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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934
______________
NOBLE DRILLING CORPORATION
(Exact name of registrant as specified in is charter)
<TABLE>
<S> <C>
Delaware 73-0374541
(State of incorporation) (I.R.S. employer identification number)
10370 Richmond Avenue, Suite 400
Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code:
(713) 974-3131
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. / /
If this Form relates to the registration of a class of debt securities and is
to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. / /
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Preferred Stock Purchase Rights
(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On June 28, 1995, the Board of Directors of Noble Drilling Corporation
(the "Company") authorized and declared a dividend of one Right (a "Right") for
each outstanding share of Common Stock, par value $.10 per share ("Common
Stock"), of the Company (the "Common Shares"). The dividend is payable on July
10, 1995 (the "Record Date") to the holders of record of the Common Shares at
the close of business on that date. In addition, the Company has authorized
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, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined). When exercisable each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $1.00 per share, of the Company
(the "Preferred Shares"), at a price of $35.00 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Liberty Bank and Trust Company of Oklahoma
City, N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15 percent or more of
the outstanding Common Shares and (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors of the Company prior to
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person) following the commencement of, or first public announcement
of an intention to commence, a tender offer or exchange offer the consummation
of which would result in the beneficial ownership by a person or group of
affiliated or associated persons of 15 percent or more of the outstanding
Common Shares (the earlier of such dates being herein referred to as the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificate with a copy of a Summary of Rights to Purchase Preferred
Shares ("Summary of Rights"), in substantially the form attached to the Rights
Agreement as Exhibit C, attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date, upon transfer or new issuance of Common Shares, will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding on or
after the Record Date, even without such notation or a copy of the Summary of
Rights being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
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The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 10, 2005 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
subject to redemption by the Company. Each Preferred Share will be entitled to
a minimum preferential quarterly dividend payment of $.01 per share but will be
entitled to an aggregate dividend of 100 multiplied times the dividend declared
per Common Share. In the event of liquidation, the holder of the Preferred
Shares will be entitled to a minimum preferential liquidation payment of $1.00
per share but will be entitled to an aggregate payment of 100 multiplied times
the payment made per Common Share. Each Preferred Share will have 100 votes,
voting together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 multiplied times the amount
received per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50 percent or more of its consolidated
assets or earning power are sold after a person or group of affiliated or
associated persons has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction will have a market value of two times the exercise price of
the Right. In the event that any person or group of affiliated or associated
persons becomes an Acquiring
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Person, proper provision shall be made so that each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereafter
be null and void and nontransferable), will thereafter have the right to
receive upon exercise that number of Common Shares of the Company having a
market value of two times the exercise price of the Right.
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by such person
or group of 50 percent or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which will have become null and void and nontransferable),
in whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in such Purchase Price. The Company may, but shall not be required to,
issue fractions of a Preferred Share (other than one one-hundredth of a
Preferred Share or any integral multiple thereof, which may, at the election of
the Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.
At any time prior to the close of business on the tenth day following
a public announcement that an Acquiring Person has become such an Acquiring
Person, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. The time at which the Rights are redeemed by the Company is herein
referred to as the "Redemption Date." Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights will be to receive the Redemption Price.
At any time prior to the Distribution Date and subject to the last
sentence of this paragraph, the terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including without limitation an amendment to lower certain thresholds
described above to not less than the greater of (i) the sum of 0.001 percent
and the largest percentage of the outstanding Common Shares then known by
the Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10 percent. From and after the Distribution Date
and subject to applicable law, the terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of Rights
Certificates to, among other things, make any other provisions in regard to
matters under the Rights Agreement that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
the Rights or Right Certificate (other than an Acquiring Person or an affiliate
or associate of an Acquiring Person). The terms of the Rights may not be
amended to (i) reduce the Redemption Price (except as required by antidilution
provisions) or (ii) provide for an earlier Final Expiration Date.
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.
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The Preferred Shares shall rank, with respect to the payment of
dividends and as to distributions of assets upon liquidation, dissolution or
winding up of the Company, junior to the Company's currently outstanding series
of $1.50 Convertible Preferred Stock and to all other series of preferred stock
of the Company, unless the Board of Directors of the Company shall specifically
determine otherwise in fixing the powers, preferences and relative,
participating, optional and other special rights of the shares of any such
other series and the qualifications, limitations and restrictions thereof.
As of June 28, 1995, there were 94,362,140 Common Shares issued and
outstanding, and an aggregate of an additional 14,439,711 Common Shares reserved
for issuance under the Company's employee stock option plans, non-employee
director stock option plan and agreements, $1.50 Convertible Preferred Stock,
contingent obligations relating to the acquisition of Triton Engineering
Services Company and matching funding obligation under the Noble Drilling
Thrift Plan. One Right will be distributed to holders of the Common Stock for
each Common Share owned of record by them on July 10, 1995. One Right will be
issued with respect to each Common Share that shall become outstanding between
the Record Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date. In certain circumstances, the Company may issue
Rights with respect to Common Shares issued following the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date. The
Company's Board of Directors has initially reserved for issuance upon exercise
of the Rights 1,100,000 Preferred Shares, which number is subject to adjustment
from time to time in accordance with the Rights Agreement.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner or on terms not approved by the Board of Directors. The Rights,
however, should not deter any prospective offeror willing to negotiate in good
faith with the Board of Directors, nor should the Rights interfere with any
merger or business combination approved by the Board of Directors of the
Company prior to an Acquiring Person's acquiring 15 percent or more of the
Common Shares.
The Company has in place certain additional measures which could also
be considered to have anti-takeover effects. For additional information on
such measures, see the sections captioned "Foreign Ownership" and "Certain
Corporate Governance Provisions" contained on pages 18-21 of the Company's
prospectus dated May 12, 1995, a copy of which is filed as an exhibit to this
Registration Statement and incorporated herein by reference.
A copy of the Rights Agreement between the Company and the Rights
Agent specifying the terms of the Rights is filed as an exhibit to this
Registration Statement and incorporated herein by reference. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
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ITEM 2. EXHIBITS.
4. Rights Agreement, dated as of June 28, 1995, between Noble
Drilling Corporation and Liberty Bank and Trust Company of
Oklahoma City, N.A., which includes as Exhibit B the Form of
Right Certificate.
99. Sections captioned "Foreign Ownership" and "Certain Corporate
Governance Provisions" contained on pages 18-21 of Noble
Drilling Corporation's Prospectus dated May 12, 1995,
constituting Part I of Registration Statement on Form S-3 (No.
33-59269).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
NOBLE DRILLING CORPORATION
Date: June 29, 1995 By: /s/ Byron L. Welliver
-------------------------------------
Byron L. Welliver,
Senior Vice President - Finance,
Treasurer and Controller
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INDEX TO EXHIBITS
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<CAPTION>
Exhibit Description
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<S> <C>
4 Rights Agreement, dated as of June 28, 1995, between Noble
Drilling Corporation and Liberty Bank and Trust Company of
Oklahoma City, N.A., which includes as Exhibit B thereto the
Form of Right Certificate.
99 Sections captioned "Foreign Ownership" and "Certain Corporate
Governance Provisions" contained on pages 18-21 of Noble
Drilling Corporation's Prospectus dated May 12, 1995
constituting Part I of Registration Statement on Form S-3 (No.
33-59269).
</TABLE>
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EXHIBIT 4
________________________________________________________________________________
NOBLE DRILLING CORPORATION
and
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A.
