such notice of redemption shall specify the date fixed for redemption, the
Redemption Price, the place or places of payment, that payment will be made upon
presentation and surrender of the certificate(s) evidencing the shares of
Convertible Preferred Stock to be redeemed, that on and after the redemption
date, dividends will cease to accrue on such shares, the then effective
conversion price pursuant to Section 6 and that the right of holders to convert
shall terminate at the close of business on the redemption date (unless the
Corporation defaults in the payment of the Redemption Price).
- 5 -
Any notice that is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of the Convertible
Preferred Stock receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Convertible Preferred Stock. On or after the date fixed
for redemption as stated in such notice, each holder of the shares called for
redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the Redemption Price as herein provided. If less
than all the shares represented by any such surrendered certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares.
If, on the date fixed for redemption, shares of Common Stock and funds necessary
for the redemption shall be available therefor and shall have been irrecoverably
deposited or set aside, then, notwithstanding that the certificates evidencing
any shares so called for redemption shall not have been surrendered the
dividends with respect to the shares so called shall cease to accrue after the
date fixed for redemption, the shares shall no longer be deemed outstanding, the
holders thereof shall cease to be holders of Convertible Preferred Stock, and
all rights whatsoever with respect to the shares so called for redemption
(except the right of the holders to receive payment of the Redemption Price as
herein provided without interest upon surrender of their certificates therefor)
shall terminate. At the close of business on the redemption date, each holder of
Convertible Preferred Stock so redeemed (unless the Corporation defaults on its
obligations to delivery shares of Common Stock or cash) shall be, without any
further action, deemed a holder of the number of shares of Common Stock for
which such Convertible Preferred Stock is redeemable.
The shares of Convertible Preferred Stock shall not be subject to
the operation of any purchase, retirement, mandatory redemption or sinking fund.
The holder of any shares of Convertible Preferred Stock redeemed
upon any exercise of the Corporation's redemption right shall not be entitled to
receive payment of the Redemption Price for such shares until such holder shall
cause to be delivered to the place specified in the notice given with respect to
such redemption (i) the certificate(s) representing such shares of Convertible
Preferred Stock redeemed and (ii) transfer instrument(s) satisfactory to the
Corporation and sufficient to transfer such shares of Convertible Preferred
Stock to the Corporation free of any adverse interest. No interest shall accrue
on the Redemption Price of any share of Convertible Preferred Stock after its
redemption date.
All shares of Common Stock which may be delivered upon redemption of
the Convertible Preferred Stock will upon delivery be duly and validly issued
and fully paid and non-assessable, free of all liens and charges and not subject
to any preemptive rights,a nd prior to giving any notice of redemption the
Corporation shall take any corporate action necessary therefor.
In the event that any shares of Convertible Preferred Stock shall be
converted into Common Stock pursuant to Section 6, then (i) the Corporation
shall not have the right to redeem
- 6 -
such shares and (ii) shares of Common Stock and any funds which shall have been
deposited for the payment of the Redemption Price for such shares of Convertible
Preferred Stock shall be returned to the Corporation immediately after such
conversion (subject to declared dividends payable to holders of shares of
Convertible Preferred Stock on the record date for such dividends being so
payable, to the extent set forth in Section 6 hereof, regardless of whether such
shares are converted subsequent to such record date and prior to the related
dividend payment date).
Section 6. CONVERSION PRIVILEGE.
(a) RIGHT OF CONVERSION. Subject to and upon compliance with the
provisions of this Section 6, each share of Convertible Preferred Stock shall,
at the option of the holder thereof, be convertible at any time (unless such
share is called for redemption, then to and including but not after the close of
business on the date fixed for such redemption, unless the Corporation shall
default in payment due upon redemption thereof), into that number of fully paid
and non-assessable shares of Common Stock (calculated as to each conversion to
the nearest 1/100th of a share) obtained by dividing $50.00 by the Conversion
Price (as defined in Section 6(d)) in effect at such time and by surrender of
such share so to be converted in the manner provided in Section 6(b).
(b) MANNER OF EXERCISE OF CONVERSION PRIVILEGE. In order to exercise
the conversion privilege, the holder of one or more shares of Convertible
Preferred Stock to be converted shall surrender such shares at any of the
offices or agencies to be maintained for such purpose by the Corporation
accompanied by the funds, if any, required by the last paragraph of this Section
6(b) and shall give written notice of conversion in the form provided on such
shares of Convertible Preferred Stock (or such other notice as is acceptable to
the Corporation) to the Corporation at such office or agency that the holder
elects to convert the shares of Convertible Preferred Stock specified in said
notice. Such notice shall also state the name or names, together with address or
addresses, in which the certificate or certificates for shares of Common Stock
which shall be issuable in such conversion shall be issued. Each share of
Convertible Preferred Stock surrendered for conversion shall, unless the shares
issuable on conversion are to be issued in the same name as the name in which
such share is registered, be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or his duly
authorized attorney and an amount sufficient to pay any transfer or similar tax.
As promptly as practicable after the surrender of such shares of Convertible
Preferred Stock and the receipt of such notice, instruments of transfer and
funds, if any, as aforesaid, the Corporation shall issue and shall deliver at
such office or agency to such holder, or on his written order, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such share of Convertible Preferred Stock in accordance with the
provisions of this Section 6 and a check or cash in respect of any fractional
interest in a share of Common Stock arising upon such conversion, as provided in
Section 6(c).
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which such shares of Convertible
Preferred Stock shall have been
- 7 -
surrendered and such notice (and any applicable instruments of transfer and any
required taxes) received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby at such
time on such date, and such conversion shall be at the Conversion Price in
effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such person or persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are open,
but such conversion shall be at the Conversion Price in effect on the date upon
which such shares of Convertible Preferred Stock shall have been surrendered and
such notice received by the Corporation.
Any shares of Convertible Preferred Stock surrendered for conversion
during the period from the close of business on the record date for any dividend
payment to the opening of business on the related dividend payment date shall
(unless such shares of Convertible Preferred Stock shall have been called for
redemption on a date in such period) be accompanied by payment, in funds
acceptable to the Corporation, of an amount equal to the dividend otherwise
payable on such dividend payment date; PROVIDED, HOWEVER, that no such payment
need by made if there shall exist at the time of conversion a default in the
payment of dividends on the shares of Convertible Preferred Stocks. An amount
equal to such payment shall be paid by the Corporation on such dividend payment
date to the holder of such shares of Convertible Preferred Stock at the close of
business on such record date; PROVIDED, HOWEVER, that if the Corporation shall
default in the payment of dividends on such dividend payment date, such amount
shall be paid to the person who made such required payment. Except as provided
for above in this Section, no adjustment shall be made for dividends accrued on
any shares of Convertible Preferred Stock converted or for dividends on any
shares issued upon the conversion of such shares as provided in this Section.
(c) CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares
or scrip representing fractions of shares of Common Stock shall be issued upon
conversion of Convertible Preferred Stock. If more than one share of Convertible
Preferred Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate of $50.00 for each such
share so surrendered. In lieu of any fractional interest in a share of Common
Stock which would otherwise be deliverable upon the conversion of any share of
Convertible Preferred Stock, the Corporation shall pay to the holder of such
shares an amount in cash (computed to the nearest cent) equal to the closing
price (as defined in Section 5 hereof) on the business day next preceding the
day of conversion multiplied by the fractional interest that otherwise would
have been deliverable upon conversion of such share.
(d) ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall mean
and be $10.50, subject to adjustment from time to time by the Corporation as
follows:
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(i) In case the Corporation shall (A) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (B) subdivide
its outstanding shares of Common Stock into a greater number of shares,
(C) combine its outstanding shares of Common Stock into a smaller number
of shares, or (D) issue by reclassification of its Common Stock any shares
of capital stock of the Corporation, then in each such case the Conversion
Price in effect immediately prior to such action shall be adjusted so that
the holder of any share of Convertible Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock or other capital stock of the Corporation which he
would have owned or been entitled to receive immediately following such
action had such share been converted immediately prior to the occurrence
of such event. An adjustment made pursuant to this subsection (i) shall
become effective immediately after the record date, in the case of a
dividend or distribution, or immediately after the effective date, in the
case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this subsection (i), the holder of any
share of Convertible Preferred Stock thereafter surrendered for conversion
shall become entitled to receive shares of two or more classes of capital
stock or shares of Common Stock and other capital stock of the
Corporation, the Board of Directors (whose determination shall be
conclusive and shall be described in a statement filed by the Corporation
with the stock transfer or conversion agent, as appropriate) shall
determine the allocation of the adjusted Conversion Price between or among
shares of such classes of capital stock or shares of Common Stock and
other capital stock.
(ii) In case the Corporation shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase shares of Common Stock at a price per share less
than the current market price per share (as determined pursuant to
subsection (iv) of this Section 6(d)) of the Common Stock (other than
pursuant to any stock option, restricted stock or other incentive or
benefit plan or stock ownership or purchase plan for the benefit of
employees, directors or officers or any dividend reinvestment plan of the
Corporation in effect at the time hereof or any other similar plan adopted
or implemented hereafter), then the Conversion Price in effect immediately
prior thereto shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the date of issuance of such rights or warrants by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants (immediately prior to such
issuance) plus the number of shares which the aggregate offering price of
the total number of shares so offered would purchase at such current
market price, and of which the denominator shall be the numbers of shares
of Common Stock outstanding on the date of issuance of such rights or
warrants (immediately prior to such issuance) plus the number of
additional shares of Common Stock offered for subscription or purchase.
Such adjustment shall be made successively whenever any rights or warrants
are issued, and shall become effective immediately after the record date
for the determination of stockholders entitled to receive such rights or
warrants; PROVIDED, HOWEVER, in the event
- 9 -
that all the shares of Common Stock offered for subscription or purchase
are not delivered upon the exercise of such rights or warrants, upon the
expiration of such rights or warrants the Conversion Price shall be
readjusted to the Conversion Price which would have been in effect had the
numerator and the denominator of the foregoing fraction and the resulting
adjustment been made based upon the number of shares of Common Stock
actually delivered upon the exercise of such rights or warrants rather
than upon the number of shares of Common Stock offered for subscription or
purchase. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than
such current market price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Corporation for such rights or warrants, the
value of such consideration, if other than cash, to be determined by the
Board of Directors (whose determination shall be conclusive and shall be
described in a statement filed by the Corporation with the stock transfer
or conversion agent, as appropriate). Notwithstanding the foregoing, any
adjustments to the Conversion Price with respect to the preferred stock
purchase rights (the "Rights") of the Corporation associated with the
shares of Common Stock, which Rights are governed by a Rights Agreement
dated as of November 10, 1988, as amended (the "Rights Agreement"), or
similar rights or warrants adopted or issued subsequent to the date hereof
shall be made when such Rights or similar rights or warrants are
exercised. If after the Distribution Date (as defined in the Rights
Agreement or a similar date defined in a similar agreement), holders
converting shares of Convertible Preferred Stock are not entitled to
receive the Rights or similar rights or warrants which would otherwise be
attributable (but for the date of conversion) to the shares of Common
Stock received upon such conversion, then adjustment to the Conversion
Price shall be made under this subsection (ii) as if the Rights or similar
rights or warrants were then issued to holders of Common Stock. If such an
adjustment is made and the Rights or similar rights or warrants are later
redeemed, invalidated or terminated, then a corresponding reversing
adjustment shall be made to the Conversion Price, on an equitable basis,
to take account of such event. However, the Corporation may elect to
provide that such shares of Common Stock issuable upon conversion of the
Convertible Preferred Stock, whether or not issued after the Distribution
Date for such Rights or such similar date for such similar rights or
warrants, will be accompanied by the Rights or such similar rights or
warrants which would otherwise be attributable (but for the date of
conversion) to such shares of Common Stock, in which event the preceding
two sentences shall not apply.
(iii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its outstanding Common Stock or capital stock
(other than Common Stock), evidences of its indebtedness or assets
(including securities and cash, but excluding any regular periodic cash
dividend of the Corporation and dividends or distributions payable in
stock for which adjustment is made pursuant to subsection (i) of this
Section 6(d)) or rights or warrants to subscribe for or purchase
securities of the Corporation (excluding those referred to in subsection
(ii) of this Section 6(d)), then in each such case the Conversion Price
shall be adjusted so that the same shall equal the price determined by
- 10 -
multiplying the Conversion Price in effect immediately prior to the record
date of such distribution by a fraction of which the numerator shall be
the current market price per share as determined pursuant to subsection
(iv) of this Section 6(d) of the Common Stock less the fair market value
on such record date (as determined by the Board of Directors, whose
determination shall be conclusive and shall be described in a statement
filed by the Corporation with the stock transfer or conversion agent, as
appropriate) of the portion of the capital stock or assets or the
evidences of indebtedness or assets so distributed to the holder of one
share of Common Stock or of such subscription rights or warrants
applicable to one share of Common Stock, and of which the denominator
shall be such current market price per share of Common Stock. Such
adjustment shall become effective immediately after the record date for
the determination of stockholders entitled to receive such distribution.
(iv) For the purpose of any computation under subsections (ii) and
(iii) of this Section 6(d), the current market price per share of Common
Stock on any date shall be deemed to be the average of the closing price
(as defined in Section 5) for the shorter of (A) 30 consecutive trading
days (as defined in Section 5) ending on the last full trading day prior
to the Time of Determination or (B) the period commencing on the date next
succeeding the first public announcement of the issuance of such rights or
warrants or such distribution through such last full trading day prior to
the Time of Determination. For purposes of the foregoing, the term "Time
of Determination" shall mean the time and date of the earlier of (I) the
record date for determining stockholders entitled to receive the rights,
warrants or distributions referred to in Section 6(d)(ii) and (iii) or
(II) the commencement of "ex-dividend" trading on the exchange or market
referred to in the definition of "closing price."
(v) In any case in which this Section 6(d) shall require that an
adjustment be made immediately following a record date or an effective
date, the Corporation may elect to defer (but only until the filing by the
Corporation with the stock transfer or conversion agent, as the case may
be, of the certificate required by subsection (vii) of this Section 6(d))
issuing to the holder of any share of Convertible Preferred Stock
converted after such record date or effective date the shares of Common
Stock issuable upon such conversion over and above the shares of Common
Stock issuable upon such conversion on the basis of the Conversion Price
prior to adjustment, and paying to such holder any amount of cash in lieu
of a fractional share.
(vi) No adjustment in the Conversion Price shall be required to be
made unless such adjustment would require an increase or decrease of at
least 1% of such price; PROVIDED, HOWEVER, that any adjustments which by
reason of this subsection (vi) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 6(d) shall be made to the nearest cent or
to the nearest 1/1000th of a share, as the case may be. Anything in this
Section 6(d) to the contrary notwithstanding, the Corporation shall be
entitled to make such reduction in
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the Conversion Price, in addition to those required by this Section 6(d),
as it in its discretion shall determine to be advisable in order that any
stock dividend, subdivision of shares, distribution of rights to purchase
stock or securities, or distribution of securities convertible into or
exchangeable for stock hereafter made by the Corporation to its
stockholders shall not be taxable to the recipients. Except as set forth
in subsections (i), (ii) and (iii) above, the Conversion Price shall not
be adjusted for the issuance of Common Stock, or any securities
convertible into or exchangeable for Common Stock or carrying the right to
purchase any of the foregoing, in exchange for cash, property or services.
(vii) Whenever the Conversion Price is adjusted as herein provided,
(A) the Corporation shall promptly file with the stock transfer or
conversion agent, as appropriate, a certificate setting forth the
Conversion Price after such adjustment and a brief statement of the facts
requiring such adjustment and the manner of computing the same, which
certificate shall be conclusive evidence of the correctness of such
adjustment, and (B) the Corporation shall also mail or cause to be mailed
by first class mail, postage prepaid, as soon as practicable to each
holder of record of shares of Convertible Preferred Stock a notice stating
that the Conversion Price has been adjusted and setting forth the adjusted
Conversion Price. The stock transfer or conversion agent, as the case may
be, shall not be under any duty or responsibility with respect to the
certificate required by this subsection (vii) except to exhibit the same
to any holder of shares of Convertible Preferred Stock who requests to
inspect it.
(viii)In the event that at any time, as a result of an adjustment
made pursuant to subsection (i) of this Section 6(d), the holder of any
share of Convertible Preferred Stock thereafter surrendered for conversion
shall become entitled to receive any shares of the Corporation other than
shares of Common Stock, thereafter the Conversion Price of such other
shares so receivable upon conversion of any share of Convertible Preferred
Stock 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 Common Stock contained in this Section.
(ix) The Corporation from time to time may decrease the Conversion
Price by any amount for any period of time if the period is at least 20
days and if the decrease is irrevocable during the period. Whenever the
Conversion Price is so decreased, the Corporation shall mail to holders of
record of shares of Convertible Preferred Stock a notice of the decrease
at least 15 days before the date the decreased Conversion Price takes
effect, and such notice shall state the decreased Conversion Price and the
period it will be in effect.
(e) NOTICE TO HOLDERS PRIOR TO CERTAIN CORPORATE ACTIONS. In case:
(i) the Corporation shall take any action which would require an
adjustment in the Conversion Price pursuant to Section 6(d)(iii); or
- 12 -
(ii) the Corporation shall authorize the granting to the holders of
its Common Stock generally of rights or warrants to subscribe for or
purchase any shares of stock of any class or of any other rights; or
(iii) there shall be any reorganization or reclassification of the
Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common
Stock), or any consolidation or merger to which the Corporation is a party
or any statutory exchange of securities with another corporation and for
which approval of any stockholders of the Corporation is required, or any
sale or transfer of all or substantially all of the assets of the
Corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding- up of the Corporation;
then in each such case the Corporation shall cause to be given to the holders of
shares of Convertible Preferred Stock and the stock transfer or conversion
agent, as appropriate, as promptly as possible, but in any event at least 20
days prior to the applicable date hereinafter specified, a notice stating (i)
the date on which a record is to be taken for the purpose of such action or
granting of rights or warrants, or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such
distribution, rights or warrants are to be determined, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, statutory
exchange, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such
reorganization, reclassification, consolidation, merger, statutory exchange,
sale, transfer, dissolution, liquidation or winding-up. Failure to give such
notice or any defect therein shall not affect the legality or validity or the
proceedings described in subsection (i), (ii), (iii) or (iv) of this Section
6(e).
(f) RESERVATION OF SHARES OF COMMON STOCK. The Corporation covenants
that it will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued shares of Common
Stock or its issued shares of Common Stock held in its treasury, or both, for
the purpose of effecting conversions of shares of Convertible Preferred Stock,
the full number of shares of Common Stock deliverable upon the conversion of all
outstanding shares of Convertible Preferred Stock not theretofore converted and
on or before (and as a condition of) taking any action that would cause an
adjustment of the Conversion Price resulting in an increase in the number of
shares of Common Stock deliverable upon conversion above the number thereof
previously reserved and available therefor, the Corporation shall take all such
action so required. For purposes of this Section 6(f), the number of shares of
Common Stock which shall be deliverable upon the conversion of all outstanding
shares of Convertible Preferred Stock shall be computed as if at the time of
computation all outstanding shares of Convertible Preferred Stock were held by a
single holder.
- 13 -
Before taking any action which would cause an adjustment reducing
the Conversion Price below the then par value (if any) of the shares of Common
Stock deliverable upon conversion of the shares of Convertible Preferred Stock,
the Corporation shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and non-assessable shares of Common Stock at such adjusted
Conversion Price.
