Securities and Exchange Commission
Washington, D.C. 20549
* * * * * * * * * *
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PENN VIRGINIA CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 23-1184320
- ---------------------------------------- -------------------
(State of incorporation or organization) (IRS Employer
Identification No.)
One Radnor Corporate Center, Suite 200
100 Matsonford Road
Radnor, PA 19087
- -----------------------------------------------------------------
(Address of principal executive offices) (zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class to be so which each class
registered: is to be registered:
- -------------------------------- -----------------------------
Preferred Stock Purchase Rights New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
* * * * * * * * * *
<PAGE 1>
Item 1. Description of Registrant's Securities to be
Registered.
The Board of Directors of Penn Virginia Corporation (the
"Company") has declared a dividend distribution of one preferred
stock purchase right (the "Rights") for each outstanding share of
Common Stock, par value $6.25 per share (the "Common Stock"), of
the Company to shareholders or record at the close of business on
February 21, 1998. Each Right entitled the registered holder to
purchase from the Company one one-thousandth of a share of Series
A Junior Participating Preferred Stock, par value $100 per share
(the "Preferred Stock") (or in certain circumstances, cash,
property, or other securities of the Company), at a Purchase
Price of $100, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated as of February 11,
1998, between the Company and American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agent"). Capitalized terms
used but not otherwise defined herein will have meanings given
such terms in the Rights Agreement.
Initially, the Rights will be evidenced by the certificates
representing shares of Common Stock then outstanding, and no
separate Right Certificates will be distributed. The Rights will
separate from the Common Stock and become exercisable upon the
earlier of (i) ten calendar days following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring person") has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) ten business days (or a later date as
is determined by the Board of Directors, or if there has been an
Adverse Chang eof Control, by a majority of at least two
Continuing Directors (as such terms are herein defined)) after
the commencement of, or first public announcement of an intention
to commence, a tender offer or exchange offer that would result
in a person or group beneficially owning 15% or more of such
outstanding shares of Common Stock (the earlier of such dates
being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date
will contain in accordance with the Rights Agreement a notation
incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such
certificates.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on February 11, 2008,
unless earlier redeemed or exchanged by the Company as described
below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date, and
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise provided by the Rights Agreement
or determined by
<PAGE 2>
the Board of Directors, only shares of Common
Stock issued prior to the Distribution Date will be issued with
Rights.
In the event that a person becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon
exercise, shares of Common Stock(or in certain circumstances,
cash, property or other securities of the company) having a value
equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, following the occurrence of such
an event or any other Triggering Event (as defined below), all
Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
After the Stock Acquisition Date, in the event that (i) the
Company consolidates or merges with any other person, and the
Company is not the surviving corporation, (ii) any person engages
in a share exchange, consolidation or merger with the Company
where the outstanding shares of Common Stock of the Company are
exchanged for securities, cash or property of the other person
and the Company is the surviving corporation or (iii) 50% or more
of the Company's assets or earning power is sold or transferred,
proper provision will be made so that each holder of a Right
shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times
the Purchase Price of the Right. The events set forth in this
paragraph and the preceding paragraph are referred to as the
"Triggering Events."
The Purchase Price payable, and the number of shares of
Common Stock or other securities, cash or property issuable, upon
exercise of the Rights are subject to customary adjustments from
time to time to prevent dilution in the event of certain changes
in the shares of the Company. With certain except8ons, no
adjustment in the Purchase Price will be required until
cumulative adjustments amount to an increase or decrease of at
least 1% in the Purchase Price.
In general, the Company may redeem the Rights in whole, but
not in part, at a price of $.001 per Right (subject to
adjustment), at any time before the close of business on the
tenth calendar day following the Stock Acquisition Date;
provided, however, that if the authorization to redeem the Rights
occurs on or after the date of a change in a majority of the
Board of Directors of the Company as a result of a proxy or
consent solicitation and a person who was a participant in such
solicitation has stated that such person (or any of its
Affiliates or Associates) has taken or intends to take or may
consider taking actions that would result in such person becoming
an Acquiring Person or cause the occurrence of a Triggering Event
(the existence of these circumstances being an "Adverse Change of
Control"), then the redemption of the Rights will require action
of a majority of at least two Continuing Directors. 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 $.001 redemption price.
<PAGE 3>
"Continuing Director" means (i) any member of the Board of
Directors of the Company who, while such person is a member of
the Board, is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and was a
member of the Board prior to the Record Date, or (ii) any Person
who subsequently becomes a member of the Board who, while such
Person is a member of the Board, is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or election
to the Board is recommended or approved by a majority of the
Continuing Directors of which there must be at least two then in
office.
At any time after a person becomes an Acquiring Person (but
before such Acquiring Person owns 50% or more of the Company's
outstanding Common Stock), the Board of Directors of the Company
(provided that at least a majority of the members thereof are
Continuing Directors) may exchange the then outstanding and
exercisable Rights (other than those owned by an Acquiring
Person), for shares of Common Stock, each Right being
exchangeable for one share of Common Stock, subject to
adjustment.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
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 earliest of (i) the Distribution Date, (ii) a
Triggering Event or (iii) an Adverse Change of Control. After
the first to occur of such events, the provisions of the Rights
Agreement may be amended with the approval of a majority of the
Continuing Directors then in office (provided that at least a
majority of the members of the Board of Directors are Continuing
Directors) (x) in any manner that will not adversely affect the
interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person), or (y) in order to cure any ambiguity or to
correct or supplement any provision contained herein which, in the
good faith determination of a majority of the Continuing Directors
then in office (provided that at least a majority of the members of
the Board of Directors are Continuing Directors), may be defective or
inconsistent with the other provisions contained herein, or (z)
to shorten or lengthen any time period hereunder; provided, however,
that the Rights Agreement cannot be supplemented or amended to lengthen
(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 an Acquiring Person, or any
Affiliate or Associate of an Acquiring Person).
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company without conditioning the offer on
a substantial number of Rights being acquired. Accordingly, the
existence
<PAGE 4>
of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the Rights help
ensure that the Company's shareholders receive fair and equal
treatment in the event of any proposed takeover of the Company.
A copy of the Rights Agreement, dated as of February 11,
1998, between the Company and the Rights Agent, specifying the
terms of the Rights (which Right Agreement includes as exhibits
the form of Rights Certificate and the Summary of Rights to
Purchase Preferred Stock) is attached hereto as an exhibit and
incorporated herein by reference. The foregoing description of
the Rights is qualified by reference to such exhibit.
Item 2. Exhibits
Exhibit Number Description of Exhibit Page Number
- ------------------ -------------------------------- -----------
1.1 Rights Agreement, dated as
of February 11, 1998, between
Penn Virginia Corporation and
American Stock Transfer & Trust
Company, which includes as
Exhibit B thereto the Form of
Right Certificate.
SIGNATURE
Pursuant to the requirements of section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
PENN VIRIGNIA CORPORATION
By: /S/ A. James Dearlove
-------------------------
Name: A. James Dearlove
Title: President and Chief
Executive Officer
February 20, 1998
Date: -----------------------
<PAGE 5>
EXHIBIT INDEX
Exhibit No.,
as provided in
Item 601 Exhibit Sequential
Number Description Page Number
- ------------------- ------------------------------ ------------
1.1 Rights Agreement, dated as
of February 11, 1998, between
Penn Virginia Corporation
and American Stock Transfer &
Trust Company, which includes
as Exhibit B thereto the Form
of Right Certificate.