Rights Agent
RIGHTS AGREEMENT
Dated as of June 28, 1995
________________________________________________________________________________
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TABLE OF CONTENTS
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Page
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3. Issue of Rights and Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Execution, Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6. Transfer, Split-up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 9. Reservation and Availability of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 10. Preferred Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . 12
Section 12. Certificate of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . 19
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . 23
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
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<TABLE>
<S> <C> <C>
Section 22. Issuance of New Right Certificates and Additional Rights . . . . . . . . . . . . . . . . . . . . . . 26
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Exhibit A - Form of Certificate of Designations of Noble Drilling Corporation
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
</TABLE>
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AGREEMENT
This AGREEMENT, dated as of June 28, 1995 (the "Agreement"), between
NOBLE DRILLING CORPORATION, a Delaware corporation (the "Company"), and LIBERTY
BANK AND TRUST COMPANY OF OKLAHOMA CITY, N.A., as Rights Agent (the "Rights
Agent"),
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one Right (as such term is hereinafter defined) for each
share of Common Stock, par value $.10 per share, of the Company (the "Common
Stock") outstanding at the close of business (as such term is hereinafter
defined) on July 10, 1995 (the "Record Date"), and has authorized the issuance
of one Right (as such number may hereafter be adjusted pursuant to the
provisions of this Agreement) with respect to each share of Common Stock that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined); provided, however, that Rights may be issued
with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date in accordance with the provisions of Section 22 of this
Agreement. Each Right shall initially represent the right to purchase one
one-hundredth of a share of Series A Junior Participating Preferred Stock, par
value $1.00 per share, of the Company (the "Preferred Shares"), having the
powers, rights and preferences set forth in the Certificate of Designations
attached to this Agreement as Exhibit A;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner
(as such term is hereinafter defined) of 15 percent or more of the Common
Shares (as such term is hereinafter defined) of the Company then outstanding,
but shall not include the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares of the Company
for or pursuant to the terms of any such plan. Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" as the result of an acquisition of
Common Shares of the Company by the Company which, by reducing the number of
such shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15 percent or more of the Common Shares of
the Company then outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 15 percent or more of the Common Shares of the Company
then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall be
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deemed to 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 foregoing
provisions of this definition, has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares of the
Company so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this definition, then such
person shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement.
"Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
"Affiliate" and "Associate," when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act (as such term is
hereinafter defined), as in effect on the date of this Agreement.
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) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso in
clause (ii)(B) of this definition) or disposing of any securities of the
Company.
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Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the Borough of Manhattan, The City of New
York are authorized or obligated by law or executive order to close.
"Certificate of Designations" shall mean the Certificate of
Designations of Series A Junior Participating Preferred Stock of the Company
setting forth the powers, preferences, rights, qualifications, limitations and
restrictions of such series of Preferred Stock of the Company, a copy of the
form of which is attached to this Agreement as Exhibit A.
"Close of business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
"Common Shares" when used with reference to the Company shall mean the
shares of Common Stock of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the capital stock (or
equity interest) with the greatest voting power of such other Person or, if
such other Person is a Subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person.
"Common share equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Common Stock" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Distribution Date" shall have the meaning set forth in Section 3(b)
hereof.
"Equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
"Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
"Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
"Flip-In Event" shall have the meaning set forth in Section 11(a)(ii)
hereof.
"Flip-In Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Flip-Over Event" shall have the meaning set forth in Section 13(a)
hereof.
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"Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Agreement. Any reference in this Agreement to
Preferred Shares shall be deemed to include any authorized fraction of a
Preferred Share, unless the context otherwise requires.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" with respect to each Right shall mean $35.00, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references herein
to the Purchase Price shall mean the Purchase Price as in effect at the time in
question.
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
"Redemption Price" shall have the meaning set forth in Section 23
hereof.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form attached to this Agreement as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares (or other
securities) as provided in this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as in effect
on the date in question, unless otherwise specifically provided.
"Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
"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.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall, prior to the
Distribution Date, also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts
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<PAGE> 8
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights and Right Certificates.
(a) One Right shall be associated with each Common Share
outstanding on the Record Date, each additional Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date, and each additional Common
Share with which Rights are issued after the Distribution Date and prior to the
earlier of the Redemption Date and the Final Expiration Date as provided in
Section 22 hereof; provided, however, that, if the number of outstanding Rights
are combined into a smaller number of outstanding Rights pursuant to Section 11
hereof, the appropriate fractional Right determined pursuant to such Section
shall thereafter be associated with each such Common Share.
(b) Until the earlier of (i) the tenth day after the Shares
Acquisition Date and (ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors of the Company prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares of the Company for or pursuant to
the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding Common Shares of the Company for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15 percent or more of the then outstanding Common Shares (including
any such date which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates, and
(y) the Rights, including the right to receive Right Certificates, will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be
sent (and the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one whole Right for each
Common Share (or for the number of Common Shares with which one whole Right is
then associated if the number of Rights per Common Share held by such record
holder has been adjusted in accordance with the provision in Section 3(a)
hereof) so held. If the number of Rights associated with each Common Share has
been adjusted in accordance with the proviso in Section 3(a) hereof, at the
time of distribution of the Right Certificates, the Company may make any
necessary and appropriate rounding adjustments so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any
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<PAGE> 9
fractional Right in accordance with Section 14 hereof. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form attached to this Agreement as Exhibit C (the "Summary
of Rights"), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to any
certificate for Common Shares outstanding as of the Record Date, until the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date, the Rights will be evidenced by such certificates registered in the names
of the holders thereof together with a copy of the Summary of Rights attached
thereto. Until the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date, the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record Date
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (d)), but prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date, shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT DATED AS OF JUNE 28,
1995, AS IT MAY BE AMENDED FROM TIME TO TIME (THE "RIGHTS AGREEMENT"),
BETWEEN NOBLE DRILLING CORPORATION AND LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A., AS RIGHTS AGENT, THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF NOBLE DRILLING CORPORATION. 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. NOBLE DRILLING CORPORATION WILL
MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT
WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
NONTRANSFERABLE.
With respect to such certificates containing the foregoing legend, until the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date, the Rights associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event
that the Company purchases or acquires any Common Shares after the Record Date
but prior to the Distribution Date, any Rights associated with such Common
Shares shall be deemed cancelled
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<PAGE> 10
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the form of election to purchase and form of assignment to be printed on
the reverse side thereof) shall be in substantially the form attached to this
Agreement as Exhibit B and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which the Rights may from time to time be listed or of
any automated quotations system of a national securities association on which
the Rights may from time to time be registered or quoted, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates,
whenever issued, on their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preferred Share as shall be set forth
therein for the Purchase Price per one one-hundredth of a Preferred Share,
subject to adjustment from time to time as herein provided.
Section 5. Execution, Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President, its Chief Executive
Officer, or any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned manually or by facsimile signature by the
Rights Agent and shall not be valid or obligatory for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such an 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
an officer of the Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right Certificates, the number
of Rights evidenced on its face by each of the Right Certificates, the
certificate number of each of the Right Certificates and the date of each of
the Right Certificates.
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<PAGE> 11
Section 6. Transfer, Split-up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e) and 14 hereof, at
any time after the close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the Redemption Date and the Final
Expiration Date, any Right Certificate or Right Certificates (except as
otherwise provided herein, including, without limitation, Right Certificates
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) hereof or that have been exchanged pursuant to Section 24
hereof) may be transferred, split-up, combined or exchanged for another Right
Certificate or Right Certificates representing, in the aggregate, the same
number of Rights as the Right Certificate or Right Certificates surrendered
then represented. Any registered holder desiring to transfer, split-up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split-up, combined or
exchanged at the principal office or offices of the Rights Agent designated for
such purpose; provided, however, that neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer
of any Right Certificate surrendered for transfer until the registered holder
shall have completed and signed the certification of status 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
Sections 7(e) and 14 hereof, countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split-up, combination or exchange of Right Certificates.
(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 a new
Right Certificate of like tenor and deliver such new Right Certificate to the
Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof and except as otherwise
provided herein (including Section 24 hereof), each Right shall entitle the
registered holder thereof, upon exercise thereof as provided herein, to
purchase for the Purchase Price, at any time after the Distribution Date and at
or prior to the earliest of (i) the close of business on July 10, 2005 (the
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date") and (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof, one
one-hundredth of a Preferred Share, subject to adjustment from time to time as
provided in Section 11 or 13 hereof.