(g) TRANSFER TAXES, ETC. The Corporation shall pay any and all
documentary stamp, issue or transfer taxes, and any other similar taxes payable
in respect of the issue or delivery of shares of Common Stock upon conversions
of shares of Convertible Preferred Stock pursuant hereto; PROVIDED, HOWEVER,
that the Corporation shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the holder of the shares of Convertible
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of the Corporation, that such tax has been paid.
(h) CONSOLIDATION OR MERGER OR SALE OF ASSETS. Notwithstanding any
other provision herein to the contrary, in case of any consolidation or merger
to which the Corporation is a party (other than a merger or consolidation in
which the Corporation is the continuing corporation and in which the Common
Stock outstanding immediately prior to the merger or consolidation is not
exchanged for cash, or the securities or other property of another corporation),
or in case of any sale or transfer to another corporation of the property of the
Corporation as an entirety or substantially as an entirety, or in the case of
any statutory exchange of securities with another corporation (other than in
connection with a merger or acquisition), then lawful provision shall be made by
the corporation formed by such consolidation or the corporation whose
securities, cash or other property will immediately after the merger or
consolidation be owned, by virtue of the merger or consolidation, by the holders
of Common Stock immediately prior to the merger or consolidation, or the
corporation which shall have acquired such assets or securities of the
Corporation (collectively the "Formed, Surviving or Acquiring Corporation"), as
the case may be, providing that the holder of each share of Convertible
Preferred Stock then outstanding shall have the right thereafter to convert such
share into the kind and amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or transfer by a
holder of the number of shares of Common Stock into which such share of
Convertible Preferred Stock might have been converted immediately prior to such
consolidation, merger, statutory exchange, sale or transfer assuming such holder
of Common Stock did not exercise his rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or transfer (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or transfer is not the same for
each share of Common Stock in respect of which such rights of election shall not
have been exercised ("non-electing share"), then for the purposes of this
Section 6(h) the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or transfer
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). The Formed,
Surviving or Acquiring Corporation, as the case may be, shall make provision in
its certificate or articles of incorporation or other constituent documents to
the end that the provisions set forth in this Section 6(h) shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property thereafter deliverable on
the conversion of the Convertible Preferred Stock.
The above provisions of this Section 6(h) shall similarly apply to
successive consolidations, mergers, statutory exchanges, sales or transfers.
(i) COVENANT AS TO COMMON STOCK. The Corporation covenants that all
shares of Common Stock which may be delivered upon conversions of shares of
Convertible Preferred Stock will upon delivery be duly and validly issued and
fully paid and non-assessable, free of all liens and charges and not subject to
any preemptive rights.
The Corporation covenants that if any shares of Common Stock to be
provided for the purpose of conversion of shares of Convertible Preferred Stock
hereunder require registration with or approval of any governmental authority
under any Federal or State law before such shares may be validly issued upon
conversion, the Corporation will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be.
The Corporation further covenants that if at any time the Common
Stock shall be listed on the New York Stock Exchange or any other national
securities exchange, the Corporation will, if permitted by the rules of such
exchange, list and keep listed so long as the Common Stock shall be so listed on
such exchange, all Common Stock issuable upon conversion of the shares of
Convertible Preferred Stock.
Section 7. VOTING RIGHTS.
(a) GENERAL. The holders of Convertible Preferred Stock shall not
have any voting rights except as set forth below or as otherwise from time to
time required by law. In connection with any right to vote, each holder of
Convertible Preferred Stock will have one vote for each share held. Any shares
of Convertible Preferred Stock held by the Corporation or any entity controlled
by the Corporation shall not have voting rights hereunder and shall not be
counted in determining the presence of a quorum.
(b) DEFAULT VOTING RIGHTS. Whenever dividends on the Convertible
Preferred Stock shall be in arrears in an amount equal to at least six quarterly
dividends (whether or not consecutive), (i) the number of members of the Board
of Directors of the Corporation shall be increased by two, effective as of the
time of election of such directors as hereinafter provided, and (ii) the holders
of the Convertible Preferred Stock (voting separately as a class with all other
affected classes or series of the Parity Dividend Stock upon which like voting
rights have been
- 14 -
conferred and are exercisable) will have the exclusive right to vote for and
elect such two additional directors of the Corporation at any meeting of
stockholders of the Corporation at which directors are to be elected held during
the period such dividends remain in arrears. The right of the holders of the
Convertible Preferred Stock to vote for such two additional directors shall
terminate when all accrued and unpaid dividends on the Convertible Preferred
Stock have been declared and paid or set apart for payment. The term of office
of all directors so elected shall terminate immediately upon the termination of
the right of the holders of the Convertible Preferred Stock and such Parity
Dividend Stock to vote for such two additional directors.
The foregoing right of the holders of the Convertible Preferred
Stock with respect to the election of two directors may be exercised at any
annual meeting of stockholders or at any special meeting of stockholders held
for such purpose. If the right to elect directors shall have accrued to the
holders of the Convertible Preferred Stock more than 90 days preceding the date
established for the next annual meeting of stockholders, the President of the
Corporation shall, within 20 days after the delivery to the Corporation at its
principal office of a written request for a special meeting signed by the
holders of at least ten percent (10%) of the Convertible Preferred Stock then
outstanding, call a special meeting of the holders of the Convertible Preferred
Stock to be held within 60 days after the delivery of such request for the
purpose of electing such additional directors.
The holders of the Convertible Preferred Stock and any Parity
Dividend Stock referred to above voting as a class shall have the right to
remove without cause at any time and replace any directors such holders have
elected pursuant to this Section 7.
(c) CLASS VOTING RIGHTS. So long as the Convertible Preferred Stock
is outstanding, the Corporation shall not, without the affirmative vote or
consent of the holders of at least 662/3 percent of all outstanding Convertible
Preferred Stock (unless the vote or consent of a greater percentage is required
by applicable law or the Restated Articles of Incorporation of the Corporation),
voting separately as a class, (i) amend, alter or repeal (by merger,
consolidation or otherwise) any provision of the Restated Articles of
Incorporation or the Bylaws of the Corporation, as amended, so as to affect
adversely the relative rights, preferences, qualifications, limitations or
restrictions of the Convertible Preferred Stock, (ii) authorize or issue, or
increase the authorized amount of, any additional class or series of stock, or
any security convertible into stock of such class or series, ranking prior to
the Convertible Preferred Stock in respect of the payment of dividends or upon
liquidation, dissolution or winding up of the Corporation or (iii) effect any
reclassification of the Convertible Preferred Stock. A class vote on the part of
the Convertible Preferred Stock shall, without limitation, specifically not be
deemed to be required (except as otherwise required by law or resolution of the
Corporation's Board of Directors) in connection with: (a) the authorization,
issuance or increase in the authorized amount of any shares of any other class
or series of stock that ranks junior to, or on a parity with, the Convertible
Preferred Stock in respect of the payment of dividends and upon liquidation,
dissolution or winding up of the Corporation; or (b) the authorization, issuance
or increase in the amount of any notes, bonds, mortgages, debentures or other
obligations of the Corporation not convertible into
- 15 -
or exchangeable, directly or indirectly, for stock ranking prior to the
Convertible Preferred Stock in respect of the payment of dividends or upon
liquidation, dissolution or winding up of the Corporation.
Section 8. OUTSTANDING SHARES. For purposes of this Certificate of
Resolution, all shares of Convertible Preferred Stock shall be deemed
outstanding except (i) from the date fixed for redemption pursuant to Section 5,
all shares of Convertible Preferred Stock that have been so called for
redemption under Section 5 if shares of Common Stock and funds necessary for
payment of the redemption price have been irrevocably set apart; (ii) from the
date of surrender of certificates representing shares of Convertible Preferred
Stock, all shares of Convertible Preferred Stock converted into Common Stock;
and (iii) from the date of registration of transfer, all shares of Convertible
Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
Section 9. STATUS OF ACQUIRED SHARES. Shares of Convertible
Preferred Stock redeemed by the Corporation, received upon conversion pursuant
to Section 6, or otherwise acquired by the Corporation will be restored to the
status of authorized and unissued shares of Preferred Stock, without designation
as to series, and may thereafter be issued, but not as shares of Convertible
Preferred Stock.
Section 10. PREEMPTIVE RIGHTS. The Convertible Preferred Stock is
not entitled to any preemptive or subscription rights in respect of any
securities of the Corporation.
Section 11. SEVERABILITY OF PROVISIONS. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
- 16 -
IN WITNESS WHEREOF, Battle Mountain Gold Company has caused this
certificate to be signed on its behalf by R. Dennis O'Connell, its Vice
President - Finance, and its corporate seal to be hereunto affixed and attested
by Robert J. Quinn, its Secretary, this 18th day of May, 1993.
BATTLE MOUNTAIN GOLD COMPANY
[SEAL]
By: /s/ R. DENNIS O'CONNELL
R. Dennis O'Connell
Vice President - Finance
Attest:
/s/ ROBERT J. QUINN
Robert J. Quinn
Secretary
- 17 -
STATE OF COLORADO |
|
COUNTY OF ARAPAHOE |
This instrument was acknowledged before me on the 18th day of May,
1993, by R. Dennis O'Connell, of Battle Mountain Gold Company, a Nevada
corporation on behalf of said corporation.
/s/ DEBORAH S. WHEELER
Notary Public, State of Colorado
DEBORAH S. WHEELER
Printed Name of Notary:
My Commission Expires: Dec. 5, 1995
Bonded thru NOTARY PUBLIC AGENCY
Deborah S. Wheeler
Notary Public, State of Colorado
- 18 -
EXHIBIT 4(c)
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF
RESOLUTION ESTABLISHING DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
BATTLE MOUNTAIN GOLD COMPANY
Pursuant to Sections 78.195 and 78.1955 of the Nevada Revised Statutes
FIRST: The original designation of the series of stock to which this
Certificate of Amendment relates was "Series A Junior Participating Preferred
Stock."
SECOND: No shares of the series of stock to which this Certificate
of Amendment relates have been issued.
THIRD: The following sets forth the designation of the series of
stock to which this Certificate of Amendment relates, the number of shares
constituting such series and the voting powers, designations, preferences,
limitations, restrictions and relative rights of such series, as amended:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation by the Restated Articles of Incorporation, a
series of Preferred Stock, par value $1.00 per share, of the Corporation, be and
hereby is created, and that the designation and number of shares thereof and the
voting and other powers, preferences and relative, participating, optional or
other rights if any of the shares of such series and the qualifications,
limitations and restrictions thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" and the number
of shares constituting such series shall be 5,000,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the 15th day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date
1
after the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $2.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock,
par value $0.10 per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred Stock. In the
event the Corporation shall at any time after November 10, 1988 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $2.00 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred
2
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Participating Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series A Junior Participating Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series A Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A Junior
Participating Preferred Stock) upon which these or like voting rights have been
conferred and are exercisable (the "Voting Preferred Stock") with dividends in
arrears in an amount equal to six quarterly dividends thereon, voting as a
class, irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Voting Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of 10 percent in number of shares of Voting Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Voting Preferred
Stock of such voting right. At any meeting at which the holders of Voting
Preferred Stock shall
3
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two
Directors or, if such right is exercised at an annual meeting, to elect two
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Voting Preferred Stock shall
have the right to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number. After the
holders of the Voting Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except by vote of the
holders of Voting Preferred Stock as herein provided or pursuant to the rights
of any equity securities ranking senior to or PARI PASSU with the Series A
Junior Participating Preferred Stock.
(iii) Unless the holders of Voting Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 10 percent of the total number of shares
of Voting Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Voting Preferred Stock, which
meeting shall thereupon be called by the President, a Vice President or the
Secretary of the Corporation. Notice of such meeting and of any annual meeting
at which holders of Voting Preferred Stock are entitled to vote pursuant to this
paragraph (C) (iii) shall be given to each holder of record of Voting Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be called for a time
not earlier than 20 days and not later than 60 days after such order or request
or, in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than 10 percent of the total
number of shares of Voting Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C) (iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be entitled
to elect the whole number of Directors until the holders of Voting Preferred
Stock shall have exercised their right to elect two Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
Voting Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided in
paragraph (C) (ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Voting Preferred Stock as a class to elect Directors
shall cease, (y) the term of any
4
Directors elected by the holders of Voting Preferred Stock as a class shall
terminate and (z) the number of Directors shall be such number as may be
provided for in the Restated Articles of Incorporation or by-laws irrespective
of any increase made pursuant to the provisions of paragraph (C) (ii) of this
Section 3 (such number being subject, however, to change thereafter in any
manner provided by law or in the Restated Articles of Incorporation or by-laws).
Any vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the
remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the Series
A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series A Junior Participating Preferred Stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A
5
Junior Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
being referred to as the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other
6
series of preferred stock, if any, which rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. RANKING. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.
Section 10. AMENDMENT. At any time that any shares of Series A
Junior Participating Preferred Stock are outstanding, the Restated Certificate
of Incorporation of the Corporation or the resolution establishing the
designation, preferences and rights of the Series A Junior Participating
Preferred Stock shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Junior
Participating Preferred
7
Stock so as to affect them adversely without the affirmative vote of the holders
of a majority or more of the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
Section 11. FRACTIONAL SHARES. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, Battle Mountain Gold Company has caused this
Certificate of Amendment to be executed in its name by R. Dennis O'Connell, its
Vice PresidentFinance, and by Robert J. Quinn, its Secretary, and its corporate
seal to be affixed hereto this 17th day of July, 1996.
BATTLE MOUNTAIN GOLD COMPANY
[SEAL]
By: /s/ R. DENNIS O'CONNELL
R. Dennis O'Connell
Vice President-Finance
By: /s/ ROBERT J. QUINN
Robert J. Quinn
Secretary
8
STATE OF TEXAS |
|
COUNTY OF HARRIS |
Before me, a Notary Public, on this day personally appeared R. Dennis
O'Connell and Robert J. Quinn, known by me to be the Vice President-Finance and
the Secretary, respectively, of Battle Mountain Gold Company and to be the
persons whose names are subscribed to the foregoing document, and, being by me
first duly sworn, each declared that the statements therein contained are true
and correct.
Given under my hand and seal of office this 17th day of July, 1996
/s/ DONNA M. COOPER
Notary Public in and for
the State of Texas
9
EXHIBIT 4(d)
BATTLE MOUNTAIN GOLD COMPANY
AMENDED BYLAWS
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this
Corporation shall be held on such date and at such time and place, within or
without the State of Nevada, as the Board of Directors of the Corporation may
designate, and on any subsequent day or days and at the time and place to which
such meeting may be adjourned, for the purposes of electing directors and of
transacting such other business as may properly come before the meeting. The
Board of Directors shall give at least ten (10) days' notice of the date, time
and place of the meeting to the stockholders.
SECTION 2. Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders and may not be effected by any consent in
writing by stockholders. Except as otherwise required by law and subject to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation, special meetings of
stockholders of the Corporation may be called only by the Board of Directors
pursuant to a resolution approved by a majority of the entire Board of Directors
or by the Chairman of the Board or by the President of the Corporation. Upon
written request of the Board of Directors, the Chairman of the Board or the
President, after the Chairman of the Board or the President after having duly
called a special meeting of stockholders, it shall be the duty of the Secretary
or any Assistant Secretary of the Corporation to fix the date of the meeting to
be held not less than ten (10) nor more than sixty (60) days after receipt of
the request and to give due notice thereof.
SECTION 3. Every special meeting of stockholders shall be held at
such place within or without the State of Nevada as the Board of Directors may
designate.
SECTION 4. Written notice of every meeting of stockholders shall be
given by the Secretary of the Corporation to each stockholder of record entitled
to vote at the meeting, by placing such notice in the mail at least ten (10)
days, but not more than sixty (60) days, prior to the day named for the meeting
addressed to each stockholder at his address appearing on the books of the
Corporation.
SECTION 5. The Board of Directors may fix a date, not less than ten
(10) nor more than sixty (60) days preceding the date of any meeting of
stockholders, as a record date for the determination of stockholders entitled to
notice of, and to vote at, any such meeting. The Board of Directors shall not
close the books of the Corporation against transfers of shares during the whole
or any part of such period.
-1-
SECTION 6. The notice of every meeting of stockholders may be
accompanied by a form of proxy approved by the Board of Directors in favor of
such person or persons as the Board of Directors may select.
SECTION 7. Except as otherwise provided by law, the Articles of
Incorporation of the Corporation or these Bylaws, the presence in person or by
proxy of the holders of a majority of the outstanding shares of stock of the
Corporation entitled to vote thereat shall constitute a quorum at each meeting
of stockholders. The stockholders present at any duly organized meeting may
continue to do business until adjournment, notwithstanding the withdrawal of
enough stockholders to leave less than a quorum. Directors shall be elected by a
plurality of the votes cast in the election. For all matters as to which no
other voting requirement is specified by law, the Articles of Incorporation of
the Corporation or these Bylaws, the affirmative vote required for stockholder
action shall be that of a majority of the shares of stock entitled to vote
thereon present in person or represented by proxy at the meeting (as counted for
purposes of determining the existence of a quorum at the meeting). In the case
of a matter submitted for a vote of the stockholders as to which a stockholder
approval requirement is applicable under the stockholder approval policy of the
New York Stock Exchange, the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934 or any provision of the Internal Revenue Code, in each case
for which no higher voting requirement is specified by law, the Articles of
Incorporation of the Corporation or these Bylaws, the vote required for approval
shall be the requisite vote specified in such stockholder approval policy, Rule
16b-3 or Internal Revenue Code provision, as the case may be (or the highest
such requirement if more than one is applicable). For the approval of the
appointment of independent public accountants (if submitted for a vote of the
stockholders), the vote required for approval shall be a majority of the votes
cast on the matter.
SECTION 8. Any meeting of stockholders may be adjourned from time to
time, without notice other than by announcement at the meeting at which such
adjournment is taken, and at any such adjourned meeting at which a quorum shall
be present any action may be taken that could have been taken at the meeting
originally called; provided that if the adjournment is for more than thirty (30)
days, or if, after the adjournment, a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the adjourned meeting.
-2-
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. The business, affairs and property of the Corporation
shall be managed by a board of directors divided into three classes as provided
in the Articles of Incorporation of the Corporation. The number of directors
constituting the entire Board of Directors shall be fixed from time to time by
resolution of the entire Board of Directors but shall be not less than three nor
more than twelve. Each director shall hold office for the full term to which he
shall have been elected and until his successor is duly elected and shall
qualify, or until his earlier death, resignation or removal. A director need not
be a resident of the State of Nevada or a stockholder of the Corporation.
SECTION 2. Except as provided in the Articles of Incorporation of
the Corporation and subject to the rights of holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under specified circumstances, newly created
directorships resulting from any increase in the number of directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled by the affirmative vote
of a majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been elected and
qualifies. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
SECTION 3. No director of the Corporation shall be removed from
office as a director without cause except by the affirmative vote of the holders
of 80% of the number of shares of Common Stock then outstanding. A Director may
be removed from office for cause only by the affirmative vote of the holders of
not less than a majority of the Common Stock then outstanding. Except as
otherwise provided by law or fixed pursuant to the provisions of Article FOURTH
of the Corporation's Restated Articles of Incorporation relating to the rights
of holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, this Section 3 shall not apply with
respect to any director elected by the holders of any such class or series
having preference.
SECTION 4. Subject to the rights of holders of any class or series
having a preference over the Common Stock as to dividends or upon liquidation,
nominations for the election of directors may be made by the Board of Directors
or a proxy committee appointed by the Board of Directors or by any stockholder
entitled to vote in the election of directors. Any stockholder entitled to vote
in the election of directors may nominate one or more persons for election as
directors only at a meeting of stockholders and only if written notice of such
stockholder's intent to make such nomination or nominations have been given,
either by personal delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation not later than (i) with respect to an
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election to be held at an annual meeting of stockholders, ninety (90) days in
advance of such meeting, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of directors, the close of
business on the seventh day following the date on which notice of such meeting
is first given to stockholders.