EXHIBIT 1.1
<PAGE 6>
RIGHTS AGREEMENT
Between
PENN VIRGINIA CORPORATION
And
AMERICAN STOCK TRANSFER & TRUST COMPANY
Dated as of February 11, 1998
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Issue of Right Certificates 4
Section 4. Form of Rights Certificates 6
Section 5. Countersignature and Registration 8
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates 8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 9
Section 8. Cancellation and Destruction of Right
Certificates 11
Section 9. Reservation and Availability of Shares
of Capital Stock 11
Section 10. Preferred Stock Record Date 13
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights 13
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 22
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 22
Section 14. Fractional Rights and Fractional Shares 25
Section 15. Rights of Action 26
Section 16. Agreement of Rights Holders 27
Section 17. Right Certificate Holder Not Deemed a
Shareholder 27
Section 18. Concerning the Rights Agent 28
Section 19. Merger or Consolidation or Change of Name
or Rights Agent 28
Section 20. Duties of Rights Agent 29
Section 21. Change of Rights Agent 31
Section 22. Issuance of New Right Certificates 32
Section 23. Redemption and Termination 32
Section 24. Exchange 34
<PAGE i>
Section 25. Notice of Certain Events. 35
Section 26. Notices 36
Section 27. Supplements and Amendments 36
Section 28. Successors 37
Section 29. Determinations and Actions by the Board
of Directors . 37
Section 30. Benefits of this Agreement. 38
Section 31. Severability 38
Section 32. Governing Law 38
Section 33. Counterparts 38
Section 34. Descriptive Headings 38
Exhibit A Form of Articles of Amendment
Exhibit B Form of Right Certificate
Exhibit C Form of Summary of Right
<PAGE ii>
RIGHTS AGREEMENT
Rights Agreement, dated as of February 11, 1998, between Penn Virginia
Corporation, a Virginia corporation (the "Company"), and American Stock
Transfer
&Trust Company, a New York corporation (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one Right for each share of Common Stock of the
Company outstanding as of the Close of Business (as such terms are
hereinafter defined) on February 21, 1998 (the "Record Date"), and has
further authorized (i) the issuance of one Right with respect to each share
of Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date (as such term is defined in Section (3),
the Redemption Date and the Final Expiration Date (as such terms are defined
in Section (7) and (ii) in certain circumstances provided in Section 22, the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding between the Distribution Date and the earlier of the
Redemption Date and the Final Expiration Date, each Right initially
representing the right to purchase one one-thousandth 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 Articles of Amendment attached
hereto as Exhibit A, upon the terms and subject to the conditions herein set
forth (the "Rights").
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, and intending to be legally bound hereby, the parties
hereby agree as follows:
SECTION 1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding, but
shall not include any Exempt Person (as hereinafter defined). Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result of
any acquisition of beneficial ownership of shares of Common Stock by the
Company that, by reducing the number of shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) outstanding,
increases the percentage of shares of Common Stock beneficially owned by such
Person (together with all Affiliates and Associates of such Person) to15% or
more of the shares of Common Stock then outstanding; provided, however, that
if any Person (other than Exempt Persons) shall become the Beneficial Owner
of 15%or more of the shares of Common Stock then outstanding by reason of
share purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares of Common Stock
of the Company, then such Person shall be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the first sentence of this paragraph (a), has
<PAGE 1> become such
inadvertently, and such Person divests as promptly as practicable a
sufficient
number of shares of Common Stock so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not, solely as a result of such
inadvertent acquisition, be deemed to be an "Acquiring Person" for any
purpose
of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), as such rule is in effect on the Record Date.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own," and shall be deemed to have "beneficial
ownership" of, any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly has
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own (1)
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange, (2)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (3) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering Event,
if such Rights were acquired by such Person or such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 or pursuant to Section 11(a)(i) in connection with an adjustment
made with respect to any of the Rights heretofore specified in this clause
(3); or
(B) the right to vote or otherwise has "beneficial
ownership" (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, pursuant to this subparagraph (B), any security as a result of any
agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or successor
report); or
<PAGE 2>
(ii) that are beneficially owned, including pursuant to
subparagraphs (i)(A) and (B) of this subsection (c), directly or indirectly,
by any other Person (or 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 as described
in the provision in subparagraph (i) (B) of this subsection (c)) or disposing
of any securities of the Company; provided, however, that nothing in this
subsection (c) 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.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Philadelphia, Pennsylvania time, on such date; provided, however, that if
such date is not a Business Day, it shall mean 5:00 P.M., Philadelphia,
Pennsylvania time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall mean
the shares of Common Stock, par value $6.25 per share, of the Company.
"Common Stock" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting
power of such Person or, if such Person is a Subsidiary of another Person,
the Person or Persons that ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3.
(h) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company or (iv) any entity holding shares of Common Stock
for or pursuant to the terms of any such plan.
(i) "Final Expiration Date" shall have the meaning set forth in
Section 7.
(j) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(k) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $100 per share, of the Company
having the rights, powers and preferences set forth in the form of Articles
of Amendment attached hereto as Exhibit A and, to the extent that there are
not a sufficient number of shares of such of Series A Junior Participating
Preferred Stock authorized to permit the full exercise of the
<PAGE 3>
Rights, any other series of Preferred Stock, par value $100 per share, of the
Company designated for such purpose containing terms substantially similar to
the terms of such Series A Junior Participating Preferred Stock.
(l) "Redemption Date" shall have the meaning set forth in Section 7.
(m) "Section 11(a)(ii) Event" shall mean the event described in
Section 11(a)(ii).
(n) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(o) "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.
(p) "Subsidiary" of any Person shall mean any corporation or other
entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
(q) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agent as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such co-Rights Agent. In
the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.
SECTION 3. Issue of Right Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth calendar day after the Stock Acquisition
Date or (ii) the Close of Business on the tenth Business Day (or such later
date as the Board of Directors shall determine, provided that if such
determination occurs on or after the date of an Adverse Change in Control,
then such date may be extended only if there are at least two Continuing
Directors in office and such extension is authorized by a majority of such
Continuing Directors) after the date that a tender or exchange offer by any
Person (other than an Exempt Person) is first published or sent or given
within the meaning of Rule 14d-4(a) of the General Rules and Regulations
under the Exchange Act, the consummation of which would result in beneficial
ownership by a Person (other than an Exempt Person) of 15% or more of
<PAGE 4>
the outstanding shares of Common Stock (including any such date that is after
the date of this Agreement and prior to the issuance of the Rights) (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 shares of Common Stock registered
in the names of the holders thereof (which certificates shall also be deemed
to be Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection
with the transfer of shares of Common Stock. The Company shall give the
Rights Agent written notice of the Distribution Date as promptly as
practicable thereafter. As soon as practicable after the Distribution Date
and receipt of written notice of the Distribution Date from the Company, the
Rights Agent will send, by first class, insured, postage-prepaid mail, to
each record holder of shares of Common Stock as of the Close of Business on
the Distribution Date or, with respect to
shares of Common Stock so issued on or after the Distribution Date (unless
otherwise provided with respect thereto as aforesaid), to the record holder
of such shares of Common Stock on the date of issuance, at the address of
such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B, evidencing one Right for each share of
Common Stock so held, subject to adjustments 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(i) hereof, at the time of distribution of the
Right Certificate, the Company may make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Right
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 Right
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage-
prepaid mail, to each record holder of shares 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 shares of Common
Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for shares of Common Stock
registered in the names of the holders thereof (together with a copy of the
Summary of Rights). Until the earlier of the Distribution Date or Final
Expiration Date, the surrender for transfer of any certificate for shares of
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 shares of Common Stock represented thereby.