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<PAGE> 12
(b) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with payment of the Purchase
Price for each one one-hundredth of a Preferred Share as to which the Rights
are exercised, at or prior to the earliest of (i) the Final Expiration Date,
(ii) the Redemption Date and (iii) the time at which such Rights are exchanged
as provided in Section 24 hereof.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares (or other securities) to
be purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with Section 9
hereof, in lawful money of the United States of America, in cash or by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon (i) either (A) promptly requisition
from any transfer agent of the Preferred Shares (or make available, if the
Rights Agent is a transfer agent for such shares) certificates for the number
of Preferred Shares 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 Preferred Shares with a depositary
agent under a depositary arrangement, promptly requisition from the depositary
agent depositary receipts representing the number of one one-hundredths of a
Preferred Share to be purchased (in which case certificates for the Preferred
Shares represented by such receipts shall be deposited by the transfer agent
with the depositary agent), and the Company will direct the depositary agent to
comply with all such requests, (ii) when appropriate, promptly requisition from
the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer 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 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
any Rights that are at any time beneficially owned by an Acquiring Person or
any Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(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 of any Right Certificate upon the
occurrence of any purported exercise unless such
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<PAGE> 13
registered holder shall have (i) completed and signed the certification of
status contained in the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
(g) The Company may temporarily suspend, for a period of time not
to exceed 90 calendar days after the Distribution Date, the exercisability of
the Rights in order to prepare and file a Registration Statement under the
Securities Act, on appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such Registration Statement
to become effective; provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any other Person become exercisable immediately upon, the effectiveness of
such Registration Statement. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision
herein to the contrary, the Rights shall not be exercisable in any jurisdiction
if the requisite qualification under the Blue Sky or securities laws of such
jurisdiction shall not have been obtained or the exercise of the Rights shall
not be permitted under applicable law.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, and any Right Certificate representing
Rights that have become null and void and nontransferable pursuant to Section
7(e) hereof surrendered or presented for any purpose shall, if surrendered or
presented to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered or presented 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 Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Right Certificate purchased or acquired by the Company. The Rights Agent
shall deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in either such case shall deliver a certificate of destruction thereof or a
certificate of cancellation thereof, as may be appropriate, to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
or any authorized and issued Preferred Shares held in it treasury, free from
preemptive rights or any right of first refusal, a number of Preferred Shares
sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7 hereof.
(b) In the event that there shall not be sufficient Preferred
Shares issued but not outstanding or authorized but unissued to permit the
exercise or exchange of Rights in accordance with Section 11 or 24 hereof, as
the case may be, the Company covenants and agrees that it will take all such
action as may be necessary to authorize additional Preferred Shares for
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<PAGE> 14
issuance upon the exercise or exchange of Rights pursuant to Section 11 or 24
hereof, as the case may be; provided, however, that if the Company is unable to
cause the authorization of additional Preferred Shares, then the Company shall,
or in lieu of seeking any such authorization, the Company may, to the extent
necessary and permitted by applicable law and any agreements or instruments in
effect prior to the Distribution Date to which it is a party, (i) upon
surrender of a Right, pay cash equal to the Purchase Price in lieu of issuing
Preferred Shares and requiring payment therefor, (ii) upon due exercise of a
Right and payment of the Purchase Price for each Preferred Share as to which
such Right is exercised, issue equity securities having a value equal to the
value of the Preferred Shares which otherwise would have been issuable pursuant
to Section 11 or 24 hereof, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, or (iii) upon due exercise of a Right and payment of the Purchase
Price for each Preferred Share as to which such Right is exercised, distribute
a combination of Preferred Shares, cash and/or other equity and/or debt
securities having an aggregate value equal to the value of the Preferred Shares
which otherwise would have been issuable pursuant to Section 11 or 24 hereof,
which value shall be determined by a nationally recognized investment banking
firm selected by the Board of Directors of the Company. To the extent that any
legal or contractual restrictions (pursuant to agreements or instruments in
effect prior to the Distribution Date to which it is a party) prevent the
Company from paying the full amount payable in accordance with the foregoing
sentence, the Company shall pay to holders of the Rights as to which such
payments are being made all amounts which are not then restricted on a pro rata
basis as such payments become permissible under such legal or contractual
restrictions until such payments have been paid in full.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise or exchange of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights may be listed on any national securities exchange or
automated quotations system of a registered national securities association on
which the Preferred Shares may from time to time be listed, traded or quoted,
the Company covenants and agrees that it will use reasonable efforts to cause,
from and after such time as the Rights become exercisable or exchangeable, all
Preferred Shares reserved for such issuance to be listed on such exchange or
approved for quotation in such quotation system, upon official notice of
issuance upon such exercise.
(e) The Company further covenants and agrees, subject to the
provisions of this Agreement, that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of
the issuance or delivery of Right Certificates or of any Preferred Shares or
Common Shares or other securities upon the exercise or exchange of the Rights.
The Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Right Certificates to a
Person other than, or in respect of the issuance or delivery of certificates
for Preferred Shares or Common Shares or other securities, as the case may be,
in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or exchange or to issue or deliver
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<PAGE> 15
any certificates for Preferred Shares or Common Shares or other securities, as
the case may be, upon the exercise or exchange of any Rights until 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 Shares Record Date. Each Person in whose
name any certificate for Preferred Shares or Common Shares or other securities
is issued upon the exercise or exchange of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares 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 any 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 transfer books of
the Company for the Preferred Shares or Common Shares or other securities, as
the case may be, are closed, such Person shall be deemed to have become the
record holder of such Preferred Shares or Common Shares or other securities, as
the case may be, on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred
Shares or Common Shares or other securities, as the case may be, are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred
Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time
when the transfer books of the Company for the Preferred Shares were
open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs that would
require an
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<PAGE> 16
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event
any Person becomes an Acquiring Person (a "Flip-In Event"), each
holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price multiplied times the number
of one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of Common Shares of the Company
(such number of Common Shares being referred to herein as the
"Adjustment Shares") as shall equal the result obtained by (x)
multiplying the then current Purchase Price times the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50 percent of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall become
an Acquiring Person and the Rights shall then be outstanding, the
Company shall not take any action which would eliminate or diminish
the benefits intended to be afforded by the Rights.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with Section
11(a)(ii) hereof, the Company shall, to the extent permitted by
applicable law and regulation: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price (such excess to be
referred to hereinafter as the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) other equity securities of the
Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company has deemed
to have the same value as the Common Shares (such shares of preferred
stock being referred to herein as "common share 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 as determined by the Board of Directors of the Company;
provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days
following the first occurrence of a Flip-In Event (the "Flip-In
Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of
the Purchase Price, Common Shares (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
determines in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full
of the Rights, the 30-day period set forth above may be extended to
the extent necessary, but not to more than 120 days after the Flip-In
Trigger Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares (such period, as it
may be extended, the "Substitution Period"). To the extent the
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<PAGE> 17
Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall
deliver a notice to the Rights Agent and issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a notice to the Rights Agent and 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 Common
Shares shall be the current per share market price (as determined
pursuant to Section 11(d) hereof) of the Common Shares on the Flip-In
Trigger Date, and the value of any common share equivalent shall be
deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d) hereof)
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 times a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in consideration part or all of which may be in
a form other than cash, the value of such consideration shall be as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a
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<PAGE> 18
consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date times a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d)(i) 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 any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be
the average of the daily closing prices per share of such Security for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current per share market
price" of a Security on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the 10
consecutive Trading Days immediately following such date; provided,
however, that in the event that the current per share market price of
the Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities
convertible into shares of such Security (other than the Rights), or
(B) any subdivision, combination or reclassification of such Security,
and the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification,
shall not have occurred prior to the commencement of the requisite 30
Trading Day or 10 Trading Day period, as set forth above, then, and in
each such case, the "current per share market price" shall be
appropriately adjusted to reflect the current market price per share
equivalent of such Security. 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 Security
is 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 Security is listed or admitted to trading or, if
the Security is 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
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<PAGE> 19
by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use, or, if
on any such date the Security is 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 Security selected by
the Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted
to trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i)
hereof. If the Preferred Shares are not publicly traded, the "current
per share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common Shares,
as determined pursuant to Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied times 100.