Each such notice shall set forth: (a) the name and address of the stockholder
who intends to make the nomination and of the person or persons to be nominated;
(b) a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or person) pursuant to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, as then
in effect, had the nominee been nominated, or intended to be nominated, by the
Board of Directors; and (e) the consent of each nominee to serve as a director
of the Corporation if so elected.
SECTION 5. Regular meetings of the Board of Directors shall be held
at such place or places within or without the State of Nevada and at such time
and on such day as may be fixed by resolution of the Board of Directors, without
further notice of such meetings. The time or place of holding regular meetings
of the Board of Directors may be changed by the Chairman of the Board of
Directors or the President of the Corporation by giving written notice thereof
as provided in Section 7 of this Article II.
SECTION 6. Special meetings of the Board of Directors shall be held,
whenever called by the Chairman of the Board of Directors, the Chairman of the
Executive Committee of the Board of Directors, the President of the Corporation,
or by resolution adopted by the entire Board of Directors, at such place or
places within or without the State of Nevada as may be stated in the notice of
the meeting.
SECTION 7. Written notice of the time and place of, and general
nature of the business to be transacted at, all special meetings of the Board of
Directors, and written notice of any change in the time or place of holding the
regular meetings of the Board of Directors, shall be given to each director
personally or by mail or by telegraph, telecopier or similar communication;
provided, however, that notice of any meeting need not be given to any director
if waived by him in writing, or if he shall be present at such meeting.
SECTION 8. A majority of directors in office shall constitute a
quorum of the Board of Directors for the transaction of business, but a lesser
number may adjourn from day to day until a quorum is present. Except as
otherwise provided by law or in these Bylaws, all questions shall be decided by
a vote of a majority of the directors present.
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SECTION 9. Any action that may be taken at a meeting of the Board of
Directors or members of the Executive Committee may be taken without a meeting
if consent in writing setting forth the action so taken shall be signed by all
of the directors or members of the Executive Committee, as the case may be, and
shall be filed with the Secretary of the Corporation.
SECTION 10. The Board of Directors may designate one or more of its
number to be Vice Chairman of the Board, Chairman of the Executive Committee and
Chairman of any other committees of the Board of Directors and to hold such
other positions on the Board as the Board of Directors may designate.
ARTICLE III
EXECUTIVE COMMITTEE
The Board of Directors may, by resolution adopted by a majority of
the entire Board, designate two or more of its number to constitute an Executive
Committee that shall have and exercise the authority of the Board of Directors
in the management of the business of the Corporation to the extent permitted by
law during intervals between meetings of the Board. The Board of Directors may,
by resolution adopted by a majority of the entire Board, designate two or more
of its number to constitute any other Committee or Committees with such powers,
duties, responsibilities and duration of existence as the Board of Directors
shall deem necessary or desirable.
ARTICLE IV
OFFICERS
SECTION 1. The officers of the Corporation shall consist of a
Chairman of the Board of Directors, President, Secretary, Treasurer and such
Executive, Group, Senior or other Vice Presidents, and other officers as may be
elected or appointed by the Board of Directors. Any number of offices may be
held by the same person. All officers shall hold office until their successors
are elected or appointed, except that the Board of Directors may remove any
officer at any time at its discretion.
SECTION 2. The officers of the Corporation shall have such powers
and duties as generally pertain to their offices, except as modified herein or
by the Board of Directors, as well as such powers and duties as from time to
time may be conferred by the Board of Directors. The Chairman of the Board and
the President shall establish an office of the Chief Executive with officers
from the Corporation and Battle Mountain Canada Ltd. to manage the Corporation,
Battle Mountain Canada Ltd. and their respective subsidiaries. The Chairman of
the Board shall preside at meetings of the Board of Directors and at meetings of
stockholders.
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ARTICLE V
SEAL
The seal of the Corporation shall be in such form as the Board of
Directors shall prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
The shares of stock of the Corporation shall be represented by
certificates of stock, signed by the President or such Vice President or other
officer designated by the Board of Directors, countersigned by the Treasurer or
the Secretary and bearing the seal of the Corporation; and such signature of the
President, Vice President, or other officer, such countersignature of the
Treasurer or Secretary, and such seal, or any of them, may be executed in
facsimile, engrave or printed. In case any officer who has signed or whose
facsimile signature has been placed upon any share certificate shall have ceased
to be such officer because of death, resignation or otherwise before the
certificate is issued, the share certificate may be issued by the Corporation
with the same effect as if the officer had not ceased to be such at the date of
its issue. Said certificates of stock shall be in such form as the Board of
Directors may from time to time prescribe.
ARTICLE VII
INDEMNIFICATION
SECTION 1. RIGHT TO INDEMNIFICATION - GENERAL. The Corporation shall
indemnify and hold harmless each person who was or is, or is threatened to be
made, a party to or otherwise involved in any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or other proceeding, whether civil,
criminal, administrative or investigative in nature (any such threatened,
pending or completed proceeding being hereinafter called a "Proceeding") by
reason of the fact that he is or was a director or officer of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise (whether the basis of his
involvement in such Proceeding is alleged action in an official capacity or in
any other capacity while serving as such), to the fullest extent permitted by
applicable law in effect on April 28, 1987, and to such greater extent as
applicable law may thereafter from time to time permit, from and against all
expense, liability and loss (including Expenses, as hereinafter defined,
judgments, penalties, ERISA excise taxes, fines and amounts paid or to be paid
in settlement) actually and reasonably incurred by him or on his behalf or
suffered in connection with such Proceeding or any claim, issue or matter
therein; PROVIDED, HOWEVER, that, except as provided in Section 5 of this
Article VII, the Corporation shall indemnify any such person
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claiming indemnity in connection with a Proceeding initiated by such person only
if such Proceeding was authorized by the Board of Directors. Such
indemnification rights shall include, but not be limited to, the right to be
indemnified to the fullest extent permitted by N.R.S. ss.ss.78.751(2) and (3) in
the case of Proceedings by or in the right of the Corporation and to the fullest
extent permitted by N.R.S. ss.ss.78.751(1) and (3) in the case of all other
Proceedings.
SECTION 2. CERTAIN PROVISIONS RESPECTING INDEMNIFICATION FOR AND
ADVANCEMENT OF EXPENSES. (a) Without limiting any other right of indemnification
provided for in this Article VII, to the extent that a person referred to in
Section 1 of this Article VII claiming indemnity thereunder is successful on the
merits or otherwise in defense of any Proceeding, he must be indemnified against
all Expenses actually and reasonably incurred by him or on his behalf in
connection with such Proceeding. If such person is not wholly successful in
defense of such Proceeding but is successful on the merits or otherwise therein,
the Corporation must indemnify such person against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. The termination of any claim, issue or matter
in such a Proceeding by dismissal, with or without prejudice, shall be deemed to
be a successful result as to such claim, issue or matter.
(b) To the extent that a person referred to in Section 1 of this
Article VII is required to serve as a witness in any Proceeding referred to
therein, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection with serving as a witness.
(c) The Corporation must from time to time pay, in advance of final
disposition, all reasonable Expenses incurred, as such Expenses are incurred, by
or on behalf of any person referred to in Section 1 of this Article VII claiming
indemnity thereunder in respect of any Proceeding referred to therein. Each such
advance shall be made within ten (10) days after the receipt by the Corporation
of a statement from the claimant requesting the advance, which statement shall
reasonably evidence the relevant Expenses and be accompanied or preceded by any
such undertaking as may be required by applicable law respecting the contingent
repayment of such Expenses.
SECTION 3. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION. (a) To obtain indemnification under this Article VII, a
claimant shall submit to the Secretary of the Corporation a written application.
The Secretary of the Corporation shall, promptly upon receipt of such an
application for indemnification, advise the Board of Directors in writing of the
application. In connection with any such application, the claimant shall provide
such documentation and information as is requested by the Corporation and
reasonably available to him and relevant to a determination of entitlement to
indemnification.
(b) Any indemnification under this Article VII, unless otherwise
ordered by a court or advanced pursuant to Paragraph (c) of Section 2 of this
Article VII, must be made by the
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Corporation upon a determination that indemnification is proper in the
circumstances. The determination must be made: (i) by the Board of Directors by
a majority vote of such quorum consisting of Disinterested Directors, (ii) by
Independent Counsel in a written opinion, if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtainable or, even if obtainable,
a majority vote of such quorum of Disinterested Directors so directs, or (iii)
by the stockholders of the Corporation; PROVIDED, HOWEVER, that if a Change of
Control, as hereinafter defined, shall have occurred, no determination of
entitlement to indemnification adverse to the claimant shall be made other than
one made or concurred in by Independent Counsel, selected as provided in
Paragraph (d) of this Section 3, in a written opinion.
(c) If the determination of entitlement to indemnification is to be
made by Independent Counsel in the absence of a Change of Control, the
Corporation shall furnish notice to the claimant within ten (10) days after
receipt of the application for indemnification, specifying the identity and
address of Independent Counsel. The claimant may, within fourteen (14) days
after receipt of such written notice of selection, deliver to the Corporation a
written objection to such selection, subject to Paragraph (e) of this Section 3.
If such an objection is made, either the Corporation or the claimant may
petition any court of competent jurisdiction for a determination that the
objection is without a reasonable bases and/or for the appointment as
Independent Counsel of counsel selected by the Court.
(d) If there has been a Change of Control, Independent Counsel to
act as and to the extent required by Paragraph (b) of this Section 3 shall be
selected by the claimant, who shall give the Corporation written notice advising
of the identity and address of the Independent Counsel so selected. The
Corporation may, within seven (7) days after receipt of such written notice of
selection, deliver to the claimant a written objection to such selection,
subject to Paragraph (e) of this Section 3. The claimant may, within five (5)
days after the receipt of such objection, select other counsel to act as
Independent Counsel, and the Corporation may, within seven (7) days after
receipt of such written notice of selection, deliver to the claimant a written
objection, as aforesaid, to such second selection. In the case of any such
objection, the claimant may petition any Court of competent jurisdiction for a
determination that the objection is without a reasonable basis and/or for the
appointment as Independent Counsel of counsel selected by the Court.
(e) Any objection to the selection of Independent Counsel may be
asserted only on the ground that the counsel so selected does not qualify as
Independent Counsel under the definition contained in Section 8 of this Article
VII, and the objection shall set forth with particularity the basis of such
assertion. No counsel selected by the Corporation or by the claimant may serve
as Independent Counsel if a timely objection has been made to his selection
unless a Court has determined that such objection is without a reasonable basis.
(f) The Corporation shall pay any and all reasonable fees and
expenses of Independent Counsel acting pursuant to this Article VII and in any
proceeding to which such counsel is a party or a witness in respect of its
investigation and report. The Corporation shall pay all
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reasonable fees and expenses incident to the procedures of this Section 3
regardless of the manner in which Independent Counsel is selected or appointed.
SECTION 4. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. (a) A
person referred to in Section 1 of this Article VII claiming a right to
indemnification under this Article VII shall be presumed (except as may be
otherwise expressly provided in this Article VII or required by applicable law)
to be entitled to such indemnification upon submission of an application for
indemnification in accordance with Section 3, and the Corporation shall have the
burden of proof to overcome the presumption by clear and convincing evidence in
any determination contrary to the presumption.
(b) Unless the determination is to be made by Independent Counsel,
if the person or persons empowered under Section 3 of this Article VII to
determine entitlement to indemnification shall not have made and furnished the
determination in writing to the claimant within sixty (60) days after receipt by
the Corporation of the application for indemnification, the determination of
entitlement to indemnification, shall be deemed to have been made in favor of
the claimant unless the claimant knowingly misrepresented a material fact in
connection with the application or such indemnification is prohibited by law.
The termination of any Proceeding described in Section 1 of this Article VII, or
of any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not
(except as may be otherwise expressly provided in this Article VII or required
by applicable law) of itself adversely affect the right of a claimant to
indemnification or create a presumption that a claimant did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, or with respect to any criminal
Proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
SECTION 5. RIGHT OF CLAIMANT TO BRING SUIT. (a) If (i) a
determination is made pursuant to the procedures contemplated by Section 3 of
this Article VII that a claimant is not entitled to indemnification under this
Article VII, (ii) advancement of Expenses is not timely made pursuant to
Paragraph (c) of Section 2 of this Article VII, (iii) Independent Counsel has
not made and delivered a written opinion as to entitlement to indemnification
within ninety (90) days after the selection or appointment of counsel has become
final by virtue of the lapse of time for objection or the overruling of
objections or appointment of counsel by a Court, or (iv) payment of a claim for
indemnification is not made within ten (10) days after a favorable determination
of entitlement to indemnification has been made or deemed to have been made
pursuant to Section 3 or 4 of this Article VII, the claimant shall be entitled
to bring suit against the Corporation to establish his entitlement to such
indemnification or advancement of Expenses and to recover the unpaid amount of
his claim. Neither the failure of the Corporation (including its Board of
Directors, Independent Counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper under the circumstances, nor an actual determination by the Corporation
(including its Board of Directors, Independent Counsel or its stockholders) that
indemnification is not proper in the circumstances, shall be a defense to the
action or create a
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presumption that indemnification is not proper in the circumstances, and the
claimant shall be entitled to a DE NOVO trial on the merits as to any such
matter as to which no determination or an adverse determination has been made.
(b) If a claimant is successful in whole or in part in prosecuting
any claim referred to in Paragraph (a) of this Section 5, the claimant shall
also be entitled to recover from the Corporation, and shall be indemnified by
the Corporation against, any and all Expenses actually and reasonably incurred
by him in prosecuting such claim if such Expenses have not already been paid by
the Corporation.
SECTION 6. NON-EXCLUSIVITY, INSURANCE AND SURVIVAL OF RIGHTS. The
rights of indemnification and to receive advancement of Expenses contemplated by
this Article VII shall not be exclusive of any other right to which any person
may at any time be entitled under any applicable law, provision of the Articles
of Incorporation, bylaw, agreement, vote of stockholders or resolution of
directors, or otherwise. Without limiting the generality of the foregoing, the
Corporation may, by action of its Board of Directors, provide indemnification to
other employees and agents of the Corporation with the same or lesser scope and
effect as the indemnification of directors and officers authorized by this
Article VII.
The Corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses incurred by him in
this capacity as a director, officer, employee or agent, or arising out of his
status as such, whether or not the Corporation has the authority to indemnify
him against such liability and expenses under the Corporation Law of Nevada.
The other financial arrangements made by the Corporation may include
the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the Corporation.
(d) The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection may
provide protection for a person adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable for intentional
misconduct, fraud or a knowing violation of law, except with respect to the
advancement of expenses or indemnification ordered by a court.
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The right to indemnification conferred in this Article VII shall be
a contract right, and no amendment, alteration or repeal of this Article VII or
any provision thereof shall restrict the indemnification rights granted by this
Article VII as to any person claiming indemnification with respect to acts,
events and circumstances that occurred, in whole or in part, before such
amendment, alteration or repeal. The provisions of this Article VII shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his heirs, executors and administrators.
SECTION 7. SEVERABILITY. If any provision of this Article VII shall
be held to be invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby; and, to the fullest extent possible,
the provisions of this Article VII shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or unenforceable.
SECTION 8. DEFINITIONS. For purposes of this Article VII:
(a) "Change of Control" shall be deemed to have occurred if:
(i) any "person," including a "group" as determined in accordance with Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is or becomes the beneficial owner, directly or indirectly of securities
of the Corporation representing thirty percent (30%) or more of the combined
voting power of the Corporation's then outstanding securities; (ii) as a result
of, or in connection with, any tender offer or exchange offer, merger or other
business combination, sale of assets or contested election, or any combination
of the foregoing transactions (a "Transaction"), the persons who were directors
of the Corporation before the Transaction shall cease to constitute a majority
of the Board of Directors of the Corporation or any successor to the
Corporation; (iii) the Corporation is merged or consolidated with another
corporation, and as a result of such merger or consolidation less than seventy
percent (70%) of the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by the former stockholders of
the Corporation, other than (x) any party to such merger or consolidation, or
(y) any affiliates to any such party; (iv) a tender offer or exchange offer is
made and consummated for the ownership of securities of the Corporation
representing thirty percent (30%) or more of the combined voting power of the
Corporation's then outstanding voting securities; or (v) the Corporation
transfers substantially all of its assets to another corporation that is not a
wholly-owned corporation of the Corporation.
(b) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which indemnification
is sought as provided in this Article VII.
(c) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of
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the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, or being or preparing to be a
witness in a Proceeding.
(d) "Independent Counsel" means a law firm, or a member of a law
firm, with substantial experience in matters of corporation law and that neither
presently is, nor in the five (5) years previous to his selection or appointment
has been, retained to represent: (i) the Corporation or person claiming
indemnification in any matter material to either, or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder, and is not
otherwise precluded under applicable professional standards from acting in the
capacity herein contemplated.
(e) "N.R.S." means the Nevada Revised Statutes.
ARTICLE VIII
ACTION UNDER NEVADA STATUTE
The provisions of Sections 78.378 to 78.3793, inclusive, of the
Nevada General Corporation Law do not apply to the acquisition by Noranda Inc.,
an Ontario corporation ("Noranda"), or any person controlled by Noranda or, to
the extent any such person is deemed to be an acquiring person or a person
acting in concert with an acquiring person within the meaning of such
provisions, any person controlling Noranda at the time of such acquisition, of
up to 65,242,526 exchangeable shares ("Exchangeable Shares") of Battle Mountain
Canada Ltd., an Ontario corporation, or shares of common stock, par value $0.10
per share ("Common Stock"), of the Corporation in the arrangement referred to in
the Combination Agreement dated as of March 11, 1996 by and between the
Corporation and Hemlo Gold Mines Inc., an Ontario corporation (to be renamed
Battle Mountain Canada Ltd.), as amended and restated (including shares of
Common Stock issuable upon exchange for such Exchangeable Shares).
ARTICLE IX
AMENDMENTS
Subject to the provisions of the Articles of Incorporation, these
Bylaws may be altered, amended or repealed at any regular meeting of
stockholders (or at any special meeting thereof duly called for that purpose)
only by the affirmative vote of the holders of at least eighty percent (80%) of
the voting power of all shares of the Corporation represented at such meeting
and entitled to vote generally in the election of directors, voting together as
a class, provided that in the notice of any such special meeting notice of such
purpose shall be given. Subject to the laws of the State of Nevada, the Articles
of Incorporation and these Bylaws, the Board of Directors may alter,
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amend or repeal these Bylaws, or enact such other Bylaws as in their judgment
may be advisable for the regulation of the conduct of the affairs of the
Corporation, by majority vote of those present at any meeting of the Board of
Directors at which a quorum is present (except so far as Bylaws adopted by
stockholders shall otherwise provide).