(c) Rights shall be issued in respect of all shares of Common Stock
which are issued (whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or Final Expiration Date, or in certain circumstances provided in
Section 22, after the Distribution Date. Certificates for shares of Common
Stock issued after the Record Date but prior to the earlier of the
<PAGE 5>
Distribution Date or the Final Expiration Date (including, without
limitation, reacquired shares of Common Stock referred to in the last
sentence of this paragraph (c)) shall have impressed on, printed on, written
on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Penn Virginia Corporation
(the "Company") and American Stock Transfer &
Trust Company, as Rights Agent, dated as of
February 11, 1998 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal executive offices of 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 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 following
receipt of a written request therefor. Under
certain circumstances, Rights beneficially owned
by Acquiring Persons or Associates or Affiliates
of Acquiring Persons (as such terms are defined
in the Rights Agreement) and any subsequent
holder of such Rights may become null and void.
With respect to such certificates bearing the foregoing legend, until
the earlier of the Distribution Date or the Final Expiration Date, the Rights
associated with the shares of Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of
shares 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 the shares of Common Stock
represented by such certificates. In the event that the Company purchases or
acquires any shares of Common Stock after the Record Date but prior to the
earlier of the Distribution Date or the Final Expiration Date, any Rights
associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock which are no longer outstanding.
SECTION 4. Form of Right Certificates. (a) The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially in the form of Exhibit B and
may have such marks of identification or designation and such legends,
summaries or endorsements printed
<PAGE>
thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights may from
time to time be listed or any national securities association on whose
interdealer quotation system the Rights may from time to time be authorized
for quotation, or to conform to usage. The Right Certificates shall be in a
machine printable format and in a form reasonably satisfactory to the Rights
Agent. Subject to the provisions of Section 22, the Right Certificates that
are issued in respect of shares of Common Stock that were issued and
outstanding as of the Record Date, shall be dated as of the Record Date, and
all Right Certificates that are issued in respect of other shares of Common
Stock shall be dated as of the respective dates of issuance of such shares of
Common Stock, and in either case on their faces shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price set forth therein
(such purchase price per one one-thousandth of a share, the "Purchase
Price"), but the number and type of securities purchasable upon
exercise of each Right and the Purchase Price shall be subject to adjustment
as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or Section 22
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 any Associate or Affiliate of an Acquiring Person) which
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or any Associate or Affiliate of an
Acquiring Person) 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
(or any Associate or Affiliate of such Acquiring Person) to holders of equity
interests in such Acquiring Person (or of such Associate or Affiliate) or to
any Person with whom the Acquiring Person has any agreement, arrangement or
understanding regarding the transferred Rights, or (B) a transfer that the
Board of Directors of the Company has determined is a part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) or Section 11 hereof, and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate
are or were beneficially owned by a Person who
was or became an Acquiring Person or an Affiliate
or an Associate of an Acquiring Person. This Right
Certificate and the Rights represented hereby may
become null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
<PAGE 7>
The absence of the foregoing legend on any Right Certificate shall in no
way affect any of the other provisions of this Agreement, including, without
limitation, the provisions of Section 7(e). The Company shall instruct the
Rights Agent in writing of the Rights which should be so legended and shall
supply the Rights Agent with such legended Right Certificates.
SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its chairman, its
president or a vice president, either manually or by facsimile signature, and
have affixed thereto the Company's seal or a facsimile thereof that shall be
attested by the secretary, or an assistant secretary or treasurer, of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificates may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the office of the Rights Agent designated for such
purposes, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights as
evidenced on the face of each of the Right Certificates and the date and
certificate number of each of the Right Certificates.
SECTION 6. Transfer, Split Up. Combination and Exchange of Right
Certificates; Mutilated. Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 4(b), Section 7(e), Section 11 and
Section 14, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of shares of Common Stock (or other securities or
other assets as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged, with the form of assignment and
certificate appropriately executed, at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with
<PAGE 8>
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e), Section 11 and Section 14,
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment by the holder of a Right Certificate of a sum sufficient to
cover any tax or charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right 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 Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11 (a)(iii) and Section
23(a)) in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the
Purchase Price with respect to the total number of one one-thousandths of a
share of Preferred Stock (or other securities, cash or other assets, as the
case may be) as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business February 11, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 (the "Redemption Date"), or (iii) the time at which such Rights
are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $100,
shall be subject to adjustment from time to time as provided in Sections 11
and 13 shall be payable in lawful money of the United States of America,
subject to paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase
<PAGE 9>
Price for the one one-thousandths of a share of Preferred Stock (or other
securities or other assets as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9(e) (as determined by the
Rights Agent), the Rights Agent shall, subject to Section 20(j), thereupon
promptly (i) (A) requisition from any transfer agent for such shares (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-thousandths 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-
thousandths 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 hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional interests in shares in
accordance with Section 14, (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 Right Certificates registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered older
of such Right Certificate. The payment of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)(iii)) may be made in cash or by
certified or bank check or money order payable to the order of the Company.
In the event the Company is obligated to issue other securities (including
shares of Common Stock) of the Company or distribute other property pursuant
to Section 11(a) hereof, the Company will make all arrangements necessary so
that such other securities or property are available for distribution by the
Rights Agent, if And when appropriate. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
(e) Notwithstanding anything to the contrary in this Agreement, from
and after the first occurrence of any Triggering Event, any Rights
beneficially owned by (i) any Acquiring Person (or any Associate or Affiliate
of an Acquiring Person), (ii) a transferee of an Acquiring Person (or any
Associate or Affiliate of an Acquiring Person) which becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or any Associate or Affiliate of an Acquiring Person) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and
<PAGE 10>
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) to holders of equity interests in such Acquiring
Person (or of such Associate or Affiliate) or to any Person with whom the
Acquiring Person has any 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 which
has as a primary purpose or effect the avoidance of this Section 7(e), shall
be null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) are complied with, but shall have no liability to any holder of
Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or such Section 4(b)
with respect to any Acquiring Person or any Associate or Affiliate of an
Acquiring Person or their transferees.
(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
transfer or exercise unless such registered holder shall have (i) completed
and signed the certificate following the form of assignment or election to
purchase set forth on the reverse side of the Right Certificate surrendered
for such assignment or 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 Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and
no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Right Certificates to
the Company.
SECTION 9. Reservation and Availabilitv of Shares of Capital Stock.
(a) Subject to the Company's rights under Section 11(a)(iii) hereof to
otherwise fulfill its obligations hereunder, 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 or any shares of Preferred Stock held
in its treasury (and, following the occurrence of a Triggering Event, out of
its authorized and unissued shares of Common Stock or other securities or out
of its authorized and issued shares of Common Stock or other securities held
in its treasury), the number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding Rights pursuant
to the terms of
<PAGE 12>
this Agreement; provided, however, that such action need not be taken with
respect to shares of Preferred Stock (or other securities) issuable upon
exercise of the Rights until after such time as the Rights become
exercisable, and with respect to shares of Common Stock (or other securities)
issuable upon occurrence of a Triggering Event until the occurrence of such
event.