If neither the Common Shares nor the Preferred Shares are publicly
held or 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.
(e) Except as hereinafter provided, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least one percent in the Purchase Price; provided, however, that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such adjustment and
(ii) the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
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
Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and
the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
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<PAGE> 20
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one one-
millionth of a Preferred Share) obtained by (i) multiplying (x) the number of
one one-hundredths of a share covered by a Right immediately prior to this
adjustment times (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-hundredths of a Preferred Share 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-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preferred Share 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-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the
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<PAGE> 21
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the current
market price, (iii) issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
(iv) dividends on Preferred Shares payable in Preferred Shares, or (v) issuance
of rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares, shall not be
taxable to such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (A) the number of one
one-hundredths of a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of one
one-hundredths of a Preferred Share so purchasable immediately prior to such
event times a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
Section 12. Certificate of Adjustment. Whenever an adjustment is
made as provided in Section 11 or 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of
the facts accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Shares or the Preferred
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<PAGE> 22
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate (or, prior to the Distribution Date, of the
Common Shares) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets
or Earning Power.
(a) In the event, directly or indirectly, at any time after a
Person has become an Acquiring Person, (i) the Company shall consolidate with,
or merge with and into, any other Person, (ii) any Person shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for capital stock or other securities of any other Person (or the
Company) or cash or any other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50
percent or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly- owned Subsidiaries (any such event described in
clauses (i), (ii) or (iii) being referred to herein as a "Flip-Over Event"),
then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied times the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable Common
Shares of the Principal Party (as such term is hereinafter defined), free and
clear of liens, encumbrances or other adverse claims, as shall equal the result
obtained by (1) multiplying the then current Purchase Price times the number of
one one-hundredths of a Preferred Share for which a Right is exercisable
immediately prior to the first occurrence of a Flip-Over Event (or, if a
Flip-In Event has occurred prior to the first occurrence of a Flip-Over Event,
multiplying the number of such one one-hundredths of a share for which a Right
was exercisable immediately prior to the first occurrence of a Flip-In Event
times the Purchase Price in effect immediately prior to such first occurrence),
and dividing that product (which, following the first occurrence of a Flip-Over
Event, shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50 percent of the then current per share
market price of the Common Shares of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (B) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the first
occurrence of a Flip-Over Event; (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights; and (E)
the provisions of Section 11(a)(ii) hereof shall be of no effect following
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<PAGE> 23
the first occurrence of any Flip-Over Event. The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(i) or (ii) of the first sentence of Section 13(a) hereof, the Person
that is the issuer of any securities into which Common Shares of the
Company are converted in such transaction, or if there is more than
one issuer, the issuer of Common Shares with the greatest aggregate
market value, and if no securities are so issued, the Person that is
the other party to such transaction, or if there is more than one such
Person, the Person having Common Shares with the greatest aggregate
market value; and
(ii) in the case of any transaction described in clause
(iii) of the first sentence of Section 13(a) hereof, the Person that
is the party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of
such Person are not at such time and have not been continuously over
the preceding twelve-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
any Person the Common Shares 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 Common Shares of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Shares having the greatest aggregate
market value.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company may, but shall not be required to, issue fractions
of Rights or distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, the Company may pay to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For 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
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<PAGE> 24
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 or admitted to trading on the
principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.
(b) The Company may, but shall not be required to, issue fractions
of Preferred Shares upon exercise of the Rights or distribute certificates
which evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company may elect to (i) utilize a depositary arrangement as
provided by the terms of the Preferred Shares or (ii) in the case of a fraction
of a Preferred Share (other than one one-hundredth of a Preferred Share or any
integral multiple thereof), pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of a whole Preferred
Share, if any are outstanding and publicly traded (or the Formula Number (as
such term is defined in Section 2 of the Certificate of Designations) then in
effect times the current market value of a whole Common Share if the Preferred
Shares are not outstanding and publicly traded). For purposes of this Section
14(b), the current market value of a Preferred Share (or Common Share) shall be
the closing price of a Preferred Share (or Common Share) (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise. If, as a result of an
adjustment made pursuant to Section 11 hereof, the holder of any Right
thereafter exercised shall become entitled to receive any securities other than
Preferred Shares, the provisions of this Section 14(b) shall apply, as nearly
as reasonably may be, on like terms to such other securities.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right except as provided in this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of
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<PAGE> 25
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
hereunder, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e) hereof, only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; 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 obligations; provided, however, the Company must use
reasonable efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as reasonably practicable.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or be deemed, for any purpose, the holder of the Preferred
Shares or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder of the
Company, including, without limitation, any right to vote for the election of
directors or upon any other matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or other distributions 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.
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<PAGE> 26
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
(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 the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers 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 hereof. 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.
(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
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<PAGE> 27
the Company and the holders of Right Certificates (or, prior to the
Distribution Date, of the Common Shares), by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void and nontransferable pursuant to
Section 7(e) hereof) or any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or
24 hereof, or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares or Common Shares
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
24
<PAGE> 28
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing in this Agreement shall preclude
the Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability or expense (including reasonable fees and
expenses of counsel) that the Rights Agent may incur resulting from its actions
as Rights Agent pursuant to this Agreement; provided, however, that the Rights
Agent shall not be indemnified or held harmless with respect to any such loss,
liability, damage or expense incurred by the Rights Agent as a result of, or
arising out of, its own negligence, bad faith or willful misconduct. In no
case shall the Company be liable with respect to any action, proceeding, suit
or claim against the Rights Agent unless the Rights Agent shall have notified
the Company, by letter or by facsimile confirmed by letter, of the assertion of
any action, proceeding, suit or claim against the Rights Agent, promptly after
the Rights Agent shall have notice of any such assertion of an action,
proceeding, suit or claim or have been served with the summons or other first
legal process giving information as to the nature and basis of the action,
proceeding, suit or claim. The Company shall be entitled to participate at its
own expense in the defense of any such action, proceeding, suit or claim, and,
if the Company so elects, the Company shall assume the defense of any such
action, proceeding, suit or claim. In the event that the Company assumes such
defense, the Company shall not thereafter be liable for the fees and expenses
of any additional counsel retained by the Rights Agent, so long as the Company
shall retain counsel satisfactory to the Rights Agent, in the exercise of its
reasonable judgment, to defend such action, proceeding, suit or claim. The
Rights Agent agrees not to settle any litigation in connection with any action,
proceeding, suit or claim with respect to which it may seek indemnification
from the Company without the prior written consent of the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in
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<PAGE> 29
writing mailed to the Company and to each transfer agent of the Common Shares
or Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates (or, prior to the Distribution Date, of the Common Shares)
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates (or, prior to the Distribution Date, of the
Common Shares) by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) (who
shall, with such notice, submit his Right Certificate or, prior to the
Distribution Date, the certificate representing his Common Shares, for
inspection by the Company), then the registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Shares) may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the United
States so long as such corporation is authorized to conduct a stock transfer or
corporate trust business in the State of New York), in good standing, having an
office or agency in the State of New York, which is authorized under such laws
to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million; provided that the principal transfer agent for the Common
Shares shall in any event be qualified to be the Rights Agent. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Shares or Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates (or, prior to the Distribution
Date, of the Common Shares). 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 and Additional
Rights. 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 of the Company to reflect any adjustment or change made in accordance
with the provisions of this Agreement. In addition, in connection with the
issuance or sale of Common Shares following the Distribution Date and prior to
the earlier of the Redemption Date and the Final Expiration Date, the Company
(i) shall, with respect to Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement,
26
<PAGE> 30
or upon the exercise, conversion or exchange of securities, notes or debentures
issued by the Company, and (ii) 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 no such Right Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificate would be issued,
and no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the close of business on the tenth day
following the Shares Acquisition Date (or, if the Shares Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date) and (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). The redemption of
the Rights by the Board of Directors of the Company may be made effective at
such time, on such basis and with such conditions as the Board of Directors of
the Company in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. Within 10 Business Days
after the action of the Board of Directors of the Company 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 Common Shares. Each such notice of redemption will
state the method by which payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the holder of Rights receives such
notice. In any case, failure to give such notice by mail, or any defect in the
notice, to any particular holder of Rights shall not affect the sufficiency of
notice to other holders of Rights. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, mandatorily exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that shall have become null and void and
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<PAGE> 31
nontransferable pursuant to the provisions of Section 7(e) hereof) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors of the Company shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares of the Company for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50 percent or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24, and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied times the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become null and void and
nontransferable pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Shares (or equivalent preferred shares)
for Common Shares exchangeable for Rights, at the initial rate of one one-
hundredth of a Preferred Share (or equivalent preferred share) for each Common
Share, as appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that the number of Common Shares or Preferred
Shares which are issued but not outstanding or authorized but unissued are not
sufficient to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company may, at its option, take all such action as may be
necessary to authorize additional Common Shares or Preferred Shares.