July 19, 1996
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EXHIBIT 4(e)
BATTLE MOUNTAIN GOLD COMPANY
and
THE BANK OF NEW YORK
Rights Agent
---------------
Rights Agreement
Dated as of November 10, 1988,
as amended and restated as of
July 19, 1996
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
1. Certain Definitions....................................................2
2. Appointment of Rights Agent............................................6
3. Issue of Rights Certificates...........................................6
4. Form of Rights Certificates............................................8
5. Countersignature and Registration......................................9
6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates...................................................10
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........10
8. Cancellation and Destruction of Rights Certificates...................12
9. Reservation and Availability of Capital Stock.........................13
10. Preferred Stock Record Holder.........................................14
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights......................................................14
12. Certificate of Adjusted Purchase Price or Number of Shares............24
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..24
14. Fractional Rights and Fractional Shares...............................27
15. Rights of Action......................................................28
16. Agreement of Rights Holders...........................................28
17. Rights Certificate Holder Not Deemed a Stockholder....................29
18. Concerning the Rights Agent...........................................30
19. Merger or Consolidation or Change of Name of Rights Agent.............30
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20. Duties of Rights Agent................................................31
21. Change of Rights Agent................................................33
22. Issuance of New Rights Certificates...................................33
23. Redemption and Termination............................................34
24. Notice of Certain Events..............................................35
25. Notices...............................................................36
26. Supplements and Amendments............................................36
27. Successors............................................................37
28. Determinations and Actions by the Board of Directors, etc.............37
29. Benefits of this Agreement............................................37
30. Severability..........................................................38
31. Governing Law.........................................................38
32. Counterparts..........................................................38
33. Descriptive Headings..................................................38
Exhibit A - Form of Resolutions Establishing Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
-ii-
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 10, 1988, as amended and
restated as of July 19, 1996 (the "Agreement"), between Battle Mountain Gold
Company, a Nevada corporation (the "Company"), and The Bank of New York, as
successor rights agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on November 10, 1988 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
of one Right (as hereinafter defined) for each share of common stock, par value
$0.10 per share, of the Company (the "Common Stock") outstanding at the close of
business on November 21, 1988 (the "Record Date"), and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(p) hereof) for each share of Common Stock issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter defined) and, in
certain circumstances, after the Distribution Date, each Right initially
representing the right to purchase one one-hundredth of a share of Series A
Junior Participating Preferred Stock of the Company having the rights, powers
and preferences set forth in the Form of Resolutions Establishing Designation,
Preferences and Rights of Series A Junior Participating Preferred Stock of the
Company attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
WHEREAS, the Rights Agreement, as originally executed and delivered,
was amended as of July 30, 1992 to reflect the resignation of NationsBank of
Texas, N.A. (formerly NCNB Texas National Bank) as Rights Agent and the
appointment of The Bank of New York as successor Rights Agent and to make
certain changes to the Rights Agreement in connection therewith;
WHEREAS, the Company wishes to supplement the Rights Agreement
pursuant to Section 26 thereof to make changes contemplated by the Combination
Agreement dated as of March 11, 1996, as amended and restated (the "Combination
Agreement") by and between the Company and Hemlo Gold Mines Inc., an Ontario
Corporation to be renamed Battle Mountain Canada Ltd. ("Battle Mountain
Canada"), and certain other changes that the Company has determined to be
appropriate, and the Company has determined that the foregoing shall be
reflected in an amended and restated Rights Agreement and has directed the
Rights Agent pursuant to the first sentence of Section 26 hereof to enter into
such amended and restated Rights Agreement with the Company; and
WHEREAS, the Company is on July 19, 1996 increasing the authorized
number of shares of Preferred Stock by filing a Certificate of Amendment of
Certificate of Resolution Establishing Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock with the Secretary of State of
Nevada;
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NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 20 percent or more of the shares of Common Stock then outstanding, but shall
not include the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan; PROVIDED, however, that a Person shall not be or become an
Acquiring Person if such Person, together with its Affiliates and Associates,
shall become the Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding solely as a result of a reduction in the number of shares of
Common Stock or Exchangeable Shares outstanding due to the repurchase or other
acquisition of Common Stock or Exchangeable Shares by the Company or any
Subsidiary thereof (including Battle Mountain Canada), unless and until such
time as such Person or any Affiliate or Associate of such Person shall purchase
or otherwise become the Beneficial Owner of additional shares of Common Stock
(including as a result of becoming the Beneficial Owner of additional
Exchangeable Shares) constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are) the
Beneficial Owner of shares of Common Stock (including as a result of becoming
the Beneficial Owner of Exchangeable Shares) constituting 1% or more of the then
outstanding shares of Common Stock shall become an Affiliate or Associate of
such Person, unless, in either such case, such Person, together with all
Affiliates and Associates of such Person, is not then the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding; and PROVIDED,
FURTHER, that if the Board of Directors, with the concurrence of a majority of
the members of the Board of Directors who are not, and are not representatives,
nominees, Affiliates or Associates of, such Person or an Acquiring Person,
determines in good faith that a Person that would otherwise be an "Acquiring
Person" has become such inadvertently (including, without limitation, because
(i) such Person was unaware that it beneficially owned a percentage of Common
Stock that would otherwise cause such Person to be an "Acquiring Person" or (ii)
such Person was aware of the extent of its Beneficial Ownership of Common Stock
but had no actual knowledge of the consequences of such Beneficial Ownership
under this Agreement) and without any intention of changing or influencing
control of the Company, and if such Person as promptly as practicable divested
or divests itself of Beneficial Ownership of a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring Person," then
such Person shall not be deemed to be or to have become an "Acquiring Person"
for any purposes of this Agreement; and PROVIDED, further that neither Noranda
Inc., an Ontario corporation, or Kerr Addison Mines Limited, a wholly owned
subsidiary of Noranda, Inc. (collectively, "Noranda"), nor any Affiliate or
Associate of Noranda who is such at the date of the consummation of the
Arrangement referred to in the Combination Agreement and who is not, in fact,
acting in concert with Noranda with respect to Exchangeable Shares or Common
Stock, shall be or become an Acquiring Person solely as a result of Noranda or
any such Affiliate or Associate
-2-
becoming the Beneficial Owner of (x) Exchangeable Shares upon consummation of
the Arrangement referred to in the Combination Agreement or Common Stock
acquired in exchange therefor or (y) Exchangeable Shares or Common Stock through
the acquisition of options to purchase the same granted by the Company or Battle
Mountain Canada in connection with the consummation of the Combination Agreement
or of Exchangeable Shares or Common Stock acquired upon exercise of such options
or Common Stock acquired in exchange for such Exchangeable Shares, but may
thereafter become an Acquiring Person if Noranda or any Affiliate or Associate
of Noranda (excluding the Company or any Subsidiary of the Company) shall
purchase or otherwise become the Beneficial Owner of any additional shares of
Common Stock (including as a result of becoming the Beneficial Owner of
additional Exchangeable Shares) or any other Person (or Persons) who is (or
collectively are) the Beneficial Owner of any shares of Common Stock shall
become an Affiliate or Associate of Noranda unless (x) in either such case,
Noranda, together with all Affiliates and Associates of Noranda, is not then the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding,
or (y) in case Noranda, together with all Affiliates and Associates of Noranda,
becomes the Beneficial Owner of such additional shares of Common Stock
(including as a result of becoming the Beneficial Owner of additional
Exchangeable Shares) as a result of the acquisition by it of another Person or
another Person (or Persons) who is (or are) such Beneficial Owners become an
Affiliate or Associate of Noranda as a result of a BONA FIDE transaction
undertaken primarily for another purpose not related to the acquisition of
Beneficial Ownership of Common Stock (including acquisition of Beneficial
Ownership of Exchangeable Shares) and not for any purpose or with any effect of
changing or influencing control of the Company, Noranda (or such Affiliate or
Associate) as promptly as practical divests or causes to be divested such
additional shares (the determination of whether such a transaction is BONA FIDE
and for such purposes and whether such divestiture is as promptly as practicable
to be made in good faith by the Board of Directors, with the concurrence of a
majority of the members of the Board of Directors who are not representatives,
nominees, Affiliates or Associates of Noranda) or (z) such additional shares are
acquired pursuant to any employee or director share purchase, option or other
benefit plan of the Company or any Subsidiary thereof. In addition, (i) Noranda
shall not be or become an Acquiring Person by reason of any increase in
Beneficial Ownership of shares of Common Stock or Exchangeable Shares solely as
a result of a reduction in the number of shares of Common Stock or Exchangeable
Shares outstanding due to the purchase or other acquisition of Common Stock or
Exchangeable Shares by the Company or any Subsidiary thereof (including Battle
Mountain Canada), and (ii) the terms of the second proviso of the immediately
preceding sentence shall apply to Noranda and any Affiliate or Associate of
Noranda.
(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 and in effect on the date of
this Agreement (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time or the
occurrence of an event) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants or options, or
otherwise; PROVIDED, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, or (B) securities issuable upon
exercise of Rights or Corresponding Rights (as defined in Section 11(n))
at any time prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights or Corresponding Rights from
and after the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing;
PROVIDED, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", any security under this subparagraph
(ii) as a result of an agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(i.e., not including a solicitation exempted by Rule 14a-2(b)(2) of the
General Rules and Regulations under the Exchange Act) proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act and
(B) 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 of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the Company or
Exchangeable Shares;
provided, however, that nothing in this definition shall cause a person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own", any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition. For purposes of
this Agreement, "voting" a security shall include voting, granting a proxy,
acting by consent, making a request or demand relating to corporate action
(including, without limitation, calling a meeting of stockholders)
-4-
or otherwise giving an authorization (within the meaning of Section 14(a) of the
Exchange Act as in effect on July 15, 1996) in respect of such security.
Notwithstanding any other provision of this Agreement, whenever reference is
made in this Agreement to Beneficial Ownership of, or a Person beneficially
owning, a specified percentage of the outstanding shares of Common Stock
(including for purposes of determining whether any Person is an Acquiring Person
or a Person described in Section 11(a)(ii)(B) hereof), such percentage shall be
computed by treating each outstanding Exchangeable Share as though it were an
outstanding share of Common Stock (both for purposes of determining the number
of shares of Common Stock Beneficially Owned by such Person and the number of
shares of Common Stock outstanding), PROVIDED, however, that shares of Common
Stock or Exchangeable Shares held by the Company or any Subsidiary of the
Company (including Battle Mountain Canada) shall not be deemed to be outstanding
for such purpose.
(d) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Texas or the State of New
York are authorized or obligated by law or executive order to close.
(e) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; PROVIDED, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Common Stock" shall mean the common stock, $0.10 par value, of
the Company, except that "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.
(g) "Exchangeable Shares" shall mean the Exchangeable Shares of
Battle Mountain Canada.
(h) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(i) "Final Expiration Date" shall mean the close of business on
November 10, 1998.
(j) "Flip-In Event" shall mean any event described in Section
11(a)(ii) (A), (B) or (C) hereof.
(k) "Flip-Over Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) hereof, but excluding any transaction described in
Section 13(d) hereof that causes the Rights to expire.
-5-
(l) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(m) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company and, to
the extent that there is not a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, par value $1.00 per share, of the
Company designated for such purpose containing terms substantially similar to
the terms of the Series A Junior Participating Preferred Stock.
(n) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(o) "Subsidiary" shall mean, with reference to any Person, any
corporation or other Person of which an amount of voting securities sufficient
to elect at least a majority of the directors or other persons performing
similar functions is beneficially owned, directly or indirectly, by such Person,
or otherwise controlled by such Person.
(p) "Triggering Event" shall mean any Flip-In Event or any Flip-Over
Event.
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 holders of 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.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth day
after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date) or (ii) the close of business on the tenth Business Day (or such
later date as may be determined by the Company's Board of Directors before the
Distribution Date occurs) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, if upon consummation thereof, such Person would be the Beneficial Owner of
30 percent or more of the shares of Common Stock then outstanding (the earlier
of (i) and (ii) 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
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certificates for the Common Stock registered in the names of the holders of the
Common Stock and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company or any Subsidiary of the
Company). 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 (other
than any Person referred to in the first sentence of Section 7(e) hereof), at
the address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(p) hereof, at the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of Common Stock as
of the close of business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date or the earlier
surrender for transfer thereof, the Rights associated with the shares of Common
Stock represented by such certificates shall be evidenced by such certificates
for Common Stock together with a copy of the Summary of Rights, and the
registered holders of Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration
Date, the transfer of any of the certificates for Common Stock outstanding on
the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
that are issued (whether originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date or, in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates issued for shares of Common Stock that
shall so become outstanding or shall be transferred or exchanged after the
Record Date but prior to the earlier of the Distribution Date or the Expiration
Date shall also be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Battle
Mountain Gold Company (the "Company") and The Bank of New York (as
successor Rights Agent), dated as of November 10, 1988, as amended (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 the
Company. Under
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certain circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Company or the Rights Agent will mail to the
holder of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, will become null and
void and will no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with Common Stock represented by such certificates shall be evidenced
by such certificates alone and registered holders of Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
Common Stock represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof), when, as and if issued,
shall be substantially in the form set forth in Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation system
on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as shall be set forth therein at
the price set forth therein (such exercise price per one one-hundredth of a
share, the "Purchase Price"), but the amount and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a
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transfer that the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding that has as a primary purpose or effect
avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend, modified as applicable to
apply to such Person:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby will become null and
void in the circumstances specified in Section 7(e) of such
Agreement.
The provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Rights Certificate. The
Company shall give notice to the Rights Agent promptly after it becomes aware of
the existence of any Acquiring Person or any Associate or Affiliate thereof.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any 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, either manually or by
facsimile signature, 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 Certificate 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 its stock transfer department or such office or offices
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, 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 and the certificate
number and the date of each of the Rights Certificates.
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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 4(b), Section 7(e), Section
13(d) and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) thereof or of the Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon the Rights Agent shall, subject
to Section 4(b), Section 7(e), Section 13(d) and Section 14 hereof, 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 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, subject to Section 4(b), Section 7(e), Section
13(d) and Section 14 hereof, 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) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly
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executed, to the Rights Agent at the stock transfer department or the office or
offices of the Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total number of one
one-hundredths of a share of Preferred Stock (or other securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the Final Expiration Date, (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof and
(iii) the time at which the Rights expire pursuant to Section 13(d) hereof (the
earlier of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $60, and
shall be subject to adjustment from time to time as provided in Sections 11 and
13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per one one-hundredth of a share of
Preferred Stock (or other shares, securities, cash or other assets, as the case
may be) to be purchased as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-hundredths of a share of
Preferred Stock to be purchased, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of one
one-hundredths of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii) 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) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the Purchase Price
(as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be
made by certified bank check, bank cashier's or official bank check or money
order payable to the order of the Company or the Rights Agent. In the event that
the Company is obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section 11(a)
or Section 13(a) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights
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remaining unexercised shall be issued by the Rights Agent and 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, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Flip-In Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise, and such Rights shall not be transferable. The Company
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF 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 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 deliver all
cancelled Rights Certificates to the Company, or at the written request of the
Company, may (but shall not be required to) destroy such cancelled Rights
Certificates.
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Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, as provided in this Agreement, including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange or quoted on any trading system, the Company shall use its
best efforts to cause, from and after such time as the Rights become exercisable
(but only to the extent that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be listed on such exchange,
or quoted on such system, upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Flip-In
Event on which the consideration to be delivered by the Company upon exercise of
the Rights has been determined pursuant to this Agreement (including in
accordance with Section 11(a)(iii) hereof), or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed 90 days after the date set forth in clause (i) of the
first sentence of this Section 9(c), the exercisability of the Rights in order
to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise
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of Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Rights Certificates
and of any certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax that may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of 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 a number of
one one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) 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.
Section 10. PREFERRED STOCK RECORD HOLDER. Each person in whose name
any certificate for a number of one one-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such shares (fractional or otherwise) of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; PROVIDED, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
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 and kind of shares or other
securities subject to purchase upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
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(a)(i)In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive, upon payment
of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open, he would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, 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) hereof.
(ii) Subject to Section 23 of this Agreement, in the event:
(A) any Acquiring Person or any Associate or Affiliate of an
Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, (1) shall merge into the Company or
consolidate or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger or
combination and, in connection with such merger or combination, the
outstanding shares of Common Stock of the Company shall not be
changed into or exchanged for stock or other securities of the
Company or any other Person or cash or any other property, (2)
shall, in one transaction or a series of transactions, other than in
connection with the exercise of a Right or Rights and other than in
connection with the exercise or conversion of securities exercisable
for or convertible into securities of the Company which securities
were outstanding prior to the time such Acquiring Person became
such, transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for shares of Common
Stock, for shares of other equity securities of the Company, or for
securities exercisable for or convertible into shares of equity
securities of the Company (Common Stock or otherwise) or otherwise
obtain from the Company, with or without consideration, any
additional shares of such equity securities or securities
exercisable for or convertible into shares of such equity securities
(other than pursuant to a pro rata offer or distribution to all
holders of Common Stock), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in
one transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of its
-15-
Subsidiaries, assets on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party, other than pursuant to
a transaction set forth in Section 13(a) hereof, (4) shall receive
any compensation from the Company or any of the Company's
Subsidiaries other than compensation for employment as a regular
employee, or fees for serving as a director, at rates in accordance
with the Company's (or its Subsidiaries') past practices, or (5)
shall receive the benefit, directly or indirectly (except
proportionately as a stockholder and except if resulting from a
requirement of law or governmental regulation), of any loans,
advances, guarantees, pledges or other financial assistance provided
by the Company or any of its Subsidiaries, or
(B) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms
of any such plan), alone or together with its Affiliates and
Associates, shall, at any time after the Rights Dividend Declaration
Date, become the Beneficial Owner of 30 percent or more of the
shares of Common Stock then outstanding, unless the event causing
the 30 percent threshold to be crossed is a FlipOver Event, or is an
acquisition of shares of Common Stock pursuant to a tender offer or
an 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 and
who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person, after receiving advice from one or more
investment banking firms, to be (a) at a price and on terms that are
fair to stockholders (taking into account all factors that such
members of the Board deem relevant including, without limitation,
prices that could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of the Company and
its stockholders, and PROVIDED that a Person shall not be deemed to
have become the Beneficial Owner of 30 percent or more of the shares
of Common Stock then outstanding for the purposes of this Section
11(a)(ii)(B) solely as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of Common
Stock by the Company or the repurchase or other acquisition of
Exchangeable Shares by the Company or any Subsidiary thereof
(including Battle Mountain Canada), unless and until such time as
such Person or any Affiliate or Associate of such Person shall
become the Beneficial Owner of any additional shares of Common Stock
(including as a result of being the Beneficial Owner of Exchangeable
Shares) or any other Person who is the Beneficial Owner of any
shares of Common Stock (including as a result of being the
Beneficial Owner of Exchangeable Shares) shall become an Affiliate
or Associate of such Person, if after giving effect to such
additional shares or the shares beneficially owned by such other
Person, such Person, together with all Affiliates and Associates of
such Person, shall be the Beneficial Owner of 30 percent or more of
the shares of Common Stock then outstanding, or
-16-
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any
other transaction or series of transactions involving the Company or
any of its Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person), other than a transaction or
transactions to which the provisions of Section 13(a) apply, that
has the effect, directly or indirectly, of increasing by more than 1
percent the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its Subsidiaries
(treating the Common Stock and the Exchangeable Shares as
equivalents) that is directly or indirectly beneficially owned by
any Acquiring Person or any Associate or Affiliate of any Acquiring
Person,
then, promptly following five days after the date of the occurrence of any
event described in Section 11(a)(ii)(B) hereof and promptly following the
occurrence of any event described in Section 11(a)(ii)(A) or (C) hereof,
each holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a share of
Preferred Stock, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Flip-In Event and (y) dividing that product (which
product, following such first occurrence, shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50 percent of the current market price (determined pursuant
to Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares");
PROVIDED that the Purchase Price and the number of Adjustment Shares shall
be further adjusted as provided in this Agreement to reflect any events
occurring after the date of such first occurrence.