So long as the shares of Preferred Stock issuable upon the exercise of Rights
may be listed on any national securities exchange or authorized for quotation
on any interdealer quotation system of any national securities association,
the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, 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 is
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Sections
11(a)(ii) (or Section 11(a)(iii)) and 13 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 "Securities
Act"), with respect to the shares of Preferred Stock or other 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 Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities or (B) the Final 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 ninety (90) days after the date
set forth in clause (i) of the first sentence of this paragraph, 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, in each case with
simultaneous written notice to the Rights Agent. 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 or the exercised thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective. The Rights Agent may assume that any Right exercised
is permitted to be exercised under applicable law and shall have no liability
for acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Preferred Stock or other
securities (including, following the occurrence of a Triggering Event, shares
of Common Stock) delivered
<PAGE 12>
upon exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that, subject to Sections
6 and 7(c), 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 Right Certificates or of any one one-thousandths of a share
of Preferred Stock (or shares of Common Stock or other securities or
property, 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 Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for
the one one-thousandths of a share of Preferred Stock (or shares of Common
Stock or other securities or property, as the case may be) in a name other
than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates or
depositary receipts for the one one-thousandths of a share of Preferred Stock
(or shares of Common Stock or other securities or property, as the case may
be) upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or shares of Common Stock or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of such fractional shares of Preferred Stock (or shares
of Common Stock or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which
the Preferred Stock (or Common Stock or other securities, as the cased 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 or other securities, as the case
may be) transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate, as such, shall
not be entitled to any rights of a shareholder of the Company with respect to
the shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of securities covered by
each Right
<PAGE 13>
and the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the shares of Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding shares of
Preferred Stock, (C) combine the outstanding shares of Preferred Stock into a
smaller number of shares of Preferred Stock or (D) issue any shares of its
capital stock in a reclassification of the shares of 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), the
Purchase Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and kind of
shares of capital stock that, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock (or other capital
stock, as the case may be) transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of
the securities of the Company issuable upon the exercise thereof. If an event
occurs that would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) In the event any Person, at any time after the date of this
Agreement, is or becomes an Acquiring Person, then, promptly following the
occurrence of such Section 11(a)(ii) Event, proper provision shall be made so
that each holder of a Right, except as provided in Section 7(e), shall
thereafter have a right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of the
number of one one-thousandths of a share of Preferred Stock for which a Right
was theretofore exercisable, such number of shares of Common Stock as shall
equal the result obtained by (x) multiplying the then current Purchase Price
by the number of one one-thousandths of a share of Preferred Stock for which
a Right was exercisable immediately prior to the first occurrence of the
Section 11(a)(ii) Event and (y) dividing that product (which, 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% of the current per
share market price of the shares of Common Stock (determined pursuant to
Section 11(d)) on the date of the occurrence of the Section 11(a)(ii) Event
(such number of shares is herein called the "Adjustment Shares"); provided,
however, that the Purchase Price and number of Adjustment Shares shall be
further adjusted as provided in this Agreement to reflect any event occurring
after the date of such first occurrence.
<PAGE 14>
(iii) In the event that, after the date of the occurrence of such
a Section 11 (a)(ii) Event, the number of shares of Common Stock which is
authorized by the Company's 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, the Company
shall: (A) determine the excess of (1) the value of the Adjustment Shares in
accordance with Section 11(a)(ii) issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess is herein called
the "Spread"), and (B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares upon exercise of the Rights, (1) cash,
(2) a reduction in the Purchase Price, (3) shares of Common Stock of the same
or different class or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock which the
Board of Directors of the Company has deemed to have substantially the same
economic value as shares of Common Stock (such shares or units of shares of
preferred stock are referred to herein 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 thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the later of
(x), and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread.
If the Board of Directors of the Company shall determine in good faith that
it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the extent necessary, but
not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, as
the case may be, in order that the Company may seek shareholder 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 should 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 securities 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 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 the shares of Common Stock shall be the
current per share market price per share of Common Stock (as defined in
Section 11(d)) on the Section
<PAGE 15>
11(a)(ii) Trigger Date, and the value of any "Common Stock equivalent" shall
be deemed to have the same value as the shares of 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
referred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock, or
shares having the same rights, privileges and preferences as Preferred Stock
("equivalent preferred stock"), or securities convertible into Preferred
Stock or equivalent preferred stock at a price per share of Preferred Stock
or 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 per share market price of Preferred Stock (as determined
pursuant to Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of shares of Preferred Stock
which 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 in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holders of 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 that
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash or
assets (other than a regular quarterly cash dividend out of the earnings or
retained earnings of
the Company or a dividend payable in Preferred Stock but including a dividend
payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)), the Purchase Price
to be in effect after such record date shall be determined by multiplying the
Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of the
referred Stock (as determined pursuant to Section 11(d)) on such record date
less the fair market
<PAGE 16>
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights)
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 per
share market price of the Preferred Stock (as determined pursuant to Section
11(d)). Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price that would
then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder (other than
computations made pursuant to Section 11(a)(iii) hereof), the "current per
share market price" of the shares of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such shares of
Common Stock for the thirty (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 per
share market price" of shares of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such shares of Common
Stock for the ten (10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the current per share market
price of the shares of Common Stock is determined during a period following
the announcement by the issuer of such shares of Common Stock of (1) a
dividend or distribution on such shares of Common Stock payable in such
shares of Common Stock or securities convertible into such shares of Common
Stock (other than the Rights), or (2) any subdivision, combination or
reclassification of such shares of Common Stock, and prior to the expiration
of thirty (30) Trading Days, or ten (10) Trading Days, 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 per share market price shall be appropriately adjusted
to take into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the 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 price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or if on any such date the
shares of Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market
maker making a market in the shares of Common
<PAGE 17>
Stock selected by the Board of Directors of the Company. If on any such date
no market maker is making a market in the shares of Common Stock, the fair
value of the shares of Common Stock 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 shares of Common Stock are not publicly held or not so listed or
traded, "current per share market price" shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. The "current per share market
price" of the Preferred Stock shall be determined in the same manner as set
forth above for the Common Stock (other than the last sentence thereof). If
the current per share market price 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 above, the current per share market
price of Preferred Stock shall be conclusively deemed to be an amount equal
to 1,000 (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 per share market price of the Common Stock. If neither the Common
Stock nor the Preferred Stock is publicly held or so listed or traded, the
current per share market price of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments that by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one 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 (3) years from the date of the transaction which
mandates such adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 1 3(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in Section 11(a), (b),
<PAGE 18>
(c), (e), (g), (h), (i), (j), (k) and (m) and the provisions of Sections 7,
9, 10, 13 and 14 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-thousandths
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-thousandths of a share of Preferred Stock (calculated to the nearest one-
millionth) obtained by (i) multiplying (x) the number of one one-thousandths
of a share of Preferred Stock covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths 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 that time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11 (i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights on such record date Right Certificates evidencing,
subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holder shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and
<PAGE 19>
countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one one-
thousandths of a share of Preferred Stock that were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Preferred Stock
issuable upon exercise of the Rights, 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 fully paid and nonassessable shares
of Preferred Stock (or fractions thereof) 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 issuing to the holder of any Right exercised after such record date
the number of one one-thousandths 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 of one one-thousandths of a share of
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) 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 any shares of Preferred Stock or other securities
that by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) dividends on shares of Preferred Stock payable in
shares of Preferred Stock or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to
holders of its shares of Common Stock shall not be taxable to such
shareholders.