(e) The Company may, but shall not be required to, issue fractions
of Common Shares upon exchange of Rights pursuant to this Section 24 or
distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company may pay to the registered holders of
the Right Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of
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<PAGE> 32
the current market value of a whole Common Share for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24. For
purposes of this paragraph (e), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof).
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in capital stock of any class to the holders of its Preferred Shares or
to make any other distribution to the holders of its Preferred Shares (other
than a regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of capital stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of 50 percent or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other Person, (v)
to effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares), in
accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (i)
or (ii) above at least 10 days prior to the record date for determining holders
of the Preferred Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case a Flip-In Event shall occur, then the Company shall as
soon as practicable thereafter give to each holder of a Right Certificate (or,
prior to the Distribution Date, of Common Shares), in accordance with Section
26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
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:
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<PAGE> 33
Noble Drilling Corporation
10370 Richmond Avenue, Suite 400
Houston, Texas 77042
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Liberty Bank and Trust Company of Oklahoma City, N.A.
100 North Broadway
Oklahoma City, Oklahoma 73102
Attention: Manager, Stock Transfer Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. At any time prior to the
Distribution Date and subject to the last sentence of this Section 27, the
Company may by action of its Board of Directors, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement
(including, without limitation, the date upon which the Distribution Date shall
occur, the time during which the Rights may be redeemed pursuant to Section 23
or any provision of the Certificate of Designations) in any manner without the
approval of any holder of the Rights. From and after the Distribution Date and
subject to applicable law, the Company may by action of its Board of Directors,
and the Rights Agent shall if the Company so directs, from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity or to correct or supplement any
provision contained in this Agreement which may be defective or inconsistent
with any other provision of this Agreement or (ii) to make any other provisions
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of the Rights or Right Certificates (other than an Acquiring Person
or any Affiliate or Associate of an Acquiring Person). Any supplement or
amendment adopted during any period after any Person has become an Acquiring
Person but prior to the Distribution Date shall be null and void unless such
supplement or amendment could have been adopted under the prior sentence from
and after the Distribution Date. Without limiting the foregoing, the Company
may at any time prior to the Distribution Date amend this Agreement to lower
the thresholds set forth in the definition of Acquiring Person in Section 1
hereof and in Section 3(b) hereof to not less than the greater of (i) the sum
of 0.001 percent and the largest percentage of the outstanding Common Shares
then known by the Company to be beneficially owned by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares
of the Company for or pursuant to the terms of any such plan) and (ii) 10
percent. Upon the delivery of a certificate from an appropriate officer of the
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<PAGE> 34
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment; provided, however, that the Rights Agent may, but
shall not be obligated to, enter into any such supplement or amendment which
affects its own rights, duties or immunities under this Agreement. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of the Common Shares of the
Company. In addition, notwithstanding anything to the contrary contained in
this Agreement, no supplement or amendment to this Agreement shall be made
which (i) reduces the Redemption Price (except as required hereunder by
appropriate adjustment to reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement) or (ii) provides for an
earlier Final Expiration Date.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, of the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, of the
Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 31. GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER LAWS
OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO
BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Agreement.
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<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
NOBLE DRILLING CORPORATION
Attest:
By: /s/ Julie J. Robertson By: /s/ James C. Day
------------------------------ ----------------------------------
Name: Julie J. Robertson Name: James C. Day
------------------------ ----------------------------
Title: Corporate Secretary Title: Chairman, President and CEO
----------------------- ---------------------------
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A.
Attest:
By: /s/ Martha E. Ober By: /s/ Edith Schuler
------------------------------ ----------------------------------
Name: Martha E. Ober Name: Edith Schuler
------------------------ ----------------------------
Title: Vice President Title: Assistant Vice President
----------------------- ---------------------------
32
<PAGE> 36
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
NOBLE DRILLING CORPORATION
________________________________
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
________________________________
NOBLE DRILLING CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that, pursuant to the authority conferred on the Board of
Directors of the Corporation by the Restated Certificate of Incorporation, as
amended, of the Corporation (the "Certificate of Incorporation") and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation on June 28, 1995, adopted
the following resolution establishing and creating a series of Preferred Stock,
par value $1.00 per share, of the Corporation designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the provisions of
the Restated Certificate of Incorporation, as amended, of the
Corporation, a series of Preferred Stock, par value $1.00 per share,
of the Corporation is hereby established and created, and that the
designation and number of shares thereof and the voting and other
powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications,
limitations and restrictions thereof, are as follows:
A-1
<PAGE> 37
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock"). The number of shares initially constituting the Series A
Preferred Stock shall be 1,100,000; provided, however, that if more than a
total of 1,100,000 shares of Series A Preferred Stock shall be issuable upon
the exercise of Rights (the "Right") issued pursuant to the Rights Agreement
dated as of June 28, 1995 between the Corporation and Liberty Bank and Trust
Company of Oklahoma City, N.A., as Rights Agent (the "Rights Agreement"), the
Board of Directors of the Corporation, pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware, shall direct by resolution or
resolutions that a certificate be properly executed, acknowledged, filed and
recorded, in accordance with the provisions of Section 103 thereof, providing
for the total number of shares of Series A Preferred Stock authorized to be
issued to be increased (to the extent that the Certificate of Incorporation
then permits) to the largest number of whole shares (rounded up to the nearest
whole share) issuable upon exercise of such Rights.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
shares of any other series of Preferred Stock or other class of stock of the
Corporation ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors, out
of the assets of the Corporation legally available therefor, (i) quarterly
dividends payable in cash on the last day of each fiscal quarter in each year,
or such other dates as the Board of Directors of the Corporation shall approve
(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 a fraction of a share of Series A Preferred Stock, in
the amount of $.01 per whole share (rounded to the nearest cent) less the
amount of all cash dividends declared on the Series A Preferred Stock pursuant
to the following clause (ii) since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A
Preferred Stock (the total of which shall not, in any event, be less than zero)
and (ii) dividends payable in cash on the payment date for each cash dividend
declared on the Common Stock in an amount per whole share (rounded to the
nearest cent) equal to the Formula Number (as hereinafter defined) then in
effect multiplied times the cash dividends then to be paid on each share of
Common Stock. In addition, if the Corporation shall pay any dividend or make
any distribution on the Common Stock payable in assets, securities or other
forms of noncash consideration (other than dividends or distributions solely in
shares of Common Stock), then, in each such case, the Corporation shall
simultaneously pay or make on each outstanding whole share of Series A
Preferred Stock a dividend or distribution in like kind equal to the Formula
Number then in effect multiplied times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be 100;
provided, however, that, if at any time after June 28, 1995, the Corporation
shall (x) declare or pay any dividend on the Common Stock payable in shares of
Common Stock or make any distribution on the Common Stock in shares of Common
Stock, (y) subdivide (by a stock split or otherwise) the outstanding shares of
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<PAGE> 38
Common Stock into a larger number of shares of Common Stock or (z) combine (by
a reverse stock split or otherwise) the outstanding shares of Common Stock into
a smaller number of shares of Common Stock, then in each such event the Formula
Number shall be adjusted to a number determined by multiplying the Formula
Number in effect immediately prior to such event by a fraction, the numerator
of which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event
(and rounding the result to the nearest whole number); and provided further,
that, if at any time after June 28, 1995, the Corporation shall issue any
shares of its stock in a merger, reclassification, or change of the outstanding
shares of Common Stock, then in each such event the Formula Number shall be
appropriately adjusted to reflect such merger, reclassification or change so
that each share of Series A Preferred Stock continues to be the economic
equivalent of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.