(iii) In the event that the number of shares of Common Stock that is
authorized by the Company's Restated Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall, to the extent permitted by applicable law and
regulation, (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (computed using the current
market price used to determine the number of Adjustment Shares) (the
"Current Value") over (2) the Purchase Price (such excess is herein
referred to as the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon the
exercise of the Rights and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock (including, without limitation, the
Preferred Stock) that the Board
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of Directors of the Company has deemed to have the same value as shares of
Common Stock (such shares of preferred stock are herein referred to as
"common stock equivalents")), (4) debt securities of the Company, (5)
other assets or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice
of a nationally recognized investment banking firm selected by the Board
of Directors of the Company; PROVIDED, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of a
Flip-In Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred
to herein as the "Flip-In Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock
(to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the 30-day period set forth
above may be extended to the extent necessary, but not more than 90 days
after the Flip-In Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent
that the Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of Common
Stock shall be the current market price (as determined pursuant to Section
11(d) hereof) per share of the Common Stock on the Flip-In Trigger Date
and the value of any "common stock equivalent" shall be deemed to have the
same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
45 calendar days after such record date) Preferred Stock (or shares having the
same rights, privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into Preferred Stock
or equivalent preferred stock at a price per share of Preferred Stock or per
share of equivalent preferred stock (or having a conversion price per share, if
a security convertible into Preferred Stock or equivalent preferred stock) less
than the current market price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock 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
-18-
a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock that the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration, part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred 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) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly or semiannual cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than Preferred Stock)
or subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per share of Preferred Stock. Such adjustments shall be
made successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d)(i)For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price" per
share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the
-19-
10 consecutive Trading Days immediately following such date; PROVIDED,
however, that in the event that the current market price per share of
Common Stock is determined during a period following the announcement by
the issuer of such Common Stock of (A) a dividend or distribution on such
Common Stock (other than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the expiration of
the requisite 30 Trading Day or 10 Trading Day period, as set forth above,
after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then,
and in each such case, the "current market price" shall be properly
adjusted to take into account ex-dividend trading. The closing price for
each day shall be the last sales price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange, or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading, or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the
last quoted sales 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
Nasdaq Stock Market ("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 in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall mean
a day on which the principal national securities exchange on which the
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 is not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for Common Stock in clause (i) of this Section
11(d) (other than the last sentence thereof). If the current market price
per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d), the "current
market price" per share of Preferred Stock shall be conclusively deemed to
be an amount equal to 100 (as such number may be appropriately adjusted
for such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share of the Common
Stock. If neither Common Stock nor
-20-
Preferred Stock is publicly held or so listed or traded, "current market
price" per share of Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent. For all purposes of this Agreement, the "current market price" of
one one-hundredth of a share of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by 100.
(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 one percent 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 of Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
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 one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (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 lieu of any adjustment in
the number of one one-hundredths
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of a share of Preferred 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 one one-hundredths of a share of Preferred 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 one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the 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 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
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 of 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 one one-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-hundredth of a
share and the number of one-hundredths of a share 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 or stated value, if any, of the
number of one one-hundredths of a share of Preferred Stock or of the number of
shares of Common Stock or other securities issuable upon exercise of a Right,
the Company shall take any corporate action that may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue as
fully paid and nonassessable shares such number of one one-hundredths of a share
of Preferred Stock or such number of shares of Common Stock or other securities
at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number
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of one one-hundredths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; PROVIDED, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company 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 in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock,
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o) hereof), (iii)
sell, lease or transfer (or permit any Subsidiary to sell, lease or transfer),
in one transaction, or a series of related transactions, assets or earning power
aggregating more than 50 percent of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof) or (iv) engage in any transaction
described in Section 11(a)(ii)(A) or (C) hereof, if (x) at the time of or
immediately after such consolidation, merger, sale, lease, transfer or
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements, arrangements or understandings in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or the corresponding rights associated with the
Exchangeable Shares (the "Corresponding Rights") issued pursuant to the Rights
Agreement dated as of July 19, 1996 between Battle Mountain Canada and The R-M
Trust Company (the "Battle Mountain Canada Rights Agreement"), (y) prior to,
simultaneously with or immediately after such consolidation, merger, sale,
lease, transfer or transaction, the stockholders or other equity owners of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights or
Corresponding Rights previously owned by such Person or any of its Affiliates or
Associates, or (z) the form or nature of organization of the Principal Party
would preclude or limit the exercise of Rights or Corresponding Rights or
otherwise substantially diminish or eliminate the benefits intended to be
afforded by the Rights or Corresponding Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will
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diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights or the Corresponding Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration 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 shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, 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 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
following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or Section 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
Preferred Stock and the Common Stock, a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each registered holder of a certificate representing
shares of Common Stock) in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, on or after the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof) and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of the Company
or any other Person or cash or any other property, or (z) the Company shall
sell, lease or otherwise transfer (or one or more of its Subsidiaries shall
sell, lease or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50 percent of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any Person or Persons (other than the Company or any Subsidiary of the
Company or any combination thereof in one or more transactions
-24-
each of which complies (and all of which together comply) with Section 11(o)
hereof), then, and in each such case (except as may be contemplated by Section
13(d) hereof), proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Flip-Over Event (or, if a Flip-In Event has occurred prior to
the first occurrence of a Flip-Over Event, multiplying the number of such one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Flip-In Event by the Purchase
Price in effect immediately prior to such first occurrence), and dividing that
product (which, following the first occurrence of a Flip-Over Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50 percent of the current market price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Flip-Over Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such FlipOver
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first occurrence of a
Flip-Over Event; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction 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; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Flip-Over Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), (A) the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer the Common Stock of which has the greatest
aggregate market value, or (B) if no securities are so issued, (x) the
Person that survives such consolidation or is the other party to the
merger and survives such merger, or, if there is more than one such
Person, the Person the Common Stock of which has the greatest aggregate
market value or (y) if the Person that is the other party to the merger
does not survive the merger, the Person that does survive the merger
(including the Company if it survives); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions, or, if each Person that
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is a party to such transaction or transactions receives the same portion
of the assets or earning power so transferred, or, if the Person receiving
the greatest portion of the assets or earning power cannot be determined,
the Person the Common Stock of which has the greatest aggregate market
value;
PROVIDED, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act, and if (1) such Person
is a direct or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such other
Person; (2) such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of all 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) 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 Flip-Over Event unless the
Principal Party (or Person that may become a Principal Party as a result of such
Flip-Over Event) shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and the
Corresponding Rights in accordance with Section 13 of the Battle Mountain Canada
Rights Agreement and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
(and to the rights agent under the Battle Mountain Canada Rights Agreement a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of Section 13 of the Battle Mountain Canada Rights Agreement) and further
providing that, as soon as practicable after the date of such Flip-Over Event,
the Principal Party at its own expense will
(i) (x) prepare and file a registration statement under the Act with
respect to the Rights and the Corresponding Rights and the securities
purchasable upon exercise of the Rights and the Corresponding Rights on an
appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date and (y) take such
action as may be appropriate under, and to ensure compliance with, the
laws of Canada and the various provinces thereof and securities or "blue
sky" laws of the various states of the United States with respect to the
Rights and the Corresponding Rights and the securities purchasable upon
exercise thereof; and
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(ii) will deliver to holders of the Rights and the Corresponding
Rights historical financial statements for the Principal Party and each of
its Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-Over Event
shall occur at any time after the occurrence of a Flip-In Event, the Rights that
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a cash tender
offer or exchange offer for all outstanding shares of Common Stock that complies
with the provisions of Section 11(a)(ii)(B) hereof (or a wholly owned subsidiary
of any such Person or Persons), (ii) the price per share of Common Stock offered
in such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such cash tender offer or exchange offer, and (iii) the form of consideration
being offered to the remaining holders of shares of Common Stock pursuant to
such transaction is the same as the form of consideration paid pursuant to such
cash tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. 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(p) hereof, or to
distribute Rights Certificates that 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 purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sales price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange, or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted sales 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 is making a market in the Rights
selected by the
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Board of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than, except as provided in Section 7(c) hereof,
fractions that are integral multiples of one one-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute certificates that
evidence fractional shares of Preferred Stock (other than fractions that are
integral multiples of one one-hundredth of a share of Preferred Stock). In lieu
of fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred 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 one one-hundredth of a share of Preferred Stock. For purposes of
this Section 14(b), the current market value of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the closing price of a share of
Preferred 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 a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates that 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 one share of Common Stock. For purposes of this Section
14(c), the current market value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent pursuant
to Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders
of Common Stock and, where applicable, the Company); and any registered holder
of any Rights Certificate (or, prior to the Distribution Date, of 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 Common Stock), may, on his
own behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such 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
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performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be evidenced
by Rights Certificates and 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 principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the form of assignment set forth on the reverse side thereof and the
certificate contained therein duly completed and fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, 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, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. 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 number of one
one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable upon 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
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receive notice of meetings or other actions affecting stockholders (except as
provided in Section 24 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 provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
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 in the premises. The Company's
obligations described in this paragraph shall survive the termination of this
Agreement.
(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 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; PROVIDED, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Rights
Certificate shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a 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 and in this Agreement.
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(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 that 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 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any 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 Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts
-31-
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after receipt of actual knowledge of any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or Preferred 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 Preferred 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 from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; PROVIDED, however, that 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
-32-
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and the Preferred Stock, by registered or
certified mail, and to the 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 and
the Preferred 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. Notwithstanding the foregoing provisions of
this Section 21, in no event shall the resignation or removal of a Rights Agent
be effective until a successor Rights Agent have been appointed and have
accepted such appointment. 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 his Rights Certificate for inspection by the Company),
then the Rights Agent or any 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 corporation organized and doing business under the laws of the
United States or of the State of Texas or of the State of New York (or of any
other state of the United States so long as such corporation is authorized to
conduct a stock transfer or corporate trust business in the State of Texas), in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000. 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 the Preferred 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 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. ISSUANCE OF NEW 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 and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
-33-
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
PROVIDED, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date) or (ii) the Expiration Date, cause the Company to
redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately adjusted, if
necessary, 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"); PROVIDED, however, that the Rights may
not be redeemed following any merger to which the Company is a party that (i)
occurs when there is an Acquiring Person and (ii) was not approved prior to such
merger by the Board of Directors of the Company and by the stockholders of the
Company at a stockholders' meeting. If, following the occurrence of a Stock
Acquisition Date and following the expiration of the right of redemption
hereunder but prior to any Triggering Event, (i) each Person who is an Acquiring
Person shall have transferred or otherwise disposed of a number of shares of
Common Stock in one transaction or series of transactions, not directly or
indirectly involving the Company or any of its Subsidiaries, which did not
result in the occurrence of a Triggering Event such that such Person is
thereafter a Beneficial Owner of 10 percent or less of the outstanding shares of
Common Stock, and (ii) there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are Acquiring Persons, then
the right of redemption set forth in this Section 23(a) shall be reinstated and
thereafter be subject to the provisions of this Section 23. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Flip-In Event until such time as the
Company's right of redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
"current market price", as defined in Section 11(d)(i) hereof, of Common Stock
at the time of redemption) or any other form of consideration deemed appropriate
by the Board of Directors.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the redemption of the Rights (the
effectiveness of which action may be
-34-
conditioned on the occurrence of one or more events or the existence of one or
more facts or may be effective at some future time), 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 for each Right so held. Promptly after the action of the Board of
Directors ordering the 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 all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Company for the Common Stock.
Any notice that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
shall state the method by which the payment of the Redemption Price will be
made.
Section 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly or semiannual cash dividend out
of earnings or retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
the Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or to
effect any sale, lease or other transfer (or to permit one or more of its
Subsidiaries to effect any sale, lease or other transfer), in one transaction or
a series of related transactions, of more than 50 percent of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
or (v) 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, to the extent feasible and in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, lease, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining holders of the shares of Preferred 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 Preferred Stock, whichever shall be the
earlier.
(b) In case any Flip-In Event or Flip-Over Event shall occur, then
(i) the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate (or if
-35-
occurring prior to the Distribution Date, to the registered holders of Common
Stock), in accordance with Section 25 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) or Section 13(a) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities.
Section 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any 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:
Battle Mountain Gold Company
P.O. Box 1383
Houston, Texas 77251-1383
Attention: Corporate Secretary
Subject to provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any 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:
The Bank of New York
101 Barclay Street
12th Floor
New York, NY 10286
Attention: James Dimono, Assistant Treasurer
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 (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) 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 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company may
and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company may and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner that the Company may deem
necessary or
-36-
desirable and that shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person); PROVIDED, that this Agreement may not be supplemented
or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than any Acquiring Person and its
Affiliates and Associates). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment; PROVIDED, however, that the Rights
Agent may, but shall not be obligated to, enter into any such supplement or
amendment that affects the Rights Agent's own rights, duties or immunities under
this Agreement. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made that decreases the Redemption
Price, shortens the Final Expiration Date, increases the initial Purchase Price
or decreases the initial number of one one-hundredths of a share of Preferred
Stock for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall, subject to the last sentence
of Section 1(c), 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 (or, as set forth herein, certain specified
members thereof) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power (i) to interpret the provisions of this
Agreement and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not to redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including
omissions with respect thereto for purposes of clause (y) below) that are done
or made by the Board of Directors of the Company in good faith shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other parties and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders
-37-
of the Rights Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of the
Common Stock); PROVIDED, however, that the registered holders of certificates
evidencing the Corresponding Rights shall be entitled to the rights and benefits
conferred by Section 11(n), Section 11(o) and Section 13(c) hereof (but subject
to all rights of the Company in respect thereof, including pursuant to Section
26 hereof).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors of
the Company.
Section 31. 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 NEVADA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-38-
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: BATTLE MOUNTAIN GOLD COMPANY
/s/ ROBERT J. QUINN By: /s/ R. DENNIS O'CONNELL
Name: Robert J. Quinn Name: R. Dennis O'Connell
Title: Vice President Title: Vice President
Attest: THE BANK OF NEW YORK
/s/ JAMES DIMINO By: /s/ KEVIN BRENNAN
Name: James Dimino Name: Kevin Brennan
Title: Assistent Treasurer Title: Vice President
-39-
EXHIBIT A
FORM OF
RESOLUTION ESTABLISHING DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
BATTLE MOUNTAIN GOLD COMPANY
Pursuant to Section 78.195 of the Nevada Revised Statutes
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation by the Restated Articles of Incorporation, a
series of Preferred Stock, par value $1.00 per share, of the Corporation, be and
hereby is created, and that the designation and number of shares thereof and the
voting and other powers, preferences and relative, participating, optional or
other rights if any of the shares of such series and the qualifications,
limitations and restrictions thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" and the number
of shares constituting such series shall be 2,000,000*.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the 15th day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $2.00
or (b) subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock
- ------------
* Amended to 5,000,000 shares on July 19, 1996.
A-1
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $0.10 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. In the event the Corporation shall at any
time after November 10, 1988 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $2.00 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
A-2
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Participating Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series A Junior Participating Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series A Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A Junior
Participating Preferred Stock) upon which these or like voting rights have been
conferred and are exercisable (the "Voting Preferred Stock") with dividends in
arrears in an amount equal to six quarterly dividends thereon, voting as a
class, irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Voting Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of 10 percent in number of shares of Voting Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Voting Preferred
Stock of such voting right. At any meeting at which the holders of Voting
Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect Directors
to fill such vacancies, if any, in the Board of Directors as may then exist up
to two Directors or, if such right is exercised at an annual meeting, to elect
two Directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Voting Preferred Stock
shall have the right to make such increase in the number of
A-3
Directors as shall be necessary to permit the election by them of the required
number. After the holders of the Voting Preferred Stock shall have exercised
their right to elect Directors in any default period and during the continuance
of such period, the number of Directors shall not be increased or decreased
except by vote of the holders of Voting Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to or PARI PASSU
with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Voting Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 10 percent of the total number of shares
of Voting Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Voting Preferred Stock, which
meeting shall thereupon be called by the President, a Vice President or the
Secretary of the Corporation. Notice of such meeting and of any annual meeting
at which holders of Voting Preferred Stock are entitled to vote pursuant to this
paragraph (C) (iii) shall be given to each holder of record of Voting Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be called for a time
not earlier than 20 days and not later than 60 days after such order or request
or, in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than 10 percent of the total
number of shares of Voting Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C) (iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be entitled
to elect the whole number of Directors until the holders of Voting Preferred
Stock shall have exercised their right to elect two Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
Voting Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided in
paragraph (C) (ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Voting Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Voting
Preferred Stock as a class shall terminate and (z) the number of Directors shall
be such number as may be provided for in the Restated Articles of Incorporation
or by-laws irrespective of any increase made pursuant to the provisions of
paragraph (C) (ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner
A-4
provided by law or in the Restated Articles of Incorporation or by-laws). Any
vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the Series
A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series A Junior Participating Preferred Stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after consideration
of the respective annual
A-5
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
being referred to as the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity
A-6
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. RANKING. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.
Section 10. AMENDMENT. At any time that any shares of Series A
Junior Participating Preferred Stock are outstanding, the Restated Certificate
of Incorporation of the Corporation or the resolution establishing the
designation, preferences and rights of the Series A Junior Participating
Preferred Stock shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more
A-7
of the outstanding shares of Series A Junior Participating Preferred Stock,
voting separately as a class.
Section 11. FRACTIONAL SHARES. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred Stock.
A-8
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER NOVEMBER 10, 1998 OR EARLIER IF REDEEMED BY THE COMPANY.
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. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID AND
NO LONGER BE TRANSFERABLE. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THIS RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY WILL BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]**
Rights Certificate
BATTLE MOUNTAIN GOLD 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 November 10,
1988, as amended and restated as of July 19, 1996 (the "Rights Agreement"),
between Battle Mountain Gold Company, a Nevada corporation (the "Company"), and
The Bank of New York, as successor rights agent (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M. (Houston time) on
November 10, 1998 at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one one-hundredth of a
fully-paid nonassessable share of Series A Junior Participating Preferred Stock
(the "Preferred Stock") of
- ------------
** The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
B-1
the Company, at a purchase price of $60 per one one-hundredth of a share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase set forth on the reverse hereof and the
Certificate contained therein duly executed. The Purchase Price may be paid by
certified bank check, bank cashier's or official bank check or money order
payable to the order of the Company or the Rights Agent. 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 per
share set forth above, are the number and Purchase Price as of November 11,
1988, based on the Preferred Stock as constituted at such date.
Upon the occurrence of a Flip-In Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, concurrently with or after such transfer, became an Acquiring
Person, such Rights shall become null and void and no holder hereof shall have
any rights whatsoever with respect to such Rights from and after the occurrence
of such Flip-In Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities that 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,
including Triggering Events (as such term is defined in the Rights Agreement).
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, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices 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 one one-hundredths of a share of Preferred
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 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.
B-2
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, payable, at the election of the Company, in
cash or shares of Common Stock or such other consideration as the Board of
Directors may determine, at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock Acquisition Date (as such time
period may be extended or shortened pursuant to the Rights Agreement) and (ii)
the Expiration Date (as such term is defined in the Rights Agreement). After the
expiration of the redemption period, the Company's right of redemption may be
reinstated if (i) each Acquiring Person reduces his beneficial ownership to
prescribed levels in a transaction or series of transactions not involving the
Company and (ii) there are no other Acquiring Persons.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof of 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
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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.
B-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _________________, 19_____
ATTEST: BATTLE MOUNTAIN GOLD COMPANY
_________________________________ By_________________________________
[Title] [Title]
Countersigned:
THE BANK OF NEW YORK
By_______________________________
Authorized Signature
B-4
[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:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) 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 an Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
B-5
(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, was or subsequently became an Acquiring Person of an
Affiliate or Associate of an Acquiring Person.