<PAGE 20>
(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 which complies with Section
11(o) hereof), (ii) merge with or into or engage in a share exchange with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11 (o) hereof), if (x) at the time of or immediately after such
consolidation, merger, share exchange or sale there are any rights, warrants,
or other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, share exchange or sale, the shareholders of
the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) shall have received a distribution of Rights
(o) The Company covenants and agrees that, after the Distribution
Date, it shall not, except as permitted by Section 23, Section 24 or Section
27 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 the Company shall at any time after the date of this Agreement 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.
(q) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement and
prior to the Distribution Date consolidate with, or merge with or into, any
other Person for the primary purpose of a change of domicile of the Company,
and, in connection with such consolidation or merger, all of the outstanding
shares of Common Stock shall be
<PAGE 21>
changed into or exchanged for shares of Common Stock of the surviving
corporation of such consolidation or merger (the "Surviving Corporation"),
then proper provision shall be made so that Rights shall be associated with
each share of Common Stock of the Surviving Corporation, except as provided
in Section 7(e) hereof, such that the number of Rights associated with each
share of Common Stock of the Surviving Corporation 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
of the Surviving Corporation which the shares of Common Stock were changed
into or exchanged for pursuant to the consolidation or merger. Following such
a consolidation or merger, this Agreement shall remain in effect and all
references to the Company shall be deemed to be references to the Surviving
Corporation.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13,
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 shares of Common Stock and Preferred Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of
a Right Certificate (or, if prior to the Distribution Date, to each holder of
a certificate representing shares of Common Stock) in accordance with Section
25. The Rights Agent shall be fully protected in relying on such certificate
and on any adjustment contained therein and shall not be deemed to have
knowledge of any adjustment unless and until it shall have received such
certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Stock Acquisition Date,
directly or indirectly (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which 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 which complies with Section 11(o) hereof) shall engage in a share
exchange with or shall consolidate with, or merge with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
share exchange, consolidation or merger and, in connection with such share
exchange, 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 any other Person or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one or
more transactions each of which
<PAGE 22>
complies with Section 11(o) hereof), then, and in each such case proper
provision shall be made so that
(i) each holder of a Right, except as provided in Section 7(e)
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 call, 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-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
Purchase Price in effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
first occurrence of a Section 11(a)(ii) Event) and (2) dividing that product
(such product following the first occurrence of a Section 13 Event shall be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the current per share market price of the shares of
Common Stock of such Principal Party (determined pursuant to Section
11(d)) on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of 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 Section 13 Event.
If, in the case of a transaction of the kind described in clause (z) of
the first sentence of this Section 13(a), the Person or Persons to whom
assets or earning power are sold or otherwise transferred are individuals,
then the preceding sentences of this Section 13(a) shall be inapplicable, and
the Company shall require as a condition to
<PAGE 23>
such sale or transfer that such Person or Persons pay to each holder of a
Right Certificate, upon its surrender to the Rights Agent and in exchange
therefor (without requiring payment by such holder), cash in the amount
determined by multiplying the then current Purchase Price by the number of
shares of Common Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in cause (x) or (y)
of the first sentence of Section 13(a), the Person that is the issuer of any
securities for or into which shares of Common Stock of the Company are
converted in such share exchange, merger or consolidation, and if no
securities are so issued, the Person that is the other party to such merger
or consolidation; and
(ii) in the case of any transaction described in cause (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; provided, however, that in any such case (1) if
the shares of Common Stock of such Person are not at such time and have not
been continuously over the preceding twelve (12) month period registered
under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the shares of Common Stock of which are and have
been so registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the shares of Common Stock of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the shares of Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of Common
Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any such Section 13
Event, the Principal Party will
<PAGE 24>
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the 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 Securities Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdiction as may be necessary or appropriate; and
(iii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
(d) In no event shall the Rights Agent have any liability hereunder in
respect of any such Principal Party transactions, including, without
limitation, the propriety thereof. The Rights Agent may rely and be fully
protected in relying upon a certificate of the Company stating that the
provisions of this Section 13 have been fulfilled. The provisions of this
Section 13 shall similarly apply to successive share exchanges, mergers or
consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the first occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or to distribute Right
Certificates that evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board
of Directors of the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
<PAGE 25>
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandths of a share of Preferred Stock) upon exercise of the Rights or
to issue certificates that evidence fractions of shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandths of
a share of Preferred Stock). In lieu of fractional interests in shares of
Preferred Stock that are not integral multiples of one one- thousandths of a
share of Preferred Stock, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of
one share of Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-thousandth of a share of Preferred Stock shall be one
one-thousandth of the closing price of a share of Common Stock (as determined
pursuant to Section11 (d) 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 which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may
pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction
of the current market value of 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 a share of Common Stock (as determined pursuant
to Section 11(d) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
(except as provided by this Section 14) upon exercise of a Right.
SECTION 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the shares of Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the shares of
Common Stock), without the consent of the Rights Agent or of the holder of
any other Right Certificate (or, prior to the Distribution Date, of the
shares of Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the
<PAGE 26>
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Right Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to Section
7(e), shall 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. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one one-
thousandths of a share of Preferred Stock or any other securities of the
Company that may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a 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
<PAGE 27>
notice of meetings or other actions affecting shareholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
SECTION 18. Concerning the Riqhts Aqent. (a) The Company agrees to
pay to the Rights Agent such compensation as shall be agreed upon between the
Company and the Rights Agent for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom. The
provisions of this Section 18(a) shall survive the expiration of the Rights
and 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
Right Certificate or certificate for shares of 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 by the proper Person or Persons and, where
necessary, to be verified or acknowledged.
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 all
or substantially all the stock transfer or corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of
the Right Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
<PAGE 28>
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name, and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent.
(a) The Rights Agent may consult with legal counsel of its selection
(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 or existence of any Acquiring
Person and the determination of "current per share 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 any one of the chairman of the board,
the president, any vice president, the secretary, an assistant secretary or
the treasurer of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any
<PAGE 29>
Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11 or
Section 13 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Common Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable, nor shall the
Rights Agent be responsible for the legality of the terms hereof in its
capacity as an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the board, the president, any vice president, the
secretary or 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 or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents (other than employees), and the Rights
Agent shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.
<PAGE 30>
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the
Company.
(k) No provision of this Agreement shall require the Rights Agent to
advance funds to third parties unless the Rights Agent shall have been
indemnified therefor to the reasonable satisfaction of the Rights Agent by
the Company or its designee.
(l) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or
omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of
assignment and the form of election to purchase attached hereto unless the
Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution (except by the persons
referred to in Section 7(e)) of such certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice
of any event or ownership known to the Company which would prohibit the
exercise or transfer of the Right Certificates.