(b) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (a) of this Section
immediately prior to or at the same time it declares a dividend or distribution
on the Common Stock (other than a dividend or distribution solely in shares of
Common Stock); provided, however, that, in the event no dividend or
distribution (other than a dividend or distribution solely in shares of Common
Stock) 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 Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of original issue of such shares
of Series A Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such Quarterly Dividend
Payment Date. Notwithstanding the foregoing, dividends on shares of Series A
Preferred Stock which are originally issued prior to the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend on the first Quarterly Dividend Payment Date shall
be calculated as if cumulative from and after the last day of the fiscal
quarter next preceding the date of original issuance of such shares. Accrued
but unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A 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.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment
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or distribution, on the Common Stock unless, in each case, the dividend
required by this Section 2 to be declared on the Series A Preferred Stock shall
have been declared.
(e) The holders of the shares of Series A Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share of
Series A Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote, multiplied times
the maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of stockholders of
the Corporation.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series A Preferred Stock are
in default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series A Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at
said meeting of stockholders (and at any subsequent annual meeting of
stockholders), unless all dividends in arrears have been paid or declared and
set apart for payment prior thereto, to vote for the election of two directors
of the Corporation, the holders of any Series A Preferred Stock being entitled
to cast a number of votes per share of Series A Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends which permitted
the election of said directors shall cease to exist, any director who shall
have been so elected pursuant to the next preceding sentence may be removed at
any time, either with or without cause, only by the affirmative vote of the
holders of the shares of Series A Preferred Stock at the time entitled to cast
a majority of the votes entitled to be cast for the election of any such
director at a special meeting of such holders called for that purpose, and any
vacancy thereby created may be filled by the vote of such holders. If and when
such default shall cease to exist, the holders of the Series A Preferred Stock
shall be divested of the foregoing special voting rights, subject to revesting
in the event of each and every subsequent like default in payments of
dividends. Upon the termination of the foregoing special voting rights, the
terms of office of all persons who have been elected directors pursuant to said
special voting rights shall forthwith terminate, and the number of directors
constituting the Board of Directors shall be reduced by two. The voting rights
granted by this Section 3(c) shall be in addition to any other voting rights
granted to the holders of the Series A Preferred Stock in this Section 3.
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<PAGE> 40
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series A 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 authorizing or
taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends, 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 Preferred Stock, except dividends paid ratably on the Series
A 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 Preferred Stock; provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on
a parity with the Series A Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
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<PAGE> 41
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock, without designation as to series, and may thereafter be
issued as part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of Incorporation,
or in any other Certificate of Designations creating a series of Preferred
Stock or any similar stock of the Corporation or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon the
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, no distribution shall be made (i) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock unless, prior thereto, the
holders of shares of Series A Preferred Stock shall have received an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, plus an amount equal to the greater of
(x) $1.00 per whole share and (y) an aggregate amount per share equal to the
Formula Number then in effect multiplied times the aggregate amount to be
distributed per share to holders of Common Stock, or (ii) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all such parity
stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination thereof, then in any
such case the then outstanding shares of Series A Preferred Stock shall at the
same time be similarly exchanged for or changed into an amount per share equal
to the Formula Number then in effect multiplied times the aggregate amount of
stock, securities, cash or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is exchanged or
changed. In the event both this Section 7 and Section 2 appear to apply to a
transaction, this Section 7 shall control.
Section 8. No Redemption; No Sinking Fund.
(a) The shares of Series A Preferred Stock shall not be subject to
redemption by the Corporation; provided, however, that the Corporation may
purchase or otherwise acquire outstanding shares of Series A Preferred Stock in
the open market or by offer to any holder or holders of shares of Series A
Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to
or entitled to the operation of a retirement or sinking fund.
Section 9. Ranking. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and as to distributions of assets upon
liquidation, dissolution or winding up of the Corporation, junior to the $1.50
Convertible Preferred Stock of the Corporation and
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<PAGE> 42
to all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of any such other series and the qualifications, limitations and
restrictions thereof.
Section 10. Fractional Shares. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredth of a share
or any integral multiple of such fraction which shall entitle the holder, in
proportion to such holder's fractional shares, to receive dividends, exercise
voting rights, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction
of a share of Series A Preferred Stock, may elect (i) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one
one-hundredth of a share or any integral multiple thereof or (ii) to issue
depository receipts evidencing such authorized fraction of a share of Series A
Preferred Stock pursuant to an appropriate agreement between the Corporation
and a depository selected by the Corporation; provided that such agreement
shall provide that the holders of such depository receipts shall have all the
rights, privileges and preferences to which they are entitled as holders of the
Series A Preferred Stock.
Section 11. Amendment. None of the powers, preferences or relative,
participating, optional or other special rights of the Series A Preferred Stock
as provided herein or in the Certificate of Incorporation of the Corporation
shall be amended in any manner that would alter or change the powers,
preferences, rights or privileges of the holders of Series A Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of at
least 66- 2/3 percent of the outstanding shares of Series A Preferred Stock,
voting as a separate class.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be duly executed in its corporate name on this 28th day of
June, 1995.
NOBLE DRILLING CORPORATION
By _________________________
James C. Day
Chairman, President and
Chief Executive Officer
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<PAGE> 43
EXHIBIT B
[Form of Right Certificate]
Certificate No. R-
____________ Rights
NOT EXERCISABLE AFTER JULY 10, 2005, OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
NOBLE DRILLING 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 June 28, 1995 (the "Rights
Agreement"), between Noble Drilling Corporation, a Delaware corporation (the
"Company"), and Liberty Bank and Trust Company of Oklahoma City, N.A., as
Rights Agent (the "Rights Agent"), unless the Rights evidenced hereby have been
previously redeemed by the Company, to purchase from the Company at any time
after the Distribution Date (as defined in the Rights Agreement) and prior to
5:00 P.M., New York City time, on July 10, 2005 (the "Final Expiration Date"),
at the principal office or agency of the Rights Agent, or its successors as
Rights Agent, in the City of New York, one one-hundredth of a fully paid,
nonassessable share of Series A Junior Participating Preferred Stock, par value
$1.00 per share, of the Company (the "Preferred Shares"), at a purchase price
per one one-hundredth of a share equal to $35.00 (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed.