Dated: _________________, 19___ _______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate 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.
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: BATTLE MOUNTAIN GOLD COMPANY
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares (or other
securities) be issued in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated: _______________, 19___ ____________________________________
Signature
B-7
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate are [ ] 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 an 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, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ______________, 19___ ____________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
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.
B-8
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On November 10, 1988, the Board of Directors of Battle Mountain Gold
Company (the "Company") declared a dividend of one Right for each outstanding
share of common stock, par value $0.10 per share (the "Common Stock"), of the
Company to stockholders of record at the close of business on November 21, 1988.
Each Right entitles the registered holder to purchase from the Company a unit
consisting of one one-hundredth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), at a Purchase Price of $60 per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and NCNB Texas National Bank, as Rights
Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
and a "Distribution Date" will occur upon the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20 percent or more of the outstanding shares of Common
Stock (the date of the announcement being the "Stock Acquisition Date"), or (ii)
10 business days (or such later date as may be determined by the Company's Board
of Directors before the Distribution Date occurs) following the commencement of
a tender offer or exchange offer that would result in a person or group
beneficially owning 30 percent or more of such outstanding shares of Common
Stock. Until the Distribution Date, (a) the Rights will be evidenced by the
Common Stock certificates (together with a copy of this Summary of Rights or
bearing the notation referred to below) and will be transferred with and only
with such Common Stock certificates, (b) new Common Stock certificates issued
after November 21, 1988 will contain a notation incorporating the Rights
Agreement by reference and (c) the surrender for transfer of any certificate for
Common Stock outstanding (with or without a copy of this Summary of Rights) will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 10, 1998, unless earlier redeemed by
the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Common Stock as of the close
of business on the Distribution Date and, from and after the Distribution Date,
the separate Rights Certificates alone will represent the Rights. All shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
Shares
C-1
of Common Stock issued after the Distribution Date will be issued with Rights if
such shares are issued pursuant to the exercise of stock options or under an
employee benefit plan. Except as otherwise determined by the Board of Directors,
no other shares of Common Stock issued after the Distribution Date will be
issued with Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and its Common Stock is not changed or
exchanged, (ii) a Person becomes the beneficial owner of 30 percent or more of
the then outstanding shares of Common Stock (except pursuant to a tender or
exchange offer for all outstanding shares of Common Stock at a price and on
terms that a majority of the independent directors of the Company determines to
be fair to and otherwise in the best interests of the Company and its
stockholders), (iii) an Acquiring Person engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, or (iv) during such time as
there is an Acquiring Person, an event involving the Company or a Subsidiary of
the Company occurs that results in such Acquiring Person's ownership interest
being increased by more than 1 percent (E.G., a reverse stock split), at any
time following the Distribution Date, each holder of a Right will thereafter
have the right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right. The Exercise Price is the
Purchase Price multiplied by the number of Units issuable upon exercise of the
Right prior to the events described in this paragraph (initially, one).
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person (or by certain related parties) will be null and void. However,
Rights are not exercisable following the occurrence of any of the events set
forth above until such time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $60 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase $120
worth of Common Stock (or other consideration, as noted above) for $60. Assuming
that the Common Stock had a per share value of $15 at such time, the holder of
each valid Right would be entitled to purchase 8 shares of Common Stock for $60.
In the event that, on or after the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction (other
than a merger described in the second preceding paragraph or a merger which
follows an offer described in the second preceding paragraph), or (ii) 50
percent or more of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the Exercise
Price of the Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events".
C-2
The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1 percent of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred Stock
on the last trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right, payable, at the option of the Company, in cash, shares of Common Stock or
such other consideration as the Board of Directors may determine. After the
redemption period has expired, the Company's right of redemption may be
reinstated prior to the occurrence of any Triggering Event if (i) each Acquiring
Person reduces his beneficial ownership to 10 percent or less of the outstanding
shares of Common Stock in a transaction or series of transactions not involving
the Company and (ii) there are no other Acquiring Persons. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to receive
the $.01 redemption price.
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. While the distribution of the Rights will
most likely not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) or for the
common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board of Directors in order to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement; PROVIDED, HOWEVER, that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
C-3
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. 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.
C-4
BATTLE MOUNTAIN CANADA LTD.
and
THE R-M TRUST COMPANY
Rights Agent
---------------
Rights Agreement
Dated as of July 19, 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............................................5
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....................9
9. Reservation and Availability of Capital Stock.........................10
10. Exchangeable Share Record Holder......................................11
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights................................................................11
12. Certificate of Adjusted Purchase Price or Number of Shares............17
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..17
14. Fractional Rights and Fractional Shares...............................18
15. Rights of Action......................................................19
16. Agreement of Rights Holders...........................................19
17. Rights Certificate Holder Not Deemed a Shareholder....................20
18. Concerning the Rights Agent...........................................21
19. Merger or Consolidation or Change of Name of Rights Agent.............21
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20. Duties of Rights Agent................................................22
21. Change of Rights Agent................................................24
22. Issuance of New Rights Certificates...................................24
23. Redemption and Termination............................................25
24. Notice of Certain Events..............................................25
25. Notices...............................................................26
26. Supplements and Amendments............................................27
27. Successors............................................................28
28. Determinations and Actions by the Board of Directors, etc.............28
29. Benefits of this Agreement............................................28
30. Severability..........................................................28
31. Governing Law.........................................................28
32. Counterparts..........................................................29
33. Descriptive Headings..................................................29
Exhibit A - Form of Rights Certificate
-ii-
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 19, 1996 (the "Agreement"),
between Battle Mountain Canada Ltd., an Ontario corporation (the "Company"), and
The R-M Trust Company (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(a)(i) hereof) for each Exchangeable Share of the
Company (the "Exchangeable Shares") issued between the Effective Date (including
the Exchangeable Shares issued on the Effective Date) and the Distribution Date
(as these terms are hereinafter defined) and, in certain circumstances, after
the Distribution Date, each Right initially representing the right to purchase
one Exchangeable Share upon the terms and subject to the conditions hereinafter
set forth (the "Rights"); and
WHEREAS, as provided in the Combination Agreement dated as of March
11, 1996, as amended and restated, by and between Battle Mountain Gold Company,
a Nevada corporation ("BMG") and the Company, the Rights are intended to provide
rights to acquire additional Exchangeable Shares (or in certain circumstances
other securities) on terms substantially the same as the BMG Rights (as
hereinafter defined) confer the right to acquire shares of Common Stock (as
hereinafter defined) of BMG or preferred stock of BMG that is essentially the
economic equivalent of BMG Common Stock (or in certain circumstances other
securities);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall have the meaning ascribed to that term
in the BMG Rights Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in the BMG Rights Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time or the
occurrence of an event) pursuant to any agreement,
-1-
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, other rights, warrants or
options, or otherwise; PROVIDED, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", (A) securities
tendered pursuant to a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, or (B) securities issuable upon
exercise of Rights or BMG Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon exercise of Rights or
BMG Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing;
PROVIDED, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", any security under this subparagraph
(ii) as a result of an agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(i.e., not including a solicitation exempted by Rule 14a-2(b)(2) of the
General Rules and Regulations under the Exchange Act) proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act and
(B) 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 of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any Exchangeable Shares or voting
securities of BMG;
provided, however, that nothing in this definition shall cause a person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own", any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition. For purposes of
this Agreement, "voting" a security shall include voting, granting a proxy,
acting by consent, making a request or demand relating to corporate action
(including, without limitation, calling a meeting of stockholders) or otherwise
giving an authorization (within the meaning of Section 14(a) of the Exchange Act
as in effect on July 15, 1996) in respect of such security.
-2-
(d) "BMG" shall mean Battle Mountain Gold Company, a Nevada
corporation.
(e) "BMG Rights" shall mean the "Rights" as defined in the BMG
Rights Agreement.
(f) "BMG Rights Agreement" shall mean the Rights Agreement dated as
of November 10, 1988, as amended and restated as of July 19, 1996 (and as it may
be thereafter amended and in effect from time to time) between BMG and The Bank
of New York, as rights agent.
(g) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Texas or the State of New
York are authorized or obligated by law or executive order to close.
(h) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; PROVIDED, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(i) "Common Stock" shall mean the common stock, par value $0.10 per
share, of BMG, except that "Common Stock" when used with reference to any Person
other than BMG shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.
(j) "Effective Date" shall have the meaning assigned to that term in
the Combination Agreement dated as of March 11, 1996, as amended and restated,
by and between BMG and the Company.
(k) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(l) "Final Expiration Date" shall mean the close of business on
November 10, 1998.
(m) "Flip-In Event" shall mean any event described in Section
11(a)(ii) (A), (B) or (C) of the BMG Rights Agreement.
(n) "Flip-Over Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) of the BMG Rights Agreement, but excluding any
transaction described in Section 13(d) thereof that causes the Rights to expire.
(o) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(p) "Stock Acquisition Date" shall have the meaning ascribed to that
term in the BMG Rights Agreement.
-3-
(q) "Subsidiary" shall mean, with reference to any Person, any
corporation or other Person of which an amount of voting securities sufficient
to elect at least a majority of the directors or other persons performing
similar functions is beneficially owned, directly or indirectly, by such Person,
or otherwise controlled by such Person.
(r) "Triggering Event" shall mean any Flip-In Event or any Flip-Over
Event.
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 holders of Exchangeable Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth day
after the Stock Acquisition Date or (ii) the date specified by clause (ii) of
Section 3(a) of the BMG Rights Agreement (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Exchangeable Shares registered in the names of the holders
of the Exchangeable Shares and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
Exchangeable Shares (including a transfer to BMG, the Company or any other
Subsidiary of BMG). 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 Exchangeable Shares as of the close of business on the
Distribution Date (other than any Person referred to in the first sentence of
Section 7(e) hereof), at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially the form of Exhibit A
hereto (the "Rights Certificates"), evidencing one Right for each Exchangeable
Share so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per Exchangeable Share has been made pursuant
to Section 11(a)(i) hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
(b) Rights shall be issued in respect of all Exchangeable Shares
that are issued on or after the Effective Date but prior to the earlier of the
Distribution Date or the Expiration Date or, in certain circumstances provided
in Section 22 hereof, after the Distribution Date. Certificates issued for
Exchangeable Shares that shall so become outstanding or shall be transferred or
exchanged after the Effective Date but prior to the earlier of the Distribution
Date or the Expiration Date shall also be deemed to be certificates for Rights,
and shall bear the following legend:
-4-
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Battle
Mountain Canada Ltd. (the "Company") and The R-M Trust Company (the
"Rights Agent") dated as of July 19, 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 the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company or the Rights Agent will mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, will become null and void and
will no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with Exchangeable Shares represented by such certificates shall be
evidenced by such certificates alone and registered holders of Exchangeable
Shares shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with Exchangeable Shares represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof), when, as and if issued,
shall 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 or quotation system
on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the Effective Date and on
their face shall entitle the holders thereof to purchase such number of
Exchangeable Shares as shall be set forth therein at the price set forth therein
(such exercise price per Exchangeable Share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or
-5-
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
that the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding that has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend, modified as applicable to apply to such
Person:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby will become null and
void in the circumstances specified in Section 7(e) of such
Agreement.
The provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Rights Certificate. The
Company shall give written notice to the Rights Agent promptly after it becomes
aware of the existence of any Acquiring Person or any Associate or Affiliate
thereof.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any 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, either manually or by
facsimile signature, 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 Certificate 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. Promptly upon the occurrence
of a Distribution Date the Company will notify the Rights Agent of such
Distribution Date and will deliver Rights Certificates executed by the Company
to the Rights Agent for countersignature.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its stock transfer department or such office or offices
designated as the appropriate place for
-6-
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder (the
"Rights Register"). 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 and the certificate number and the
date of each of the Rights Certificates. The Rights Agent is hereby appointed
"Rights Registrar" for the purpose of maintaining the Rights Register for the
Company and registering Rights and transfers and exchanges of Rights as herein
provided.
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 4(b), Section 7(e), Section
13(d) and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of Exchangeable Shares
(or, following a Triggering Event, Exchangeable Shares, other securities, cash
or other assets, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitled such holder (or former holder in the case
of a transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof or of the
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
13(d) and Section 14 hereof, 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 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 prior to the
Expiration Date 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, subject to Section 4(b),
Section 7(e), Section 13(d) and Section 14 hereof, 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.
-7-
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c) and Section 23(a) hereof) in whole or
in part at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the stock transfer
department or the office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of Exchangeable Shares (or other securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the Final Expiration Date, (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof and
(iii) the time at which the Rights expire pursuant to Section 13(d) hereof (the
earlier of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each Exchangeable Share pursuant to the
exercise of a Right shall initially be U.S.$60, and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per Exchangeable Share (or other shares,
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax or charge which
may be payable in respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance and delivery of certificates for
Exchangeable Shares in a name other than that of the holder of the Rights being
exercised, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) requisition from any transfer agent of the Exchangeable Shares (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of Exchangeable Shares to be purchased, and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such payment, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made by
certified bank check, bank cashier's or official bank check or money order
payable to the order of the Company or the Rights Agent. In the event that the
Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) or Section 13(a) hereof, the
Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and
when appropriate.
-8-
(d) In case the registered holder of any Rights Certificate shall
exercise 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, 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, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Flip-In Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise, and such Rights shall not be transferable. The Company
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF 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 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 deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such
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cancelled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Exchangeable
Shares (and, following the occurrence of a Triggering Event, any other
securities whether out of its authorized and unissued shares or authorized and
issued shares held in its treasury) the number of Exchangeable Shares (and,
following the occurrence of a Triggering Event, any other securities) that, as
provided in this Agreement, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the Exchangeable Shares (and, following the
occurrence of a Triggering Event, any other securities) issuable and deliverable
upon the exercise of the Rights may be listed on any securities exchange in
Canada or quoted on any trading system, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable (but only to
the extent that it is reasonably likely that the Rights will be exercised), all
shares reserved for such issuance to be listed on such exchange, or quoted on
such system, upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts, if necessary, to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Flip-In Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined pursuant to this
Agreement (including in accordance with Section 11(a)(iii) hereof), or as soon
as is required by law following the Distribution Date, as the case may be, a
registration statement under the Securities Act of 1933, as amended (the "Act"),
with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities and (B) the Expiration
Date. The Company will also take such action as may be appropriate under, or to
ensure compliance with, the laws of Canada and the various provinces thereof and
securities or "blue sky" laws of the various states in the United States in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
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(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Exchangeable Shares (and,
following the occurrence of a Triggering Event, any other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all United States and Canadian federal, state and
provincial transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Rights Certificates and of any certificates for
Exchangeable Shares (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
that may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of Exchangeable
Shares (or other securities, as the case may be) in respect of 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
Exchangeable Shares (or other securities, as the case may be) 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.
Section 10. EXCHANGEABLE SHARE RECORD HOLDER. Each person in whose
name any certificate for Exchangeable Shares (or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of such Exchangeable Shares (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; PROVIDED, however, that if the date of such
surrender and payment is a date upon which the Exchangeable Share (or other
securities, as the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Exchangeable Share (or other securities, as
the case may be) transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights Certificate, as such,
shall not be entitled to any rights of a shareholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other
securities subject to purchase upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
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(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Exchangeable Shares payable
in Exchangeable Shares, (B) subdivide the outstanding Exchangeable Shares,
(C) combine the outstanding Exchangeable Shares into a smaller number of
shares or (D) after the effectiveness of any adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) of the BMG Rights Agreement issue any
shares of its capital stock in a reclassification of the Exchangeable
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
Exchangeable Shares or other securities, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive, upon payment
of the Purchase Price then in effect, the aggregate number and kind of
Exchangeable Shares or other securities, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a time
when the Exchangeable Share (or other securities, as the case may be)
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 if
the record date for any such dividend, subdivision or combination shall
occur prior to the Distribution Date, then (in addition to the adjustments
hereinabove prescribed in this Section 11(a)(i)), the number of Rights
associated with each Exchangeable Share 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 Exchangeable Share following any such event shall
equal the result obtained by multiplying the number of Rights associated
with each Exchangeable Share immediately prior to such event by a fraction
the numerator of which shall be the total number of Exchangeable Shares
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of Exchangeable Shares
outstanding immediately following the occurrence of such event. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) If any adjustment shall be made pursuant to Section 11(a)(ii)
of the BMG Rights Agreement, there shall at the same time be made a
corresponding adjustment to the Rights so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the current Purchase
Price in accordance with the terms of this Agreement, in lieu of the
number of Exchangeable Shares for which such Right was theretofore
exercisable, such number of Exchangeable Shares as shall equal the number
of shares of BMG Common Stock for which each BMG Right is exercisable
following such adjustment multiplied by the ratio of the number of BMG
Rights then associated with each share of Common Stock to the number of
Rights then associated with each Exchangeable Share and the Purchase Price
shall thereafter be adjusted
-12-
to the "Purchase Price" in effect under the BMG Rights Agreement following
the corresponding adjustment thereunder; PROVIDED that the Purchase Price
and the number of Exchangeable Shares issuable upon exercise of a Right
shall be further adjusted as provided in this Agreement to reflect any
events occurring after the date of such adjustment.
(b) If any adjustment shall be made pursuant to Section 11(b) of the
BMG Rights Agreement (including any such adjustment resulting from the
application of Section 11(f) hereof), then, in connection with the issuance of
rights, options or warrants to holders of Exchangeable Shares corresponding to
the issuance of rights, options or warrants to the holders of Common Stock which
occasioned such adjustment, the Purchase Price to be in effect after the record
date for the issuance of such rights, options or warrants or to the holders of
Exchangeable Shares shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by the same fraction by which the
"Purchase Price" under Section 11(b) of the BMG Rights Agreement is multiplied
to effect the corresponding adjustment thereunder. In the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) If any adjustment shall be made pursuant to Section 11(c) of the
BMG Rights Agreement (including any such adjustment resulting from the
application of Section 11(f) hereof), then, in connection with the distribution
of evidences of indebtedness, cash, assets or subscription rights or warrants to
holders of Exchangeable Shares corresponding to the distribution to the holders
of Common Stock which occasioned such adjustment, the Purchase Price to be in
effect after the record date for the distribution of such evidences of
indebtedness, cash, assets or subscription rights or warrants to the holders of
Exchangeable Shares shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by the same fraction by which the
"Purchase Price" under Section 11(c) of the BMG Rights Agreement is multiplied
to effect the corresponding adjustment thereunder. In the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) For the purpose of any computation hereunder, the "current
market price" per Exchangeable Share on any date shall be deemed to be the
average of the daily closing prices per share of such Exchangeable Shares for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, PROVIDED, however, that in the event that the
current market price per Exchangeable Share is determined during a period
following the announcement of (A) a dividend or distribution on such
Exchangeable Shares (other than the Rights), or (B) any subdivision, combination
or reclassification of such Exchangeable Share, and prior to the expiration of
the requisite 30 Trading Day period, as set forth above, after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sales 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
-13-
listed or admitted to trading on The Toronto Stock Exchange, or, if the
Exchangeable Shares are not listed or admitted to trading on The Toronto Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal securities exchange in Canada
on which the Exchangeable Shares are listed or admitted to trading, or, if the
Exchangeable Shares are not listed or admitted to trading on any securities
exchange in Canada, the last quoted sales 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 NASDAQ Stock Market. Automated Quotations System ("NASDAQ") or
such other system then in use, or, if on any such date the Exchangeable Shares
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Exchangeable Shares selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Exchangeable Shares, the
fair value of such shares on such date as determined in good faith by the Board
of Directors of the Company shall be used. The term "Trading Day" shall mean a
day on which the principal securities exchange in Canada on which the
Exchangeable Shares are listed or admitted to trading is open for the
transaction of business or, if the Exchangeable Shares are not listed or
admitted to trading on any securities exchange in Canada, a Business Day. If the
Exchangeable Shares are not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent 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 U.S.$.01 or to the nearest ten-thousandth of an Exchangeable Share,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates such
adjustment, (ii) the Expiration Date or (iii) the time when the corresponding
adjustment is made under the BMG Rights Agreement.