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 sixty (60) days' notice in writing mailed to the Company
and to each transfer agent of the shares of Common Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the shares of Common Stock by registered or certified mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
Rights Agent or the holder of record of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the
laws of the United States or any state of the United States so long as such
corporation is authorized to do business as a banking institution, is in good
standing, is authorized under such laws to exercise corporate trust powers,
and is subject to the supervision or examination by federal or
<PAGE 31>
state authority, and has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $10 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment the Company shall file notice with the predecessor Rights
Agent and each transfer agent of the shares of Common Stock, and mail a
notice thereof in writing to the holders of record of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by the Board of Directors of the Company,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or to the Person to
whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate
adjustments 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 calendar
day following the Stock Acquisition Date (or, if the Stock Acquisition Date
occurred prior to the Record Date, the Close of Business on the tenth
calendar day following such Record Date) or (ii) the Close of Business on the
Final Expiration Date, redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, that if such
authorization occurs on or after the date of a change
<PAGE 32>
(resulting from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation, and any Person
who is or was a participant in such solicitation has stated (or if upon the
commencement of such solicitation, a majority of the Board of Directors of
the Company has determined in good faith) that such Person (or any of its
Affiliates or Associates) has taken or intends to take, or may consider
taking, any action that would result in such Person becoming an Acquiring
Person or that would cause the occurrence of a Triggering Event (the
existence of the circumstances described in this provision being referred to
herein as an "Adverse Change of Control"), then the Rights may be so redeemed
only if there are at least two Continuing Directors (as hereinafter defined)
in office and such redemption is authorized by a majority of such Continuing
Directors. Notwithstanding the foregoing, in the event payment of the
Redemption Price to a holder of Rights would result in the payment of an
amount not equal to $.01 or an integral multiple of $.01, the amount to be
paid shall be rounded upward to the next $.01. "Continuing Director" shall
mean (i) any member of the Board of Directors of the Company who, while such
person is a member of the Board, is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an Acquiring
Person or of any such Affiliate or Associate, and was a member of the Board
prior to the Record Date, or (ii) any Person who subsequently becomes a
member of the Board who, while such Person is a member of the Board, is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or
a representative of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing
Directors of which there must be at least two then in office. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until
such time as the Company's right of redemption set forth in the first
sentence of this Section 23(a) has expired. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on the
current market price per share at the time of redemption) or any other form
of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the shares of 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
will state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 and Section
<PAGE 33>
24 hereof and other than in connection with the purchase of shares of Common
Stock prior to the Distribution Date.
SECTION 24. Exchange.
(a) The Board of Directors of the Company (provided that at least a
majority of the members of the Board of Directors are Continuing Directors)
may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for shares of Common Stock, each Right being
exchangeable for one share of Common Stock, appropriately adjusted to reflect
any transaction specified in Section 11(p) occurring after the date hereof
(such number of shares of Common Stock issuable in exchange for one Right
being referred to herein as the "Exchange Shares"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than any Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive the Exchange Shares. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Rights Agent.
Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding, or authorized but unissued, to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights or
shall take such other action specified in Section 11(a)(iii) hereof.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In
<PAGE 34>
lieu of such fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole share
of Common Stock. For the purposes of this subsection (d), the current market
value of a whole share of Common Stock shall be the closing price of a share
of Common Stock (as determined pursuant to the second and third sentences of
Section 11(d) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
SECTION 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its shares of Preferred Stock
or to make any other distribution to the holders of its shares of Preferred
Stock (other than a regular quarterly cash dividend) or (ii) to offer to the
holders of its shares 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 its shares of Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Common 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 that
complies with Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more 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 Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action that shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the 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 twenty (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 twenty (20) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the shares of
Preferred Stock, whichever shall be the earlier.
(b) In case a Triggering Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder
of a Right Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii) or Section 13 and
(ii) all references in the preceding paragraph to shares of Preferred Stock
shall be deemed thereafter to refer to shares of Common Stock and/or, if
appropriate, other securities.
<PAGE 35>
The failure to give notice required by this Section 25 or any defect therein
shall not affect the legality or validity of the action taken by the Company
or the vote on any such action.
SECTION 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Penn Virginia Corporation
One Radnor Corporate Center, Suite 200
Radnor, PA 19087
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first- class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
6201 15th Avenue, 3rd floor
Brooklyn, NY 11219
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right 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 27. Supplements and Amendments. Prior to the earliest of (i)
the Distribution Date, (ii) the occurrence of a Triggering Event or (iii) an
Adverse Change of Control, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including supplements or amendments that may be deemed to affect the
interests of the holders of Right Certificates adversely) without the
approval of any holders of certificates representing shares of Common Stock
and associated Rights. From and after the earliest of (i) the Distribution
Date, (ii) the occurrence of a Triggering Event or (iii) an Adverse Change of
Control, the Company may and the Rights Agent shall, if the Company so
directs (upon approval of a majority of the Continuing Directors then in
office (provided that at least a majority of the members of the Board of
Directors are Continuing Directors)), supplement or amend this Agreement
without the approval of any holders of Right
<PAGE 36>
Certificates (x) in any manner that will not adversely affect the interests
of the holders of Right Certificates (other than an Acquiring Person, or an
Affiliate or Associate of any such Acquiring Person), or (y) in order to cure
any ambiguity or to correct or supplement any provision contained herein
which, in the good faith determination of a majority of the Continuing
Directors then in office (provided that at least a majority of the members of
the Board of Directors are Continuing Directors, may be defective or
inconsistent with the other provisions contained herein, or (z) to shorten or
lengthen any time period hereunder; provided, however, that from and after
the earliest of (i) the Distribution Date, (ii) the occurrence of a
Triggering Event or (iii) an Adverse Change in Control, this Agreement shall
not be supplemented or amended to lengthen (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 an Acquiring Person, or any
Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an officer of the Company or, so long as any
Person is an Acquiring Person hereunder, the Continuing Directors (provided
that at least a majority of the member of the Board of Directors are
Continuing Directors) state that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made that
changes the Redemption Price, accelerates the Final Expiration Date, changes
the Purchase Price, or changes the number of one one-thousandths 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 shares of Common Stock.
SECTION 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 29. Determinations and Actions by the Board of Directors. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d) (1)(i) of te General
Rules and Regulations under the Exchange Act. The Board of Directors of the
Company (with, where specifically provided for herein, the concurrence of
that number of Continuing Directors as provided herein) shall have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board (with, where
specifically provided for herein, that number of Continuing Directors as
provided herein) or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement, and (ii)
make all determinations deemed necessary or advisable for the administration
of this Agreement (including a determination to redeem or not redeem the
Rights or to amend
<PAGE 37>
the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board of
Directors of the Company (with, where specifically provided for herein, the
concurrence of that number of Continuing Directors as provided herein) in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board or the Continuing Directors to any liability to the holders
of the Rights.
SECTION 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the shares of Common
Stock) any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the shares of Common Stock).
SECTION 31. Severability. If any term, provisions, 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 of this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of
such determination by the Board of Directors.
SECTION 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Virginia and for all purposes shall be governed
by and construed in accordance with the laws of such Commonwealth applicable
to contracts to be made and performed entirely within such Commonwealth,
provided, however, that the rights and obligations of the Rights Agent shall
be governed by and construed in accordance with the laws of the State of New
York.