The Purchase Price and the number and kind of shares that may be
purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares that
may be purchased as of ________, 19__. As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares that may be purchased upon
the exercise of each Right evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
reference to the Rights Agreement is hereby made for a
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<PAGE> 44
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the above-
mentioned office and agency of the Rights Agent and are also available from the
Company upon request.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number and kind of shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its
option at a redemption price (in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors of the Company to be
at least equivalent in value) of $.01 per Right (which amount may be subject to
adjustment as provided in the Rights Agreement) at any time prior to the
earlier of (i) the close of business on the tenth day following the first date
of public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such and (ii) the Final Expiration Date.
The Company may, but shall not be required to, issue fractions of a
Preferred Share (other than one one-hundredth of a Preferred Share or any
integral multiple thereof) or distribute certificates which evidence fractions
of a Preferred Share upon the exercise of any Right or Rights evidenced hereby.
In lieu of issuing fractional shares, the Company may elect to make a cash
payment as provided in the Rights Agreement for fractions of a share other than
one one-hundredth of a share or any integral multiple thereof or to issue
certificates or utilize a depositary arrangement as provided in the terms of
the Rights Agreement and the Preferred Shares.
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
Preferred Shares or any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company, including, without limitation,
any right to vote for the election of directors or upon any other matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to
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<PAGE> 45
receive dividends or other distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in accordance with the provisions of the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of:
[CORPORATE SEAL]
<TABLE>
<S> <C>
ATTEST: NOBLE DRILLING CORPORATION
By
- ---------------------------------------------- ------------------------------------------
Name: Name:
Title: Title:
Countersigned:
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A.
By
-------------------------------------------
Authorized Signature
</TABLE>
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<PAGE> 46
[On Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
____________________________________________________________________________
hereby sells, assigns and transfers unto
__________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________________
___________________________________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power of
substitution.
Dated: _____________________
________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities
Transfer Association recognized signature program.
CERTIFICATION OF STATUS
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate / / is / / is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it / / did / / did not acquire the Rights evidenced by
this Right Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
__________________________________
Signature
Dated: __________________
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<PAGE> 47
[On Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires
to exercise the Rights represented by the Right Certificate.)
To: NOBLE DRILLING CORPORATION
The undersigned hereby irrevocably elects to exercise
_________________________________________Rights represented by this Right
Certificate to purchase the Preferred Shares (or other shares) issuable upon
the exercise of such Rights and requests that certificates for such shares be
issued in the name of:
Please insert social security
or other identifying number
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ____________________
________________________________
Signature
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<PAGE> 48
[On Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by a participant in a Securities
Transfer Association recognized signature program.
CERTIFICATION OF STATUS
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate / / is / / is not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it / / did / / did not acquire the Rights evidenced by
this Right Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
_____________________________
Signature
Dated: __________________
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the Certification of Status set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
B-6
<PAGE> 49
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On June 28, 1995, the Board of Directors of Noble Drilling Corporation
(the "Company") authorized and declared a dividend of one Right (a "Right") for
each outstanding share of Common Stock, par value $.10 per share ("Common
Stock"), of the Company (the "Common Shares"). The dividend is payable on July
10, 1995 (the "Record Date") to the holders of record of the Common Shares at
the close of business on that date. In addition, the Company has authorized
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, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined). When exercisable each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $1.00 per share, of the Company
(the "Preferred Shares"), at a price of $35.00 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Liberty Bank and Trust Company of Oklahoma
City, N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15 percent or more of
the outstanding Common Shares and (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors of the Company prior to
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person) following the commencement of, or first public announcement
of an intention to commence, a tender offer or exchange offer the consummation
of which would result in the beneficial ownership by a person or group of
affiliated or associated persons of 15 percent or more of the outstanding
Common Shares (the earlier of such dates being herein referred to as the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificate with a copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date, upon transfer or new issuance of Common Shares, will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding on or
after the Record Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common
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<PAGE> 50
Shares as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 10, 2005 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
subject to redemption by the Company. Each Preferred Share will be entitled to
a minimum preferential quarterly dividend payment of $.01 per share but will be
entitled to an aggregate dividend of 100 multiplied times the dividend declared
per Common Share. In the event of liquidation, the holder of the Preferred
Shares will be entitled to a minimum preferential liquidation payment of $1.00
per share but will be entitled to an aggregate payment of 100 multiplied times
the payment made per Common Share. Each Preferred Share will have 100 votes,
voting together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 multiplied times the amount
received per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50 percent or more of its consolidated
assets or earning power are sold after a person or group of affiliated or
associated persons has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, that
number of shares
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of common stock of the acquiring company which at the time of such transaction
will have a market value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated persons becomes an
Acquiring Person, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring Person (which will
thereafter be null and void and nontransferable), will thereafter have the
right to receive upon exercise that number of Common Shares of the Company
having a market value of two times the exercise price of the Right.
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by such person
or group of 50 percent or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which will have become null and void and nontransferable),
in whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in such Purchase Price. The Company may, but shall not be required to,
issue fractions of a Preferred Share (other than one one-hundredth of a
Preferred Share or any integral multiple thereof, which may, at the election of
the Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.
At any time prior to the close of business on the tenth day following
a public announcement that an Acquiring Person has become such an Acquiring
Person, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. The time at which the Rights are redeemed by the Company is herein
referred to as the "Redemption Date." Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including without
limitation an amendment to lower certain thresholds described above to not less
than the greater of (i) the sum of 0.001 percent and the largest percentage of
the outstanding Common Shares then known by the Company to be beneficially
owned by any person or group of affiliated or associated persons and (ii) 10
percent, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights.
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Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Preferred Shares shall rank, with respect to the payment of
dividends and as to distributions of assets upon liquidation, dissolution or
winding up of the Company, junior to the Company's currently outstanding series
of $1.50 Convertible Preferred Stock and to all other series of preferred stock
of the Company, unless the Board of Directors of the Company shall specifically
determine otherwise in fixing the powers, preferences and relative,
participating, optional and other special rights of the shares of any such
other series and the qualifications, limitations and restrictions thereof.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
June __, 1995. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
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EXHIBIT 99
FOREIGN OWNERSHIP
The Certificate of Incorporation contains provisions that limit
foreign ownership of the stock of the Company. These provisions are to protect
the ability of the Company to continue to own its mobile offshore drilling
units as U.S. flag vessels and to comply with covenants of the Company to
maintain U.S. citizenship (as defined) that are contained in certain financing
agreements.
In order to continue to enjoy the benefits of U.S. flag registry for
its vessels, the Company must maintain "United States citizenship" as defined
in the Shipping Act, 1916, as amended (the "Shipping Act"). A corporation is
not considered a U.S. citizen for these purposes unless, among other things,
the controlling interest therein (a majority in the case of non-coastwise
trade) is owned by U.S. citizens. Under regulations adopted by the U.S.
Maritime Administration to implement the citizenship requirements, the
"controlling interest" test is applied to each class of stock of the Company.
The Common Stock and the Company's preferred stock (combining all series of
preferred stock) are considered to be separate classes of stock for this
purpose.
Under the provisions of the Certificate of Incorporation, (i) any
transfer, or attempted or purported transfer, of any shares of stock of the
Company that would result in the ownership or control by one or more persons
who is not a U.S. citizen for purposes of the Shipping Act of an aggregate
percentage of the shares of any class of stock in excess of a fixed percentage
(the "Permitted Percentage") that is equal to 90 percent of the percentage that
would prevent the Company from being a U.S. citizen (currently 50 percent) for
purposes of the Shipping Act, will, for so long as such excess shall exist, be
void and ineffective as against the Company, and (ii) if at any time ownership
of shares of stock of the Company (either of record or beneficial) by persons
other than U.S. citizens exceeds the Permitted Percentage, the Company may
withhold payment of dividends on such shares determined to be in excess of the
Permitted Percentage and may suspend voting rights attributable to such shares.