(f) If as a result of an adjustment made pursuant to Section 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Exchangeable Shares, thereafter
the number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Exchangeable Shares contained in Sections 11(a), (b), (c), (e),
(g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and
14 hereof with respect to the Exchangeable Shares shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase
-14-
Price, the number of Exchangeable Shares purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Exchangeable Shares
(calculated to the nearest one ten-thousandth) obtained by (i) multiplying (x)
the number of Exchangeable Shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of Exchangeable Shares 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 Exchangeable Shares for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement, with simultaneous written
notice to the Rights Agent, 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 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the 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 of 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 Exchangeable Shares 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 Exchangeable Shares which
were expressed in the initial Rights Certificates issued hereunder.
-15-
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value or stated value, if any, of the
number of Exchangeable Shares issuable upon exercise of a Right, the Company
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue as fully paid
and nonassessable shares such number of Exchangeable Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of Exchangeable Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
Exchangeable Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; PROVIDED, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company 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 in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Exchangeable Shares, (ii) issuance wholly for cash of any
Exchangeable Shares at less than the current market price, (iii) issuance wholly
for cash of Exchangeable Shares or securities that by their terms are
convertible into or exchangeable for Exchangeable Shares, (iv) stock dividends
or (v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of Exchangeable Shares, shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate or amalgamate with any other
Person, (ii) merge with or into any other Person or (iii) sell, lease or
transfer (or permit any Subsidiary to sell, lease or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50 percent of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale, lease or transfer there are
any rights, warrants or other instruments or securities outstanding or
agreements, arrangements or understandings in effect that would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights, (y) prior to, simultaneously with or immediately after such
consolidation, merger, sale, lease or transfer, the stockholders or other equity
owners of the Person who constitutes, or would constitute, the "Principal Party"
for purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates or Associates,
or (z) the form or nature of organization of the Principal Party would preclude
or limit the exercise of
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Rights or otherwise substantially diminish or eliminate the benefits intended to
be afforded by the Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that any adjustment is made under Section 11 or 13 of the BMG Rights
Agreement and the corresponding adjustment to be made under this Section 11 or
Section 13 hereof by reason of the events requiring the adjustment under the BMG
Rights Agreement does not result in conferring upon the holders of the Rights
the right to acquire additional Exchangeable Shares (or in certain circumstances
other securities) on terms substantially the same as the BMG Rights confer the
right to acquire shares of Common Stock of BMG or preferred stock of BMG that is
essentially the economic equivalent of BMG Common Stock (or in certain
circumstances other securities) as contemplated by the Preambles to this
Agreement, the Board of Directors shall, concurrently with the adjustment made
under the BMG Rights Agreement, make such adjustment in the Purchase Price, the
number and kind of shares or other property subject to purchase upon exercise of
each Right and the number of Rights outstanding as shall be appropriate in the
circumstances to achieve such result.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or Section 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
Exchangeable Shares, a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing Exchangeable Shares) in
accordance with Section 25 hereof. The Rights Agent shall be fully protected in
acting in reliance on any such certificate and on any adjustment therein
contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, on or after the Stock Acquisition Date, a
Flip-Over Event shall occur, then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made
(concurrently with the corresponding action pursuant to Section 13 of the BMG
Rights Agreement) so that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the Principal Party
(as such term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the number
of shares of such Common Stock for which each BMG Right is exercisable following
the corresponding adjustment under Section 13(a)
-17-
of the BMG Rights Agreement multiplied by the ratio of the number of BMG Rights
then associated with each share of Common Stock to the number of Rights then
associated with each Exchangeable Share and the Purchase Price shall thereafter
be adjusted to the "Purchase Price" in effect under the BMG Rights Agreement
following the corresponding adjustment thereunder; PROVIDED that the Purchase
Price and the number of shares of Common Stock of such Principal Party issuable
upon exercise of each Right shall be further adjusted as provided in this
Agreement to reflect any changes occurring after such adjustment; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Flip-Over Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Flip-Over Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock) in connection with the consummation of any such transaction
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; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Flip-Over Event.
(b) "Principal Party" shall mean the Person designated as such under
the BMG Rights Agreement.
(c) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-Over Event shall occur at any time after the occurrence of a Flip-In
Event, the Rights that have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
(d) Upon consummation of any transaction contemplated by Section
13(d) of the BMG Rights Agreement, all Rights hereunder shall expire.
Section 14. 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(a)(i) hereof, or
to distribute Rights Certificates that 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 purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sales 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 Toronto Stock
Exchange, or, if the Rights are not listed or admitted to trading on the Toronto
Stock Exchange, as
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reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal securities exchange in Canada on which the
Rights are listed or admitted to trading, or if the Rights are not listed or
admitted to trading on any securities exchange in Canada, the last quoted sales
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 is making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Exchangeable Shares upon exercise of the Rights or to distribute certificates
that evidence fractions of Exchangeable Shares. In lieu of fractions of
Exchangeable Shares, 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 one
Exchangeable Share. For purposes of this Section 14(b), the current market value
of one Exchangeable Share shall be the closing price of an Exchangeable Share
(as determined pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent pursuant
to Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders
of Exchangeable Shares and, where applicable, the Company); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of
Exchangeable Shares), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of
Exchangeable Shares), may, on his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such 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.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
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(a) prior to the Distribution Date, the Rights will not be evidenced
by Rights Certificates and will be transferable only in connection and together
with the transfer of the associated Exchangeable Shares as provided in Section
3(c) hereof;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the Rights Register of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the form of assignment set forth on the reverse side thereof and the
certificate contained therein duly completed and fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, 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 Exchangeable
Share 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 Exchangeable Share certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. 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 number of Exchangeable
Shares or any other securities of the Company which may at any time be issuable
upon 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 shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 24 hereof), or to
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 provisions hereof.
-20-
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements (including fees and disbursements of counsel in the State of
Nevada) and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against any
claim of liability in the premises. The Company's obligations set forth in this
paragraph shall survive the termination of this Agreement.
(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 Exchangeable Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; PROVIDED, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Rights
Certificate shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a 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 and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the 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
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countersigned; and in case at that 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 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person, the
determination of "current market price" and the nature and amount of any
adjustment under the BMG Rights Agreement corresponding to an adjustment to be
made under this Agreement) be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate or certificate representing
Exchangeable Shares (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 Section 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 receipt of the
-22-
certificate contemplated by Section 12 hereof); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Exchangeable Shares or other securities to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any Exchangeable Shares 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 from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; PROVIDED, however, that 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 or transfer without first consulting with the Company.
-23-
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Exchangeable Shares, by registered or certified mail, and
to the 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 Exchangeable Shares, 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.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. 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 his
Rights Certificate for inspection by the Company), then the Rights Agent or any
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
corporation organized and doing business under the laws of the United States,
Canada or of the State of Texas or of the State of New York (or of any other
state of the United States) so long as such corporation is authorized to conduct
a stock transfer or corporate trust business in the State of Texas or the State
of New York, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. 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 Exchangeable Shares, 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 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW 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 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. In addition, in connection
with the issuance or sale of Exchangeable Shares following the Distribution Date
and prior to the redemption or expiration of the Rights, the Company (a) shall,
with respect to Exchangeable Shares so issued or
-24-
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Company shall, at such time as the BMG Rights are redeemed
pursuant to Section 23 of the BMG Rights Agreement, redeem all but not less than
all the then outstanding Rights at a redemption price of U.S.$.01 per Right, as
such amount may be appropriately adjusted, if necessary, to reflect any stock
split, stock dividend or similar transaction occurring after the Effective Date
(such redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Flip-In Event until
such time as BMG's right of redemption under Section 23 of the BMG Rights
Agreement has expired. The Company may, at its option, pay the Redemption Price
in cash, Exchangeable Shares (based on the "current market price", as defined in
Section 11(d) hereof, of Exchangeable Shares at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the effectiveness of action by BMG ordering
redemption of the BMG Rights pursuant to Section 23 of the BMG Rights Agreement,
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 for each Right so held. Promptly after action by
BMG ordering such redemption of the BMG Rights, the Company shall give notice of
such redemption and of the consequent redemption of the Rights to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Company for the Exchangeable Shares. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS.
(a) In case (x) BMG shall give a notice pursuant to Section 24 of
the BMG Rights Agreement or (y) the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Exchangeable Shares or to make any other distribution to the holders
of Exchangeable Shares (other than a regular quarterly or semiannual cash
-25-
dividend out of earnings or retained earnings of the Company), or (ii) to offer
to the holders of Exchangeable Shares rights or warrants to subscribe for or to
purchase any additional Exchangeable Shares or shares of stock of any class or
any other securities, rights or options, or (iii) to effect any reclassification
of the Exchangeable Shares (other than a reclassification involving only the
subdivision of outstanding Exchangeable Shares), or (iv) to effect any
consolidation, amalgamation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or to effect any sale, lease or other transfer (or to permit one or
more of its Subsidiaries to effect any sale, lease or other transfer), in one
transaction or a series of related transactions, of more than 50 percent of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) 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, as applicable and to the extent feasible and in accordance
with Section 25 hereof, (A) a notice of the action proposed by BMG as set forth
in the notice given pursuant to Section 24 of the BMG Rights Agreement or (B) a
notice of such proposed action by the Company, 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, lease, transfer, liquidation, dissolution or winding up is to take place
and the date of participation therein by the holders of the Exchangeable Shares,
if any such date is to be fixed. Such notice shall be so given in the case of
any action covered by clause (x) above forthwith, but not later than two
Business Days after such notice is given by BMG, and in the case of any action
covered by clause (y)(i) or (ii) above at least 20 days prior to the record date
for determining holders of the Exchangeable Shares 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 Exchangeable Shares, whichever shall be the earlier.
(b) In case any Flip-In Event or Flip-Over Event shall occur, then
(i) the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate (or if occurring prior to the Distribution Date to the
registered holders of Exchangeable Shares), to the extent feasible and in
accordance with Section 25 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) or Section 13(a) hereof, and (ii) all references in
the preceding paragraph to Exchangeable Shares shall, to the extent appropriate,
also be deemed thereafter to refer to other securities.
Section 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any 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:
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Battle Mountain Canada Ltd.
c/o Battle Mountain Gold Company
333 Clay Street, 42nd Floor
Houston, Texas 77002-4103
Attention: Corporate Secretary
Subject to provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any 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:
The R-M Trust Company
393 University Avenue, 5th Floor
Toronto, Ontario M5G 2M7
Attention: Vice President, Client Services
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 (or, if
prior to the Distribution Date, to the holder of certificates representing
Exchangeable Shares) 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 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company may
and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing Exchangeable Shares. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company may and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner that the Company may deem
necessary or desirable and that shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); PROVIDED, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than any Acquiring
Person and its Affiliates and Associates). Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment; PROVIDED, however, that
the Rights Agent may, but shall not be obligated to, enter into any such
supplement or amendment that affects the Rights Agent's own rights, duties or
immunities
-27-
under this Agreement. Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made that decreases the
Redemption Price, shortens the Final Expiration Date, increases the initial
Purchase Price or decreases the initial number of Exchangeable Shares for which
a Right is exercisable. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Exchangeable Shares.
Section 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. The Board of Directors of the Company (or, as set forth herein, certain
specified members thereof) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power (i) to interpret the provisions of this
Agreement and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to amend this Agreement). All such actions, calculations,
interpretations and determinations (including omissions with respect thereto for
purposes of clause (y) below) that are done or made by the Board of Directors of
the Company in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights, as such, and all other
parties and (y) not subject the Board of Directors to any liability to the
holders of the Rights.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Exchangeable Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Exchangeable Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. GOVERNING LAW. THIS AGREEMENT, EACH RIGHT AND EACH
RIGHTS CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF NEVADA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
-28-
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-29-
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: BATTLE MOUNTAIN CANADA LTD.
By: /s/ JOSEPH J. BAYLIS
Name: Name: Joseph J. Baylis
Title: Title: Vice President
Attest: THE R-M TRUST COMPANY
/s/ PAT LEE By: /s/ CHARITO LIBRODO
Name: Pat Lee Name: Charito Librodo
Title: Authorized Officer Title: Authorized Officer
THE R-M TRUST COMPANY
By: /s/ GEORGE NAGY
Name: George Nagy
Title: Authorized Officer
-30-
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER NOVEMBER 10, 1998 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT U.S.$.01
PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID AND
NO LONGER BE TRANSFERABLE. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THIS RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY WILL BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
BATTLE MOUNTAIN CANADA LTD.
This certifies that ______________________________________, or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of July 15, 1996
(the "Rights Agreement"), between Battle Mountain Canada Ltd., an Ontario
corporation (the "Company"), and The R-M Trust Company (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M. (New York City time) on
November 10, 1998 at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one Exchangeable Share (the
"Exchangeable Shares") of the Company, at a purchase price of U.S.$60 per
Exchangeable Share (the "Purchase Price"), upon presentation and surrender of
this
- --------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
Rights Certificate with the Form of Election to Purchase set forth on the
reverse hereof and the Certificate contained therein duly executed. The Purchase
Price may be paid by certified bank check, bank cashier's or official bank check
or money order payable to the order of the Company or the Rights Agent. 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 per share set forth above, are the number and Purchase Price as of July
19, 1996, based on the Exchangeable Shares as constituted at such date.
Upon the occurrence of a Flip-In Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, concurrently with or after such transfer, became an Acquiring
Person, such Rights shall become null and void and no holder hereof shall have
any rights whatsoever with respect to such Rights from and after the occurrence
of such Flip-In Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of Exchangeable Shares or other securities that 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, including
Triggering Events (as such term is defined in the Rights Agreement).
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, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices 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 Exchangeable Shares 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 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.
As provided in the Rights Agreement, the Rights evidenced by this
Certificate shall be redeemed by the Company in certain events at a redemption
price of U.S.$.01 per Right, payable,
A-2
at the election of the Company, in cash or Exchangeable Shares or such other
consideration as the Board of Directors may determine.
No fractional Exchangeable Shares will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof of 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
Exchangeable Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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.
A-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _________________, 19_____
ATTEST: BATTLE MOUNTAIN CANADA LTD.
_____________________________ By______________________________
[Title] [Title]
Countersigned:
THE R-M TRUST COMPANY
By___________________________
Authorized Signature
A-4
[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:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) 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 an Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
A-5
(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, was or subsequently became an Acquiring Person of an
Affiliate or Associate of an Acquiring Person.
Dated: _________________, 19___ ___________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate 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.
A-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: BATTLE MOUNTAIN CANADA LTD.
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Rights Certificate to purchase the Exchangeable
Shares issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares (or other securities) be
issued in the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
______________________________________________________________________________
Dated: _______________, 19___
Signature________________________
A-7
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of July
19, 1996, between Noranda Inc., an Ontario Corporation ("Noranda"), Kerr Addison
Mines Limited, an Ontario corporation and a wholly owned subsidiary of Noranda
("Kerr Addison"), and Battle Mountain Gold Company, a Nevada corporation (the
"Company").
Pursuant to the Combination Agreement dated as of March 11, 1996 by
and between the Company and Hemlo Gold Mines Inc., an Ontario corporation
("Hemlo"), as amended and restated (the "Combination Agreement") and the
Arrangement referred to therein (the "Arrangement"), the shareholders of Hemlo
will acquire Exchangeable Shares of Hemlo (the "Exchangeable Shares") which are
exchangeable for shares of Common Stock, par value $.10 per share, of the
Company ("Common Stock") and Hemlo will be renamed Battle Mountain Canada Ltd.
("Battle Mountain Canada").
Section 4.18 of the Combination Agreement provides, that to the
extent that Noranda desires to sell any Exchangeable Shares it acquires pursuant
to the Arrangement or shares of Common Stock issued pursuant to the retraction
and exchange rights and other provisions in respect of such Exchangeable Shares
(including any securities issuable as a stock dividend or other distribution on,
or in subdivision, combination or reclassification of, the foregoing and any
other securities into which such shares may be changed or for which such
securities may be exchanged) (collectively, the "Noranda Securities") following
the first publication of financial statements that include the combined
financial results of the Company and Battle Mountain Canada for a period of at
least 30 days (the "Commencement Date"), the Company will provide Noranda with
certain registration rights under United States law and prospectus rights under
Canadian law with respect to the Noranda Securities.
Noranda has transferred its interest in Common Shares of Hemlo to
Kerr Addison and the Company is willing to extend such registration and
prospectus rights to Kerr Addison as provided herein. As hereinafter used, the
term "Noranda" refers to Kerr Addison, and the term "Noranda Securities" shall
refer to such securities when owned or held by Kerr Addison.
The parties wish to set out with greater particularity the
provisions governing such registration rights.
Accordingly, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties agree as follows:
1. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION. Subject to Section 1(d), if Noranda shall,
at any time or from time to time after the Commencement Date and prior to the
Termination Date (as defined in Section 8), provide the Company with a written
request for the registration under the Securities Act of 1933, as amended (the
"Act"), of all or part of the Noranda Securities, the Company shall (or, as
applicable, shall cause Battle Mountain Canada to) as expeditiously as
reasonably possible (but
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in any event not later than 60 days after receipt of a request to file a demand
registration) prepare and file, and use its best efforts to cause to become
effective as soon as practicable, a registration statement under the Act to
effect the offering of the Noranda Securities specified in such request in (x)
an underwritten public offering or (y) a "shelf" offering for sale from time to
time, provided that the amount of Noranda Securities for which registration is
requested in connection with any such "shelf" offering shall not, without the
written approval of the Company, exceed U.S. $50,000,000 in market value (valued
at the time of the request) and that, notwithstanding Section 2(h) hereof, the
period during which the Company shall be required to keep effective and maintain
any registration, qualification or approval obtained in connection with any such
"shelf" offering, and amend or supplement the registration statement or
prospectus or other offering document used in connection therewith to the extent
necessary in order to comply with applicable securities law shall be limited to
a period of 60 days from the date such registration statement or other offering
document becomes effective. Notwithstanding the foregoing, the Company shall be
entitled to defer for a reasonable period of time, but not in excess of 120
days, (or in the case of a postponement pursuant to clause (i)(C) of this
sentence, as soon as practicable after public disclosure of the information that
was the basis for such postponement), the filing by it or Battle Mountain Canada
of any registration statement otherwise required to be prepared and filed by it
or Battle Mountain Canada under this Section 1(a) if (i) (A) the Company or
Battle Mountain Canada is at such time conducting or about to conduct an
underwritten public offering of its securities for its own account and the Board
of Directors of the Company determines in good faith that such offering by the
Company or Battle Mountain Canada would be materially adversely affected by such
registration requested by Noranda, (B) the Company or Battle Mountain Canada is
pursuing an acquisition, merger, reorganization, disposition or other similar
transaction and the Board of Directors of the Company determines in good faith
that the ability to pursue or consummate such a transaction would be materially
adversely affected by such registration requested by Noranda, or (C) the Company
is in possession of material non-public information concerning it or its
business and affairs (or corresponding information concerning Battle Mountain
Canada) and the Board of Directors of the Company determines in good faith that
the prompt public disclosure of such information in a registration statement
would have a material adverse effect on the Company; and (ii) the Company so
notifies Noranda within five business days after Noranda so requests. If any
such offering is to be underwritten, Noranda shall be entitled to select the
manager or managers and other underwriters for such underwritten offering,
subject to the approval of the Company, which approval shall not be unreasonably
withheld.