SECTION 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
SECTION 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or
<PAGE 39>
affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
PENN VIRGINIA CORPORATION
By: /s/ A.James Dearlove
-------------------------------
Name: A. James Dearlove
Title: President and Chief Executive
Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Herbert J. Lemmer
--------------------------------
Name: Herbert J. Lemmer
Title: Vice President
Exhibit A
FORM OF ARTICLES OF AMENDMENT
OF
THE ARTICLES OF INCORPORATION
OF
PENN VIRGINIA CORPORATION
Under Section 13.1-639 of the Virginia Stock Corporation Act
FIRST: The name of the Corporation is Penn Virginia Corporation
SECOND: The amendment adopted is to add a new Paragraph to the end
of Article Six to read as follows:
"SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
(e) Establishment of Series. There is hereby established a series of
the Company's authorized Preferred Stock, to be designated as the "Series A
Junior Participating Preferred Stock, par value $100 per share." The
designation and number, and relative rights, preferences and limitations of
the Series A Junior Participating Preferred Stock, insofar as not already
fixed by any other provision of these Articles of Incorporation, shall be as
follows:
Section 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series A Junior Participating Preferred
Stock," and the number of shares initially constituting such series shall be
15,000.
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 of the Company ranking
prior and superior to the shares of Series A Junior Participating Preferred
Stock, 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 first day of January, April, July and October in each
year or such other quarterly payment date as shall be specified by the Board
of Directors (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 the Series
A Junior Participating Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (i) $0.01 or (ii) subject to the
provision for adjustment hereinafter set forth, 1,000 times the aggregate per
<PAGE A-1>
share amount of all cash dividends, and 1,000 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, $6.25 par value (the "Common Stock"), of the
Company 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 the Series A Junior
Participating Preferred Stock. In the event the Company shall at any time
after February 11, 1998 (the "Rights Declaration Date") (i) declare any
dividend on 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, 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 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 Company shall declare a dividend or distribution
on 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,
however, 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 $.01 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.
<PAGE A-2>
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 1,000 votes on all matters submitted to a vote
of the shareholders of the Company. In the event the Company 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 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 shareholders of the Company.
(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
(6) 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 shares of Series A Junior Participating
Preferred Stock with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class together with holders of any
other shares of preferred stock of the Company upon which like voting rights
have been conferred and are then exercisable, irrespective of series, shall
have the right to elect two (2) Directors.
(ii) During any default period, such voting right of
the holders of shares 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 shareholders, and
thereafter at annual meetings of shareholders, provided that such voting
right shall not be exercised unless the holders of ten percent (10%) in
number of shares of preferred stock having the voting rights set forth above
that are 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 such preferred stock of such voting right. At any meeting at
which the holders of such 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
<PAGE A-3>
fill such vacancies, if any, in the Board of Directors as may then exist up
to two (2) Directors or, if such right is exercised at an annual meeting, to
elect two (2) Directors. If the number which may be so elected at any
special meeting does not amount to the required number, the holders of such
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 such 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 such 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 such preferred stock
shall, during an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order, or any
shareholder or shareholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of such preferred stock outstanding,
irrespective of series, may request the calling of a special meeting of the
holders of such preferred stock, which meeting shall thereupon be called by
the President, a Vice President or the Secretary of the Company. Notice of
such meeting and of any annual meeting at which holders of Preferred Stock
are entitled to vote pursuant to this Paragraph (c)(iii) shall be given to
each holder of record of such preferred stock by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Company. 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 shareholder or shareholders
owning in the aggregate not less than ten percent (10%) of the total number
of shares of such 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 shareholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Company if applicable, shall
continue to be entitled to elect the whole number of Directors until the
holders of such preferred stock shall have exercised their right to elect two
(2) Directors voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of such 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,
<PAGE A-4>
(x) the right of the holders of such preferred stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the holders
of such preferred stock as a class shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the Certificate 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 Certificate 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 shares 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 herein 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 Company 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 Company may at any time
redeem purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A
Junior Participating Preferred Stock; or
(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
<PAGE A-5>
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 Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of
stock of the Company unless the Company could, under Section 4(a) herein,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued preferred stock of the Company 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.
Section 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Company, 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 an amount equal to
$1,000 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) 1,000 (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), 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 shares 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 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
<PAGE A-6>
assets shall be distributed ratably to the holders of shares of Common Stock.
(c) In the event the Company 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 outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company 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 1,000 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 Company 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
shares of Common Stock, or (iii) combine the outstanding shares of 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 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 Company's Preferred Stock
as to the payment of dividends and the distribution of assets, except that
the Series A Junior Participating Preferred Stock shall rank on a parity with
the Series A Junior Participating Preferred Stock of the Company as to
dividends and the distribution of assets.
Section 10. Amendment. The Certificate, including, without
limitation, this resolution, shall not hereafter be amended, either directly
or indirectly, or through
<PAGE A-7>
merger or consolidation with another corporation, in any manner that 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 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 shares of Series A Junior
Participating Preferred Stock."
THIRD: This amendment of the Articles of Incorporation was duly
adopted by the Board of Directors of the Corporation on February 11, 1998,
without shareholder action, which shareholder action was not required.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment as of this 11th day of February, 1998.
PENN VIRGINIA CORPORATION
By /s/ A. James Dearlove
----------------------
A. James Dearlove
President and Chief
Executive Officer
<PAGE A-8>
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
-------------- -----------------
NOT EXERCISABLE AFTER FEBRUARY ___, 2008 OR EARLIER IF
NOTICE OF REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON. THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCE SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.] <F1>
Right Certificate
Penn Virginia Corporation
This certifies that ________________, or registered assigns,
is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of
February 11, 1998 (the "Rights Agreement"), between Penn Virginia
Corporation, a Virginia corporation (the "Company"), and American
Stock Transfer & Trust Company (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Radnor, Pennsylvania time) on February 11, 2008 at the office of
the Rights Agent designated for such purpose, or at the office of
its successors as Rights Agent, one one-thousandth of a share of
Series A Junior Participating Preferred Stock, par value $100 per
share (the "Preferred Stock"), of the Company, fully paid and
nonassessable (or in certain circumstances, cash, property or
other securities of the Company), at a purchase price of $100,
subject to adjustment (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election
to Purchase duly executed.
<PAGE B-1>
The number of Rights evidenced by this Right Certificate (and
the amount of Preferred Stock which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of February
___, 1998 based on the shares of Common Stock, par value $6.25
per share, of the Company as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the amount of Preferred Stock or other securities that may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as such
term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part thereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates.
Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned offices
of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate amount of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may, but are not required to, be
redeemed by the Company at a redemption price of $.001 per Right
(subject to adjustment).
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the shares of Preferred Stock or of any
other securities of the Company that may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
<PAGE B-2>
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of __________________.
PENN VIRGINIA CORPORATION
By: _____________________________________
Attest:
By: _______________________________________
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: _________________________________________
<PAGE B-3>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Right Certificates)
FOR VALUE RECEIVED ______________________________________
hereby sells, assigns and transfers unto _______________________
_________________________________________________________________
_________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: _______________________ , ____
____________________________________
Signature
Signature Guaranteed: _______________________________
Signatures must be guaranteed by a member firm of a
registered United States national securities exchange, a member
of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or
correspondent in the United States.
<PAGE B-4>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire
the Rights evidenced by this Right Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person.
Dated: _____________________ , ______
_______________________________
Signature
Signature Guaranteed: _______________________________
Signatures must be guaranteed by a member firm of a registered
United States national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States.