The shares subject to any such withholding of dividends or suspension of voting
rights would be those foreign-owned shares that the Board of Directors of the
Company determines became so owned most recently. The Permitted Percentage is
currently 45 percent.
The certificates representing the shares of Common Stock will bear a
legend concerning the restrictions on ownership by persons other than U.S.
citizens. The Company has instructed its transfer agent for the Common Stock
to attempt to ensure the applicable transfer instructions are enforced.
CERTAIN CORPORATE GOVERNANCE PROVISIONS
Stockholder Consent Action Prohibited. The Certificate of
Incorporation and Bylaws of the Company require that, subject to the possible
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation, stockholder action be
taken only at an annual meeting or at a special meeting of stockholders called
by the Chairman of the Board or the President of the Company or by a majority
of the entire Board of Directors of the Company, and prohibit stockholder
action by written consent
<PAGE> 2
in lieu of a meeting. Stockholders are not permitted to call a special meeting
of stockholders or to require that the Board of Directors of the Company call
such a special meeting.
Classified Board and Other Provisions. The Certificate of
Incorporation and Bylaws of the Company provide that, subject to the possible
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation, the Board of Directors of
the Company will be composed of not less than three directors, with the exact
number of directors fixed from time to time by resolution adopted by vote of a
majority of the entire Board of Directors, and is divided into three classes of
directors, each class to be as nearly equal in number as possible. The term of
office of one class of directors expires each year in rotation so that one
class is elected at each annual meeting of stockholders for a full three-year
term.
The Certificate of Incorporation and Bylaws of the Company provide
that a director may be removed only for cause as defined in the Certificate of
Incorporation, and only by the affirmative vote of the holders of a majority of
the combined voting power of the capital stock of the Company entitled to vote
generally in the election of directors ("Voting Stock").
The Certificate of Incorporation provides that, subject to the
possible rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, a vacancy
on the Board resulting from any increase in the number of directors may be
filled by the Board or in the manner provided in the Bylaws of the Company,
that any other vacancy shall be filled only by an affirmative vote of a
majority of directors remaining in office, even though less than a quorum, and
that the newly-elected director shall serve for the unexpired term of his
predecessor in office. The Bylaws provide that if any vacancy resulting from
an increase in the number of directors is not filled by the remaining directors
it will be filled by the stockholders of the Company at the next annual meeting
or at a special meeting of stockholders called for that purpose.
An anti-takeover effect is accomplished by these provisions in that
they tend to preclude a third party from removing incumbent directors and
simultaneously gaining control of the Board by filling the vacancies created by
removal with its own nominees unless such third party controls at least 80
percent of the combined voting power of the Voting Stock (the ownership level
required to amend the Certificate of Incorporation and Bylaws in this respect).
Under these provisions, together with the classified board provisions described
above, it would take at least two elections of directors for any individual or
group to gain control of the Board.
Fair Price Provision. The affirmative vote of the holders of at least
80 percent of the combined voting power of the Voting Stock is required to
approve certain Business Combinations (as such term is defined in the
Certificate of Incorporation). The transactions included in the definition of
Business Combination are those between the Company and an Interested
Stockholder (as defined below) or, in certain instances, proposed by an
Interested Stockholder and include: (a) a merger or consolidation of the
Company, or any subsidiary having assets of $1,000,000 or more, with any
Interested Stockholder or with any other corporation or entity that is, or
after such merger or consolidation would be, an affiliate or associate of an
Interested Stockholder; (b) the sale or other disposition by the Company, or a
subsidiary, of assets of $1,000,000 or more if an Interested Stockholder (or an
affiliate or
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associate thereof) is a party to the transaction; (c) the issuance or transfer
of any securities of the Company, or a subsidiary, to an Interested Stockholder
(or an affiliate or associate thereof) in exchange for cash, securities or
other property (or a combination thereof) of $1,000,000 or more; (d) the
adoption of any plan or proposal for the liquidation or dissolution of the
Company proposed by or on behalf of an Interested Stockholder (or an affiliate
or associate thereof); (e) any reclassification of securities,
recapitalization, merger with a subsidiary or other transaction that has the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares (or securities convertible into shares) of any class or
series of stock of the Company or a subsidiary owned by an Interested
Stockholder (or an affiliate or associate thereof); (f) any series or
combination of transactions directly or indirectly having the same effect as
any of the foregoing; or (g) any contract, agreement or other arrangement
providing directly or indirectly for any of the foregoing. An "Interested
Stockholder" is defined in the Certificate of Incorporation to include a
beneficial owner of five percent or more of the combined voting power of the
Voting Stock, other than the Company, and any affiliate of the Company who, at
any time during the preceding two years, was the beneficial owner of five
percent or more of the combined voting power of the Voting Stock and includes
any person who is an assignee of or has succeeded to any shares of Voting Stock
in a transaction not involving a public offering which were at any time within
the prior two-year period beneficially owned by an Interested Stockholder. The
term "beneficial owner" includes persons directly and indirectly owning or
having the right to acquire or vote the stock in question.
The provisions of the Certificate of Incorporation of the Company
described in the preceding paragraph may have the effect of delaying, deterring
or preventing a change in control of the Company. The special vote requirement
of such provisions may be waived if the Business Combination is duly approved
by a majority of the Disinterested Directors (as such term is defined in the
Certificate of Incorporation) or if certain minimum price criteria and
procedural requirements are met. There is no requirement that a Business
Combination duly approved by the Disinterested Directors meet any minimum price
criteria or procedural requirements.
Alteration or Amendment. The approval of the holders of 80 percent or
more of the combined voting power of the Voting Stock is required for the
alteration, amendment or repeal of, or the adoption of any provision
inconsistent with, the foregoing corporate governance provisions as stated in
the Certificate of Incorporation. In addition, the affirmative vote of a
majority of the entire Board may authorize the alteration, amendment or repeal
of the Bylaws of the Company.
Elimination of Certain Director Liability; Indemnification. The
Certificate of Incorporation contains an article, which was approved by
stockholders at the 1987 annual meeting of stockholders, that eliminates the
personal liability of the Company's directors for monetary damages resulting
from breaches of their fiduciary duty, to the extent permitted by the General
Corporation Law of the State of Delaware ("DGCL"). This article eliminates the
liability of each director to the Company or its stockholders for all claims
for negligence or gross negligence in the performance of his duties other than
the duty of loyalty. Directors remain liable to the Company and its
stockholders for breaches of their duty of loyalty, as well as for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, and for transactions from which a director derives
improper personal benefit. The article does not limit the liability of
directors under Section 174 of the DGCL, which makes
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directors personally liable for unlawful dividends or unlawful stock
repurchases or redemptions and expressly sets forth a negligence standard with
respect to such liability.
The Certificate of Incorporation and the Bylaws of the Company contain
provisions providing for the indemnification of the Company's directors and
officers to the fullest extent permitted by Section 145 of the DGCL, including
in circumstances in which indemnification is otherwise discretionary.
The Company believes that these provisions are necessary to attract
and retain qualified persons as directors and officers.
The Delaware Business Combination Act. The Company is covered by
Section 203 of the DGCL which provides that a corporation shall not engage in
any business combination with an "interested stockholder" for a period of three
years following the date that such stockholder became an interested stockholder
unless: (1) prior to such date, the board of directors of the corporation
approved either the business combination or the transaction that resulted in
the stockholder becoming an interested stockholder, (2) upon consummation of
such transaction, the interested stockholder owned at least 85 percent of the
voting stock of the corporation outstanding at the time (excluding, from the
calculation of outstanding shares, shares beneficially owned by management,
directors and certain employee stock plans), or (3) on or after such date, the
business combination is (i) approved by the board of directors and (ii)
authorized at a meeting of stockholders by the affirmative vote of the holders
of at least two-thirds of the outstanding voting stock other than the
interested stockholder.
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