(b) PIGGYBACK REGISTRATION. If at any time or from time to time
after the Commencement Date and prior to the Termination Date, the Company or
Battle Mountain Canada shall propose to register any Common Stock or
Exchangeable Shares for public sale under the Act, then the Company shall give
Noranda prompt notice of the proposed registration and shall include in such
registration on the same terms and conditions as the other securities included
in such registration such number of Noranda Securities of the same class or
classes proposed to be registered as Noranda shall request within 5 business
days after the giving of such notice; PROVIDED, HOWEVER, that the Company or
Battle Mountain Canada may at any time prior to the effectiveness of any such
registration statement, in its sole discretion and without the consent of
Noranda, abandon the proposed offering in which Noranda had requested to
participate. Notwithstanding the foregoing,
- 2 -
(i) the Company or Battle Mountain Canada shall not be obligated to include such
Noranda Securities in such offering to the extent the managing underwriter or
underwriters of such offering advise the Company or Battle Mountain Canada that
the inclusion thereof would materially and adversely affect the successful
marketing of the offering or would materially and adversely affect the trading
market for the Common Stock or the Exchangeable Shares, in which case the
priority provisions of Section 1(c) shall apply, and (ii) neither the Company
nor Battle Mountain Canada shall be obligated to effect any registration of such
Noranda Securities incidental to the registration by the Company or Battle
Mountain Canada of any of its securities in connection with mergers,
acquisitions, exchange offers, subscription offers, dividend reinvestment plans
or stock option or other director or employee benefit plans. Noranda shall be
entitled to withdraw any or all of its Noranda Securities included in a
registration subject to this Section 1(b) at any time before its agreement to
sell such securities. As a condition to pursuing its rights under this Section
1(b), Noranda agrees to enter into customary agreements (including an
underwriting agreement on customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of the Noranda
Securities. If the registration by the Company or Battle Mountain Canada
referred to in the first sentence of this Section 1(b) is a "shelf"
registration, the priority and proration provisions set forth in this Section
1(b) shall apply with respect to each discrete offering made pursuant to such
registration.
(c) LIMITATION ON OTHER SECURITIES TO BE REGISTERED; PRIORITY. In
case of any registration, offering or sale contemplated by Section 1(a), the
Company (or Battle Mountain Canada, as applicable) may, without the consent of
Noranda, include in such registration, offering or sale any securities of the
same class as the Noranda Securities proposed to be offered. If in connection
with any underwritten offering under Section 1(a) the managing underwriter or
underwriters of such offering advise the Company or Battle Mountain Canada that
the inclusion of all securities (including Noranda Securities) proposed to be
offered would materially and adversely affect the successful marketing of the
offering or would materially and adversely affect the trading market for the
Common Stock or the Exchangeable Shares, there shall be included in such
registration to the extent the managing underwriter or underwriters advise the
Company or Battle Mountain Canada that such inclusion would not have a material
adverse effect (i) first, the securities proposed to be included by Noranda and
any security holder other than Noranda requesting such registration, pro rata in
accordance with the number of securities requested to be included by Noranda and
such other holders, and (ii) second, securities proposed to be included by the
Company and/or Battle Mountain Canada for its or their own account. In case of
any registration, offering or sale contemplated by Section 1(b), the Company may
include in such registration, offering or sale securities other than those being
offered by the Company and Noranda; provided that, if the amount of Common Stock
or other securities to be sold by Noranda is to be reduced pursuant to clause
(i) of the second sentence of Section 1(b), there shall be included in such
registration to the extent the managing underwriter or underwriters advise the
Company or Battle Mountain Canada such inclusion would not result in such
material adverse effect (1) if the registration pursuant to Section 1(b) is
initiated by the Company or Battle Mountain Canada to register Common Stock or
Exchangeable Shares for the account of either of them, (i) first, the securities
proposed to be included by the Company and/or Battle Mountain Canada to be sold
for its or their own account and
- 3 -
(ii) second, the securities proposed to be included by Noranda and any security
holder other than Noranda requesting such registration, pro rata in accordance
with the number of securities proposed to be included by Noranda and such other
holders, and (2) if the registration pursuant to Section 1(b) is being effected
pursuant to the request of a security holder other than Noranda, (i) first, the
securities proposed to be included by Noranda and any security holder other than
Noranda requesting such registration, pro rata in accordance with the number of
securities proposed to be included by Noranda and such other holders, and (ii)
second, the securities proposed to be included by the Company and/or Battle
Mountain Canada, as applicable, to be sold for its or their own account.
(d) NUMBER OF DEMAND REGISTRATIONS; SEPARATION. The Company shall be
obligated to effect (or to cause Battle Mountain Canada to effect) up to an
aggregate of five registrations pursuant to Section 1(a), provided that the
Company shall not be obligated to effect (or to cause Battle Mountain Canada to
effect) more than one such registration during any period of twelve consecutive
months and provided, further, that a registration shall be deemed to have been
effected pursuant to Section 1(a) only to the extent that such registration
becomes effective or to the extent Noranda withdraws or cancels its demand
registration request.
(e) CANADIAN OFFERINGS. In lieu of or in addition to any
registration under the Act as provided in Section 1(a) hereof, the Company or
Battle Mountain Canada, as applicable, shall, upon and in the manner and to the
extent requested in writing by Noranda, file a prospectus with any Canadian
securities regulatory authority or otherwise qualify for distribution in any
province of Canada (a "Canadian Offering") shares of Common Stock or
Exchangeable Shares for which registration has been or could have been requested
under Section 1(a) hereof, in which case such Canadian Offering shall count
(together with the concurrent registration under the Act, if any) as one
registration for purposes of Section 1(d). In the event that a Noranda request
pursuant to the preceding sentence imposes an obligation on the Company to
translate its prospectus or any or all other documents filed in connection
therewith into the French language, the cost of such translation (including the
cost of printing translated documents) shall be for the account of Noranda. If
at any time or from time to time after the Commencement Date and prior to the
Termination Date, the Company or Battle Mountain Canada shall propose to qualify
any Common Stock or Exchangeable Shares for a Canadian Offering, then Noranda
shall be entitled, subject to applicable Canadian securities law, to participate
in such Canadian Offering to the same extent and on the same terms and
conditions as it would have been entitled to participate in a registration
pursuant to Section 1(b) hereof. With respect to Noranda's participation in any
Canadian Offering pursuant to the foregoing provisions of this Section 1(e), the
provisions of Section 1(a) and 1(b) hereof, as applicable, and the other terms
of this Agreement respectively applicable thereto shall apply, MUTATIS MUTANDIS,
to such Canadian Offering (for example, and without limitation, the same
relative priorities under Section 1(c), if applicable, shall apply to the
Canadian Offering as to the corresponding registration in the United States and
Noranda shall not participate to any greater proportionate extent in the
Canadian Offering than its participation in the corresponding registration in
the United States).
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2. COVENANTS OF THE COMPANY. In connection with any offering of
Noranda Securities pursuant to this Agreement, the Company shall (or, as
applicable, shall cause Battle Mountain Canada to):
(a) furnish to Noranda and to each managing underwriter, if any, a
reasonable time in advance of their filing with the Securities and Exchange
Commission (the "SEC") any registration statement, amendment or supplement
thereto, and any prospectus used in connection therewith, which documents will
be subject to the reasonable review of Noranda and such underwriter; and furnish
a copy of any and all transmittal letters or other correspondence with the SEC
or any other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating to
such offering of Noranda Securities;
(b) furnish to Noranda and each managing underwriter, if any, such
number of copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein) and the prospectus included in such registration statement
(including each preliminary prospectus and prospectus supplement) as Noranda or
such underwriter may reasonably request in order to facilitate the sale of the
Noranda Securities;
(c) after the filing of the registration statement promptly notify
Noranda of any stop order issued or, to the knowledge of the Company, threatened
to be issued by the SEC and promptly take all necessary actions required to
prevent the entry of such stop order or to remove it if entered;
(d) use its best efforts to qualify such Noranda Securities for
offer and sale under the securities, "blue sky" or similar laws of such
jurisdictions (including any foreign country or any political subdivision
thereof) as Noranda or any underwriter shall reasonably request and use its best
efforts to obtain all appropriate registrations, permits and consents required
in connection therewith, except that neither the Company nor Battle Mountain
Canada shall for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, or to subject itself to taxation in any such jurisdiction, or to
consent to general service of process in any such jurisdiction;
(e) furnish to Noranda and to each managing underwriter, if any,
addressed to each of them, an opinion of counsel for the Company, dated the date
of the closing of the offering of Noranda Securities, and a "cold comfort"
letter or letters signed by the Company's independent public accountants, each
in reasonable and customary form and covering such matters of the type
customarily covered by opinions or comfort letters delivered to such parties;
(f) furnish unlegended certificates representing ownership of the
Noranda Securities being sold in such denominations as shall be requested by
Noranda or the lead underwriter;
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(g) promptly inform Noranda (i) in the case of any offering of
Noranda Securities in respect of which a registration statement is filed under
the Act, of the date on which such registration statement or any post-effective
amendment thereto becomes effective and if applicable, of the date of filing a
Rule 430A prospectus and (ii) of any request by the SEC, any securities
exchange, government agency, self-regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration statement or
preliminary prospectus or prospectus included therein or any offering memorandum
or other offering document relating to such offering;
(h) until the earlier of (i) such time as all of the Noranda
Securities being offered have been disposed of in accordance with the intended
method of disposition by Noranda set forth in the registration statement or
other offering document (and the expiration of any prospectus delivery
requirements in connection therewith) or (ii) the expiration of nine months
after such registration statement or other offering document becomes effective,
keep effective and maintain any registration, qualification or approval obtained
in connection with the offering of the Noranda Securities, and amend or
supplement the registration statement or prospectus or other offering document
used in connection therewith to the extent necessary in order to comply with
applicable securities laws;
(i) as soon as reasonably practicable after the effective date of
any such registration statement, and in any event, within 16 months thereafter,
make generally available to its shareholders an earnings statement (which need
not be audited) complying with Section 11(a) of the Act and covering a period of
at least twelve consecutive months beginning after the effective date of any
such registration statement;
(j) use its best efforts to have such Noranda Securities listed on
any domestic and foreign securities exchanges on which such securities are then
listed;
(k) as promptly as practicable notify Noranda, at any time when a
prospectus relating to the sale of the Noranda Securities is required by law to
be delivered in connection with sales, of the occurrence of an event requiring
the preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Noranda Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and as promptly as practicable make available to Noranda
and to each managing underwriter, if any, any such supplement or amendment; in
the event the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained effective as
provided in Section 2(h) hereof by the number of days during the period from and
including the date of the giving of such notice to the date when the Company (or
Battle Mountain Canada, as applicable) shall made available to Noranda such
supplemented or amended prospectus;
(l) make available for inspection during the normal business hours
of the Company by Noranda, any underwriter participating in such offering, and
any attorney or accountant
- 6 -
retained by Noranda or such underwriter in connection with the sale of the
Noranda Securities, all relevant financial and other records, pertinent
corporate documents and properties of the Company as shall be reasonably
necessary to enable them to conduct a reasonable investigation for purposes of
the Securities Act, and cause the officers, directors and employees of the
Company to supply all information reasonably requested by Noranda or any such
underwriter, attorney or accountant in connection with such registration
statement; and
(m) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the sale of the Noranda Securities.
3. CERTAIN NORANDA OBLIGATIONS. Noranda agrees that upon receipt of
any notice from the Company of the happening of any event described in Section
2(j), it will forthwith discontinue disposition of Noranda Securities until it
receives copies of the supplemented or amended prospectus contemplated by
Section 2(j) or until it is advised by the Company that the use of the
prospectus may be resumed.
4. EXPENSES.
Except as provided in the next sentence, Noranda shall pay a pro
rata portion (on the basis of the Noranda Securities then being registered on
its behalf in relation to all securities being registered) of all expenses
incurred by the Company in complying with Sections 1(a) or 1(b) hereof,
including, without limitation, all registration and filing fees (including all
expenses incident to any filing with the National Association of Securities
Dealers, Inc. or listing on any domestic or foreign securities exchange), fees
and disbursements of counsel for the Company and its independent public
accountants, fees and expenses of complying with securities and blue sky laws
and printing expenses (collectively, "Registration Expenses"). To the extent
permitted by law, the Company shall, however, pay (or, as applicable, cause
Battle Mountain Canada to pay) all Registration Expenses incurred in complying
with the first registration effected pursuant to Section 1(a). In all cases,
Noranda shall pay all underwriting discounts and commissions attributable to the
sale of the Noranda Securities and Noranda shall pay the fees and expenses of
its separate counsel. Notwithstanding anything to the contrary herein, Noranda
shall not be obligated to pay any expenses incurred by the Company in connection
with a registration pursuant to Section 1(b) that is abandoned by the Company or
Battle Mountain Canada under circumstances not involving any withdrawal
therefrom by Noranda.
5. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless Noranda, its officers, directors and agents, each underwriter
of Noranda Securities, and each person, if any, who controls any of the
foregoing persons within the meaning of either Section 15 of the Act or Section
20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from
and against any and all losses, claims, damages and liabilities arising from
- 7 -
or caused by (x) any untrue statement or alleged untrue statement of a material
fact contained in any registration statement or prospectus relating to the
Noranda Securities (as amended or supplemented if the Company or Battle Mountain
Canada shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (y) any violation or alleged violation by
the Company or Battle Mountain Canada of the Act, any blue sky laws, securities
laws or other applicable laws of any state or country in which the Noranda
Securities are offered and relating to action or inaction required of the
Company or Battle Mountain Canada in connection with such offering; and will
reimburse each such person for any legal or other out-of-pocket expenses
reasonably incurred in connection with investigating or defending any such loss,
claim, damage or liability (or any proceeding in respect thereof), subject to
the provisions of Section 5(c), except that the indemnification agreement
contained in this Section shall not apply to such losses, claims, damages or
liabilities that are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon and in conformity with information
furnished in writing to the Company or Battle Mountain Canada by or on behalf of
Noranda expressly for use therein.
(b) INDEMNIFICATION BY NORANDA. Noranda agrees to indemnify and hold
harmless the Company, Battle Mountain Canada, their respective officers and
directors, and each person, if any, who controls the Company within the meaning
of either Section 15 of the Act or Section 20 of the Exchange Act to the same
extent as the indemnity made pursuant to clause (x) of Section 5(a) above from
the Company to Noranda, but only with reference to information furnished in
writing by or on behalf of Noranda expressly for use in any registration
statement or prospectus relating to the Noranda Securities, or any amendment or
supplement thereto, or any preliminary prospectus. In no event shall the
liability of Noranda hereunder be greater in amount than the dollar amount of
the proceeds received by Noranda upon the sale of Noranda Securities giving rise
to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 5(a) or
5(b), such person (the "Indemnified Party") shall promptly notify the person
against whom such indemnity may be sought (the "Indemnifying Party") in writing,
provided that the omission to so notify the Indemnifying Party will not relieve
the Indemnifying Party of any liability it may have under this Agreement or
otherwise except to the extent of any loss, damage, liability or expense arising
from such omission. The Indemnifying Party, upon the request of the Indemnified
Party, shall retain counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel, (ii) the Indemnifying Party shall have failed to
comply with its obligations under the preceding sentence or (iii) in the
reasonable judgment of the Indemnified Party actual or
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potential differing interests exist between the Indemnifying Party and the
Indemnified Party. The Indemnifying Party shall not be liable for any settlement
of any proceeding effected without its written consent, which consent shall not
be unreasonably withheld. The Indemnifying Party shall not agree to any
settlement (i) which involves an admission of any violation of law or (ii) as
the result of which any remedy or relief, other than monetary damages for which
the Indemnifying Party shall be fully responsible, shall be applied to or
against an Indemnified Party without, in either case, the prior written consent
of such Indemnified Party.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 5 from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 5(c), any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding. No party shall be liable for contribution with respect to any
action or claim settled without its written consent, which consent shall not be
unreasonably withheld.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
6. AVAILABLE INFORMATION. The Company shall take such measures and
file such information, documents and reports as shall be required by the SEC as
a condition to the availability of Rule 144, or any successor provisions.
7. TERMINATION DATE. The "Termination Date" for purposes of Section
1(a) and 1(b) shall be the first date on which Noranda shall no longer own
Noranda Securities entitling Noranda to "beneficial ownership" within the
meaning of Rule 13d-3 under the Exchange Act of more than 5% of the outstanding
Exchangeable Shares and shares of Common Stock, considered as one class.
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8. MISCELLANEOUS.
(a) PROVISION OF INFORMATION. Noranda shall, and shall cause its
officers, directors, employees and agents to, complete and execute all such
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents as the Company shall reasonably request in connection with any
registration pursuant to this Agreement.
(b) SEVERABILITY. If any term or provision of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term or provision.
(c) FURTHER ASSURANCES. Subject to the specific terms of this
Agreement, each of Noranda and the Company shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement.
(d) ENTIRE AGREEMENT; MODIFICATION. This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof.
This Agreement may be modified only by a written instrument duly executed by or
on behalf of each party. No breach of any covenant, agreement, warranty or
representation shall be deemed waived unless expressly waived in writing or on
behalf of the party who might assert such breach.
(e) COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties hereto, and each
such executed counterpart shall be, and shall be deemed to be, an original
instrument.
(f) NOTICES. All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be in writing and
shall be delivered personally or sent by facsimile, recognized overnight
delivery service or by registered or certified mail, postage prepaid, in any
case as follows:
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(i) If to Noranda, to
Noranda Inc.
181 Bay Street, Suite 4100
P. O. Box 755, BCE Place
Toronto, Ontario
Canada M5J2T3
Attention: General Counsel
Facsimile: (416) 982-7490
(ii) If to the Company, to
Battle Mountain Gold Company
333 Clay Street, 42nd Floor
Houston, Texas 77002
Attention: General Counsel
Facsimile: (713) 653-7238
or such other address as any party may, from time to time, designate in a
written notice in a like manner. All notices and other communications shall be
deemed to be effective upon receipt by the party to whom given.
(g) GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of law thereof.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by and against the permitted
successors and assigns of the parties hereto. Noranda may not assign its rights
under this Agreement, except that Noranda may assign its rights hereunder to a
direct or indirect wholly owned subsidiary of Noranda (provided that Noranda
Inc. shall remain responsible for its obligations hereunder), and the Company
may not delegate its obligations under this Agreement. Any attempted assignment
or delegation prohibited hereby shall be void.
(i) PARTIES IN INTEREST. Except as otherwise specifically provided
herein, nothing in this Agreement expressed or implied is intended or shall be
construed to confer any right or benefit from any person, firm or corporation
other than Noranda and the Company.
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IN WITNESS WHEREOF, Noranda, Kerr Addison and the Company have
caused this Agreement to be duly executed as of the date first above written.
NORANDA INC.
By: /s/ ALAN R. THOMAS
Alan R. Thomas
Title: Chief Financial Officer
By: /s/ KEVIN N. THOMPSON
Kevin N. Thompson
Title: Vice-President, Secretary
and General Counsel
KERR ADDISON MINES LIMITED
By: /s/ ALEX G. BALOGH
Alex G. Balogh
Title: Director
BATTLE MOUNTAIN GOLD COMPANY
By: /s/ ROBERT J. QUINN
Robert J. Quinn
Title: Vice President
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