<PAGE B-5>
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the Certificate set forth in the Assignment is
not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person
(as defined in the Rights Agreement), and such Assignment will
not be honored.
<PAGE B-6>
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires
to exercise Rights represented by the Right Certificates)
To: Penn Virginia Corporation
The undersigned hereby irrevocably elects to exercise _____
Rights represented by this Right Certificate to purchase the
number of shares of Preferred Stock (or fractions thereof)
issuable upon the exercise of such Rights (or such other
securities of the Company or of any other person which may be
issuable upon exercise of the Rights) and requests that
certificates for such securities be issued in the name of and
delivered to:
_________________________________________________________________
(please print name and address)
_________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the name
of and delivered to:
_________________________________________________________________
(please print name and address)
_________________________________________________________________
(Please insert social security or other identifying number)
Signature Guaranteed: _______________________________
Signatures must be guaranteed by a member firm of a registered
United States national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States.
<PAGE B-6>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined in the Rights
Agreement), and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire
the Rights evidenced by this Rights Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person
Dated: _________________, _____
____________________________________
Signature
Signature Guaranteed: _______________________________
Signatures must be guaranteed by a member firm of a registered
United States national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States.
_________________________________________________________________
NOTICE
The signatures to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
In the event the Certificate set forth in the Election to
Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as defined in the Rights Agreement), and such
Election to Purchase will not be honored.
<F1> This portion of the legend shall be modified to apply to
an Acquiring Person as applicable and shall replace the
preceding sentence.
<PAGE B-7>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
The Board of Directors of Penn Virginia Corporation (the "Company") has
declared a dividend distribution of one preferred stock purchase right (the
"Rights") for each outstanding share of Common Stock, par value $6.25 per
share (the "Common Stock"), of the Company to shareholders of record at the
close of business on February 21, 1998. Each Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of Series A
Junior Participating Preferred Stock, par value $100 per share (the
"Preferred Stock") (or in certain circumstances, cash, property, or other
securities of the Company), at a Purchase Price of $100, subject to
adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement"), dated as of
February 11, 1998, between the Company and American Stock Transfer & Company,
as Rights Agent (the "Rights Agent"). Capitalized terms used but not
otherwise defined herein will have meanings given such terms in the Rights
Agreement.
Initially, the Rights will be evidenced by the certificates representing
shares of Common Stock then outstanding, and no separate Right Certificates
will be distributed. The Rights will separate from the Common Stock and
become exercisable upon the earlier of (i) ten calendar days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Stock Acquisition Date")
or (ii) ten business days (or a later date as is determined by the Board of
Directors, or if there has been an Adverse change of Control, by a majority
of the Continuing Directors (as such terms are herein defined)) (provided
that there are at least two Continuing Directors in office) after the
commencement of, or first public announcement of an intention to commerce, a
tender offer or exchange offer that would result in a person or group
beneficially owning 15% or more of such outstanding shares of Common Stock
(the earlier of such dates being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
the Record Date will contain in accordance with the Rights Agreement a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock outstanding will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on February 11, 2008, unless earlier redeemed
or exchanged by the Company as described below.
<PAGE C-1>
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date, and thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise provided
by the Rights Agreement or determined by the Board of Directors, only shares
of Common Stock issued prior to the Distribution Date will be issued with
Rights.
In the event that a person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, shares of
Common Stock (or in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the Purchase Price of the
Right. Notwithstanding the foregoing, following the occurrence of such an
event or any other Triggering Event (as defined below), all rights that are,
or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
After the Stock Acquisition Date, in the event that (i) the Company
consolidates or merges with any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding shares of
Common Stock of the Company are exchanged for securities, cash or property of
the other person and the Company is the surviving corporation or (iii) 50% or
more of the Company's assets or earning power is sold or transferred, proper
provision will be made so that each holder of a Right shall thereafter have
the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price of the Right. The
events set forth in this paragraph and the preceding paragraph are referred
to as the "Triggering Events".
The Purchase Price payable, and the number of shares of Common Stock or
other securities, cash or property issuable, upon exercise of the Rights are
subject to customary adjustments from time to time to prevent dilution in the
event of certain changes in the shares of the Company. With certain
exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments amount to an increase or decrease of at least 1% in
the Purchase Price.
In general, the Company may redeem the Rights in whole, but not in part,
at a price of $.001 per Right, (subject to adjustment), at any time before
the close of business on the tenth calendar day following the Stock
Acquisition Date; provided, however, that if the authorization to redeem the
Rights occurs on or after the date of a change in a majority of the Board of
Directors of the Company as a result of a proxy or consent solicitation and a
person who was a participant in such solicitation has stated that such person
(or any of its Affiliates or Associates) has taken or intends to take or may
consider taking actions that would result in such person becoming an
Acquiring Person or cause the occurrence of a Triggering Event (the existence
of these circumstances being an "Adverse Change of Control"), then the
redemption of the Rights will require the approval of a majority of the
Continuing Directors of which there
<PAGE C-2>
must be at least two then in office. 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
$.001 redemption price.
"Continuing Director" means (i) any member of the Board of Directors of
the Company who, while such person is a member of the Board, is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate,
and was a member of the Board prior to the Record Date, or (ii) any Person
who subsequently becomes a member of the Board who, while such Person is a
member of the Board, is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or a representative or nominee of an Acquiring Person
or of any such Affiliate or Associate, if such Person's nomination for
election or election to the Board is recommended or approved by a majority of
the Continuing Directors of which there must be at least two then in office.
At any time after a person becomes an Acquiring Person (but before such
Acquiring Person owns 50% or more of the Company's outstanding Common Stock),
the Board of Directors of the Company (provided that at least a majority of
the members of the Board of Directors are Continuing Directors) may exchange
the then outstanding and exercisable Rights (other than those owned by an
Acquiring Person), for shares of Common Stock, each Right being exchangeable
for one share of Common Stock, subject to adjustment.
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.
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 earliest of (i) the
Distribution Date, (ii) a Triggering Event or (iii) an Adverse Change of
Control. After the first to occur of such events, the provisions of the
Rights Agreement may be amended with the approval of a majority of the
Continuing Directors (provided that at least a majority of the members of the
Board of Directors are Continuing Directors) (x) in any manner that will not
adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person, or an Affiliate or Associate of any such Acquiring
Person), or (y) in order to cure any ambiguity or to correct or supplement
any provision contained herein which, in the good faith determination of a
majority of the Continuing Directors then in office (provided that at least a
majority of the members of the Board of Directors are Continuing Directors),
may be defective or inconsistent with the other provisions contained herein,
or (z) to shorten or lengthen any time period hereunder; provided, however,
that the Rights Agreement cannot be supplemented or amended to lengthen (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
<PAGE C-4>
Rights (other than an Acquiring Person, or any Affiliate or Associate of an
Acquiring Person).
The Rights have certain anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire the
Company without conditioning the offer on a substantial number of Rights
being acquired. Accordingly, the existence of the Rights may deter certain
acquirors from making takeover proposals or tender offers. However, the
Rights help ensure that the Company's shareholders receive fair and equal
treatment in the event of any proposed takeover of the Company.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
Once the Rights are issued, a copy of the Rights Agreement will be available
to registered holders of the Rights upon written request free of charge from
the Rights Agent. 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.
